Grubhub Says Subscription Commerce Is Taking Over the Restaurant Industry

Grubhub is stepping up its subscription program as membership schemes increasingly supplement or replace points-based rewards programs for restaurant customers.

Grubhub, a leading food delivery aggregator, is revamping its subscription program to capitalize on the growing trend of loyalty-based membership schemes in the restaurant industry. Launika Raykar, the Vice President of Loyalty, Customer Engagement, and Partnerships at Grubhub, highlighted the increasing prevalence of subscription models in the market.

Raykar mentioned that subscription programs have become standard not only for delivery platforms like Grubhub+ but also for Quick-Service Restaurants (QSRs) like Panera and Tim Hortons. These loyalty-focused subscription models are gaining popularity as they offer customers added benefits and incentives, becoming an expectation for consumers.

The new changes to Grubhub’s subscription program aim to enhance customer engagement and increase loyalty. The platform is introducing lower service fees, a 5% credit back on pickup orders, and plans for additional perks, including Fuel Rewards in partnership with Shell, providing 5 cents/gallon savings at Shell gas stations.

The decision to reward pickup adoption aligns with consumer preferences. According to a PYMNTS study, a significant number of consumers (16%) prefer to order directly from restaurants’ websites or apps, while a smaller percentage (8%) opt for third-party aggregators like Grubhub. Additionally, pickup orders represent a larger share of restaurant orders compared to delivery.

Grubhub’s subscription program also serves as an effective tool to incentivize adoption of its other verticals, such as convenience, grocery, and alcohol. Subscribers tend to “over-index” on these additional services, showcasing the success of the platform’s strategy to encourage customer retention and usage across various categories.

To boost its subscription base, Grubhub has leveraged strategic partnerships, offering free limited-time subscriptions to Amazon Prime members, Bank of America cardholders, and Lyft Pink subscribers. These partnerships have proven successful in retaining subscribers even after the free trial period expires, particularly among Amazon Prime customers. Given the widespread popularity of Amazon Prime, these long-term retention and frequency patterns contribute significantly to Grubhub’s success in the competitive food delivery market.

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