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Starting Saturday, you can earn free Domino's pizza for eating a slice from Pizza Hut

Key Points
  • Fans of Domino's can earn a free pizza by buying pies from Pizza Hut, Papa John's or other rivals.
  • The pizza chain is using artificial intelligence software in its mobile app to give away points for eating pizza.
  • The promotion should help Domino's grow digital sales as rival Pizza Hut turns its focus to delivery.
Source: Domino's

Starting Saturday, fans of Domino's can earn a free pizza — by buying pies from Pizza Hut, Papa John's or other rivals.

Members of Domino's loyalty program just need to scan a pizza through the company's mobile app to earn 10 points. The pie can be from anywhere, even homemade, as long as the app's artificial intelligence software recognizes that it has sauce, cheese and crust. The promotion is an extension of Domino's Piece of the Pie Rewards loyalty program, which gives customers points for ordering Domino's pizza that can be redeemed for a medium pizza.

Domino's is ahead of the curve compared to its competitors when it comes to embracing technology. Digital channels account for more than 60 percent of its U.S. sales, according to the company's latest earnings release.

But rival Pizza Hut is closing the gap, with 55 percent of its sales coming from digital orders. The struggling Yum Brands-owned pizza chain has been trying to focus on delivery. In-store diners only account for 10 percent of its sales, and same-store sales have dropped for the last two quarters. The company is developing delivery-centric locations in the U.S. that leverage less square footage in order to cater to customers who prefer to eat their pizza elsewhere.

Papa John's reported digital sales exceeding 60 percent of its revenue in 2017, forecasting that it would hit 80 percent in a few more years. But after founder John Schnatter became embroiled in public scandals, sales tanked.

Domino's, the market leader, won't be getting any data through the promotion about where users got their pizza. Spokeswoman Jenny Fouracre-Petko said that the AI-driven software was built to identify the food as pizza, but it cannot identify where the pizza is from.

Instead, the promotion is meant to drive new pizza fans to the Domino's app. The company is limiting the number of points up for grabs and splitting them equally between new and returning loyalty members every week.

For customers, restaurant apps are a convenient way to order take-out food. They can swap a phone call for an app that will remember their orders and payment information. For the companies, mobile apps provide data about consumer preferences and increase sales. When customers order online, their average check increases by 26 percent, according to a report from management consultancy Deloitte.

Domino's isn't afraid to use stunts to get customers to use its app. In 2016, the company gave away thousands of free shares of its stock to loyalty program members. Domino's has also launched a separate zero-click app that orders pizza once the app is opened.

Participants in Domino's latest promotion can only receive points for a pizza once a week. Pizza fans who earn 60 points, the maximum allowed, can trade them in for a free medium pizza with two toppings. Domino's is planning to make at least 100 million points available over the 12-week period.

The promotion starts just in time for the Super Bowl, running from Feb. 2 to April 28. Domino's typically sees a 40 percent jump in sales during the Big Game compared to average Sundays. The game is typically the busiest day of the year for the NFL's official sponsor, Pizza Hut.

Burger King, which is owned by Restaurant Brands International, used a similar gimmick last year to encourage customers to download its relaunched mobile app. Customers using its app could order a Whopper for 1 cent, as long as they were within 600 feet of the burger chain's biggest competition — McDonald's.