Industry News | July 29, 2015 | QSR Exclusive Brief

Groupon Launches Order and Delivery Program

image used with permission.

Delivery is about to become more convenient for restaurant patrons and operators. Or at the very least, that is Groupon’s mission with its new delivery and takeout program, Groupon To Go, which launches in Chicago today and other metropolitan areas beginning with Boston and Austin, Texas, this fall.

Since March, Groupon had been testing the program at 500 establishments in the Chicago area, and earlier this month it acquired third-party mobile ordering and delivery platform OrderUp, which had been backed by AOL cofounder Steve Case’s investment firm Revolution Ventures. Under Groupon To Go, customers can use their existing Groupon account on the mobile app or website to order delivery or takeout at a 10 percent discount.

“Groupon has been working with tens of thousands of restaurants, and we’ve seen that takeout and delivery has been an option that both restaurants and consumers are interested in,” says Sean Smyth, vice president and general manager of the fledgling program. “We want to work with many restaurants, not just ones that are offering deals.”

As digital coupon companies continue to search for a more sustainable business model than one-time deals, Groupon has the potential to tap into the burgeoning digital ordering space. According to the NPD Group, phone and digital orders are nearly neck and neck: In May 2015 phones accounted for 1.02 billion orders, while digital clinched nearly 904 million.

In addition to independent restaurants, Chicago locations of major chains including Subway, Papa John’s, Popeyes, and Quiznos have also signed up. Concepts that already offer delivery can use Groupon To Go without changing their system, while concepts that lack such an infrastructure can use Groupon’s resources to fulfill deliveries, Smyth says.

“When it comes from the restaurant’s perspective … flexibility and scale are the two things that we offer them. On the flexibility side, if the kitchen is busy, they’re able to basically turn it on or off,” Smyth says. He adds that can turn the delivery option off and on at their discretion with no restrictions or penalties from Groupon To Go. “There’s only so many companies you’d want to work with; there’s only so many ways that you want to indoctrinate some new process to your team and staff—that’s where the scale comes in. You don’t want to waste a whole bunch of time setting up some relationship with some company that may or may not be there next year.”

Indeed, few third-party digital takeout and delivery services can boast Groupon’s breadth—25 million active users in North America alone, according to the company. While OrderUp will continue to operate in roughly 40 mid-tier cities, the ultimate plan is for Groupon To Go to penetrate North America and eventually international markets, as well. Smyth adds that it would be a boon for chains with locations abroad that could streamline its ordering system with a single partner across the globe.

“OrderUp has done well focusing on some of the smaller, midsized markets, and Groupon has crazy scale in larger, metropolitan areas so when you put that together, you’re talking a footprint that’s frankly going to be very unique,” Smyth says. “It’s a really lovely system.”


By Nicole Duncan

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