The Demand for Delivery: How to manage the new Amazon/Grubhub partnership

Food delivery is more popular than ever, allowing customers a convenient and contactless method of eating from their favorite business in the comfort of their own home.  While some restaurants have the capacity to hand-deliver all their off-premise orders, many rely on third-party delivery providers–namely DoorDash, Uber Eats, and Grubhub.

In May of this year, Grubhub only held 13% of food delivery market share compared to DoorDash’s 59% and Uber Eats’ 24%.  However, due to a new partnership between Grubhub and Amazon, this is very likely to change.  As of July 6, all Amazon Prime members can sign up for a free Grubhub+ membership to receive access to $0 delivery fees from hundreds of thousands of restaurants for one year.  Amazon is estimated to have over 153 million Prime members already, meaning this partnership could drastically change the food delivery game.

So, what does this mean for restaurants?

This news may be unnerving for many restaurants.  For those who are trying to manage first-party delivery, competing with a mega-business like Amazon may seem like trying to tackle a giant.  Further, Amazon products like Alexa are making ordering with this new partnership that much easier.  For restaurants relying on third-party providers to make deliveries possible, those third-party fees can make profit margins razor thin.

Although delivery is convenient for customers, restaurants know it can cause a lot of stress on business.  Aside from the logistics of how to get orders from Point A to Point B, keeping up with deliveries can wreak havoc on staff.

Don’t Panic

All this information might be a lot to digest, but don’t panic.  Statistics show that restaurants and other third-party delivery business don’t need to throw in the towel.  Consumers in the United States, across all demographics and locations, have been found to prefer ordering food directly from the restaurant if they have the choice.  Additionally, research shows that food delivery app users aren’t loyal to just one provider, but rather use multiple delivery apps to find the best deal for their favorite foods.  So, while there may be some shifts in the market share of third-party providers, consumers ultimately care about the restaurant they get their food from, not the business who drops it off at their door.

We Can Help

While there are still unknowns as to what the partnership between Amazon and Grubhub will do to the industry, there are things to lessen the impact on restaurants.  Integrating technology that  makes your off-premise processes more efficient is crucial to stay on top of delivery orders.  ConnectSmart allows for seamless communication between your kitchen, in-store POS, and third-party partners.  Two-way communication and configurable order flow allows for an optimized system with no room for confusion about where an order is and when it will be ready.

News like this partnership can be complicated, but ConnectSmart makes off-premise dining simple.

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About the Author

As Vice President of Sales & Marketing, Ashley manages the teams in both North America and EMEA, helping to expand the company’s global presence. He is a passionate advocate of improving guest experience within the hospitality sector and his teams consultative approach to business has enabled QSR to remain at the forefront of technology innovation. When he isn’t working, you can find Ashley training for cycling events in both USA and Europe, spending time with his family, walking his dog Jax, and supporting Manchester United Football Club.