Russell Weiner
Chief Executive Officer at Domino's Pizza
Thanks, Ryan, and good morning, everybody. My remarks this morning will focus on several new initiatives that are designed to create significant shareholder value in the months and years ahead. We launched our new loyalty program, Domino's Rewards, on September 12th. And here are some of the mechanics that are really meaningful to our current and prospective customers. First, we lowered the spend threshold to earn points from $10 down to $5, and this change will make us even more competitive in the carryout segment where ticket tends to be lower.
Our second change was creating more attainable redemption opportunities for lower-frequency customers. So, in the past, they needed to order six times to get a free pizza. Our new program features redemptions at 20-point, 40-point, and 60-point tiers and offers items from eight different categories on our expansive menu. Joining pizza at the 60-point level are oven-baked sandwiches, pastas, and lot of cakes. At 40 points, we feature our lines of bread twists and stuffed cheesy breads. And at 20 points, we offer single-serve beverages, parmesan bread bites, and dipping cups. So, more items to choose from with redemption options after just two purchases. While the program just launched, we've seen meaningful redemptions at the 20-point and 40-point levels. So, customers are clearly engaging more with Domino's Rewards.
These strategic improvements will be a significant value driver for our brand and Company. We plan to grow active users and order frequency, unlocking continued share growth, both at delivery and carryout segments.
Our second value-creating initiative is entering the aggregator marketplace for delivery orders. Our integration into the Uber Eats platform is proceeding as planned. We will achieve our goal of Uber Eats providing delivery orders to all our U.S. stores by the end of the year. We expect this initiative will drive incremental delivery volume from new customers, increase our share of the pizza delivery market, and create stronger economics for our Company and franchisees. This will begin in a measurable way in the first quarter of 2024.
We want to exceed the expectations of the incremental customers we'll get through Domino's Rewards and Uber Eats. And the way to do that is through best-in-class delivery service. And that's why I am pleased to announce that we ended Q3 of 2023 back at our pre-pandemic Q3 2019 delivery times. This improvement was achieved through many of the best practices highlighted with franchisees during our Summer of Service program. This focus is important for us to provide an excellent delivery experience for new customers flowing in from Domino's Rewards and the Uber Eats channel. We want these experiences to lead to loyal lasting customers, who will provide considerable lifetime value for our brand and our Company.
Now, I will talk to our renewed commitment to the all-important role innovation plays in the pizza category and our ability to continue to build our brand. We launched Pepperoni Stuffed Cheesy Bread on August 28. The stuffed cheesy bread launch is indicative of two things that you're going to see from us going forward, bringing news to our existing non-pizza platforms and leveraging Domino's Rewards. From the launch of Pepperoni Stuffed Cheesy Bread, we've lowered the redemption points required from 40 points to 20 points. It's great to see a product and technology innovation work so well together, and this is an example of the kind of purposeful innovation I've talked about in the past, innovation that serves many functions. In this case, we've got a new product that makes an existing platform top-of-mind with customers, all the while encouraging customers to sign-up for and continue to take advantage of our improved loyalty program. So, more customers, more orders, and more market share, all leading to more top-line growth and greater profits.
Another example of purposeful innovation is the Emergency Pizza promotion we launched just a few days ago. Customers who order Domino's will have 30 days to claim a free pizza to use in any emergency they see fit. Whether dinner was burned or maybe circumstances are making things a bit tougher to afford, customers who place an order on our e-commerce platform will automatically earn a Domino's Emergency Pizza. They'll have 30 days to redeem their Emergency Pizza, and, of course, must be members of Domino's Rewards to do so, another innovation designed to drive more customers, more orders, and more profits.
We're also driving purposeful innovation behind technology to improve customer service and the team member experience. On October 3rd, we announced undertaking this challenge with the best in the business, Microsoft. Our two companies will collaborate on Generative AI solutions that will create the next-generation of pizza ordering and operations technology. Together, our teams are focused on two important goals. First, transforming customer experiences by enhancing the ordering process to personalization and simplification. And then second, streamlining operations and quality control with more predictive tools. I couldn't be more excited to work with Microsoft on this critical endeavor.
Finally, I want to address one of the most important topics for all of us here at Domino's and that's profit, profit for our stores and profit for our Company. Despite our predicted and previously discussed softness in our U.S. same-store sales, our operating income margin improved as did our estimated franchisee profitability for the year. What that means is that the sales improvements we expect to realize in Q4, and even more significantly in 2024, will flow through a more efficient model for Domino's and our investors. I am confident about our future, including the more immediate future here at Domino's.
With that, I'll turn things over to Sandeep.
