Skift Take
Grubhub wants to move beyond delivery through its LevelUp partnership and other partnerships with fast-food chains. Making life easier for restaurateurs through point-of-sale integrations that are easy to use, though, will help it differentiate from its competitors among its restaurant partners.
When Grubhub announced its intention to acquire restaurant tech provider LevelUp for $390 million in July, it was easy to see how LevelUp's loyalty offerings and point-of-sale integration could be crucial to Grubhub's growth in a highly competitive sector.
Stan Chia, chief operating officer of Grubhub, said Monday at Skift Restaurants Forum in New York City that closing on the company's acquisition of LevelUp will allow for deeper partnerships with its restaurant partners. Beyond just partnerships, though, life will become easier for restaurateurs already using Grubhub.
"I never think about this space as third-party delivery, we think about ourselves as a wonderful marketplace where everyone comes together," said Chia. "We think there's a big opportunity in pickup as well, and we look at LevelUp as an organization through pickup. When we looked at this deal, we said they're going to accelerate our ability to be a better partner with restaurants...
"The restaurant space is where retail was 10 years ago, with customers and diners looking to move online. We look at it more as a way to further unlock online; pickup is another channel that is going to unlock this opportunity."
Instead of competing against rivals like Caviar or UberEats, the focus is on unlocking the parts of restaurant ordering that remain offline. Customer data will be crucial to leveraging pickup and LevelUp is good at collecting and analyzing that data.
"At the end of the day this is a hospitality business, this is about the guest restaurant experience," said Chia. "It's a true statement that a lot of orders are still coming in over the phone. There's over $100 billion that is coming through [offline] channels and we think a lot of it is coming through the phone."
Chia also dished on Grubhub's partnership with Yum Brands to bring online delivery to the company's Taco Bell and KFC locations. Keeping the integration simple with existing systems will be key to appeal to the fragmented group of franchisees for whom margins are tight and complexity is a headache.
"A lot of markets we will expand to will cover the Taco Bell and KFC footprint," said Chia. "We will double our footprint. To enable a channel like this you've really got to work on a way that's as operationally simple as possible. I was in a Taco Bell two weeks ago and it's a beautiful thing when it's integrated. When you have thousands of locations, you have to retrain everybody to do anything. You have to do almost not
