Dunkin' leverages Grubhub's geofencing to optimize NYC delivery

Dive Brief:

Dunkin’ has partnered with Grubhub to begin its national delivery program rollout, starting Monday in 400 New York City locations, according to a company release. The service is expected to expand in the next few months in Boston, Chicago and Philadelphia with a goal of having more than 3,000 locations delivering by the end of the year, according to Yahoo Finance.
As part of this partnership, Grubhub will integrate orders directly into stores’ point-of-sale systems. Grubhub has also added a geofence around each of the 400 New York City Dunkin’ locations to monitor traffic for effective delivery times, Nation's Restaurant News reports.
Dunkin’ also has a delivery partnership with DoorDash in select markets, including parts of New York and New Jersey.

Dive Insight:

Seth Priebatsch, head of enterprise at Grubhub, told Nation’s Restaurant News that the geofencing technology will gauge distance and traffic to ensure the most effective delivery times. The delivery platform's integration into Dunkin’s POS system should also optimize efficiencies, as well as order accuracy and consistency.

Perhaps the best example of the effectiveness of geofencing came from Burger King’s The Whopper Detour campaign in late 2018, in which Burger King offered one cent Whoppers to customers who downloaded the brand’s app and came within 600 feet of a McDonald’s. The campaign led to 1.5 million app downloads.

With Dunkin's latest announcement, however, geofencing technology is being leveraged specifically to ensure fresh orders and efficient delivery times, a big deal for a concept focused on coffee in an intense category. Harvard Business School’s Digital Initiative predicts geofencing will become an even bigger deal in the quick-service restaurant space because of its effectiveness in optimizing food quality for off-premise business. The course points to the McDonald’s test that helps customers order ahead via its app, and then uses geofencing technology to predict their arrival time to ensure a fresh order, as evidence of this trend.

Focusing on this mobile-first technology is sure to appeal to younger, digital savvy consumers, and that’s exactly who Dunkin’ is going after. During Dunkin’s Q1 call in May, CEO Dave Hoffmann briefly touched upon the company’s mobile and delivery strategies, noting its delivery test was, at that time, performing to expectations.

“We think we’ve tapped into a much more savvy digital consumer than what we had before,” Hoffmann said. Mobile orders exceed 25% of transactions at high-volume sites in urban areas, he added.