How Digital Ordering Made The Pizza Business Way Better

REUTERS/Anindito MukherjeeWorkers prepare pizzas in the kitchen of a Domino's Pizza branch in New Delhi, September 11, 2013.Digital ordering has completely taken over the pizza business.

Nearly half the domestic sales at Papa John's and Domino's Pizza are online, equity analyst Daniel Spelman writes on the Columbia Management blog.

Online ordering solved a huge problem in the pizza business, according to Spelman.

"Gone are the days of waiting to get through to someone on the phone or having an order misunderstood due to a bad connection," Spelman says. "Because orders are more accurate, food waste is dramatically reduced."

Ordering through pizza chains' websites and online apps is much more reliable. Customers can select the toppings they want, and review their order before sending it to Domino's, Papa John's, or Pizza Hut.

As a result digital ordering business is thriving, according to Spelman.

Domino's smartphone app has been downloaded 7.4 million times, and the company has sold $3 billion online in the past year.

Companies like Taco Bell, McDonald's, and Starbucks are also investing in digital ordering.