Dive Brief:
- Grubhub launched a membership program Wednesday called Grubhub+ for $9.99 per month. The program offers unlimited free delivery from Grubhub+ restaurants, 10% cash back on dollars spent from member restaurants, donation matching on Donate the Change orders, VIP access to Elite Care teams for priority assistance and exclusive access to new Perks, local events and experiences, according to a press release emailed to Restaurant Dive.
- Anyone can currently sign up for a free 14-day trial of the service. For a limited time, diners that participate in a competitor's program can receive an extended 30-day trial. Students enrolled in any of the 150-plus campuses that work with Grubhub can get Grubhub+ for free.
- The minimum order for Grubhub+ members to receive free delivery is $12, the company told Restaurant Dive, and over 100,000 restaurant partners are already part of GrubHub+.
Dive Insight:
Subscription programs can help increase diner retention, which has become harder to come by as customers become less loyal to a single platform, Grubhub founder and CEO Matt Maloney pointed out in a November earnings call.
"Generous diner rewards are the core of Grubhub's competitive strategy," Maloney said in the press release. "As the only profitable company in our space, we are leveraging our profits to stay laser-focused on having the most restaurants in the network and giving away as much free food as possible."
Grubhub is pushing for a competitive advantage here, especially with its cashback feature and access to special menus and events, which isn't available with DoorDash's programs. Postmates' program, however, also offers special access to events, while Uber Eats allows customers to earn $5 in cash for every 500 points earned for using any of its services, including Rides, but doesn't appear to offer benefits similar to Grubhub's options.
With delivery becoming commoditized, this level of differentiation could help Grubhub regain market share, especially if it has the same level of success as its loyalty Perks program. Over $200 million was redeemed by Grubhub diners in 2019, according to the press release. Grubhub launched its Perks program in September and is also working to expand its restaurant participation, which adds more potential reward enhancements.
The addition of a free 30-day trial for users that have a competitor's subscription service shows that Grubhub is aggressively aiming to pull users away, especially with rivals offering free subscriptions. DoorDash partnered with Chase earlier this year to offer complimentary delivery subscriptions for a varying length of time depending on cardholder membership.
A free Grubhub+ membership for students also appears in line with its growing focus on students. Grubhub acquired Tapingo, a platform for campus food ordering, in 2018 and has been working to enhance its offerings on college campus, including its pickup program. The addition of student memberships will help the company gain potentially loyal customers at a young age, a tactic that many other companies have used to gain long-time consumers,
