Dive Brief:

• Grubhub has introduced a new Direct Order Toolkit that allows restaurant partners to add online ordering to their native channels using Grubhub's technology. According to a company release, restaurants can add a direct order link to use in email marketing or social media posts, a direct "order now" button to use on restaurants' websites or a direct order QR code on printed materials.    
• Grubhub is not charging a marketing fee to restaurants on these services. Payment processing and delivery fees remain, though CNBC reports that those are typically smaller than a marketing commission fee.    
• This commission-free service could differentiate Grubhub from competitors and win deeper restaurant loyalty since the company and its peers have been criticized in the past for charging commission fees of 15% to 30% on every delivery order.

Dive Insight:

The timing of Grubhub's online ordering tool is also worth mentioning, as the National Restaurant Association estimates that over 110,000 U.S. restaurants have closed, with more closures on the horizon as dining room restrictions return and winter looms. In such an environment, digital ordering for off-premise orders is critical for survival and will likely remain so in a post-COVID environment as customers' behaviors shift. Digital sales are now expected to make up more than half of limited-service restaurants' business by 2025, a 70% increase over pre-COVID estimates

As this trend materializes, the ability for restaurants to provide ordering directly from their channels has also become more important, as it allows restaurants to control their digital relationship with their customers and mine customer data. As such, the number of companies helping restaurants direct their orders through their native channels has been growing and some have received large influxes of funding to support that growth. In October, Lunchbox, for example, raised $20 million to help restaurants build their own ordering experiences, while Ordermark received $120 million in Series C funding.

Grubhub's commission-fee service could change up that landscape a bit. In a recent interview with Forbes, Lunchbox founder and CEO Nabeel Alamgir said, "Native ordering can help restaurants capture those customers who are increasingly ordering from their phones, as well as avoid high fees and commissions for orders that may otherwise flow through third-party services."

Chowly is another such company that helps restaurants gain control over their online ordering channels, integrating restaurants' tech with third-party online ordering solutions. The company partnered with Grubhub in late October to help independent restaurants manage their order fulfillment.

Other delivery companies enable restaurants to order through their native channels, too. Chains that use DoorDash's Drive product, for example, can process orders through native channels, including their own point-of-sales systems, collect customer data and still have deliveries fulfilled by DoorDash. The company's Storefront product offers operators turnkey branded online stores. The latter product is available commission-fee through 2020.