Online Food Delivery Market: The Rapid Growth of Grubhub in the US

Although the pandemic severely affected the overall US economy, one sector that thrived was that of online food delivery services. In the United States, this market grew by more than double during the COVID-19 pandemic, following healthy historical growth of 8 percent.

Food delivery apps like Grubhub greatly benefited from increased home delivery demand because of social distancing norms. 

This article will walk you through a brief analysis of the accelerated growth story of Grubhub. For this analysis, we have chosen cities with the highest Grubhub user base (New York, Chicago, Boston). 

Please note that we have also compared some of Grubhub’s insights with that of its biggest competitor, DoorDash.

cities-with-high-grubhub-users

The chart shows that New York has the highest number of users, accounting for nearly 37% of total sales. In contrast, Miami had the lowest share of sales (7%). We can observe that states with higher populations have comparatively high sales. 

Key Insights

  • New York has the highest number of Grubhub listed restaurants (11,655), followed by Chicago (6,150) & Boston (1,997). 
  • 57% to 60% of the customers are happy with their online order experience on Grubhub.

Factors Determining the Success of Food Delivery Apps: Grubhub Analysis

Did you know that Grubhub held the highest share of sales (37%) among leading online food delivery services in New York City? So, what makes online food delivery businesses like Grubhub a success? Let’s find out. 

In this article, we will be discussing some key success factors. These are:

  1. Average Delivery Time
  2. Pricing and Discounts
  3. Cuisine Versatility
  4. Customer Service Experience
  5. Reviews and Ratings

 

Average Delivery Time

Studies have revealed that on-time delivery is a crucial factor to ensure repeat business for food delivery apps. No customer appreciates delays, especially hungry customers. Consequently, average delivery time is one of the most decisive factors in rating food delivery apps. 

Check out the estimated Grubhub food delivery time for New York, Chicago & Boston below:

estimated-delivery-times-grubhub

On average, residents of Chicago have to wait for 41 minutes to get their order delivered using Grubhub. Observe the chart below:

average-delivery-time-grubhub

In a move to avoid customer dissatisfaction and improve their services, Grubhub launched a new feature called ‘Grubhub Guarantee’. This promises consumers on-time food delivery and the lowest price relative to competitors.

If not met, Grubhub makes it right with Grubhub Perks for free food. Users just have to submit their claims on the app. Accordingly, the eligible orders receive Guarantee perks that can be used on subsequent orders.  

Pricing & Discounts 

The United States online food delivery market reached a value of US $21.2 Billion in 2020. One of the most important factors beneficial to these apps’ success has to do with food prices. No doubt the pandemic has set the ball rolling for this market’s rapid growth. However, discounts and scope for savings are the reason people continue to prefer ordering food online.  

The app is also known for its affordable menu options and discount offers. Likewise, Grubhub promo codes let consumers save on every order. In addition, Grubhub+ program offers members attractive benefits like exclusive deals at select restaurants, unlimited free delivery on orders over $12, to name a few. 

Here’s a chart showing the average food item prices on Grubhub:

average-price-grubhub


Cuisine Versatility  

Hundreds of restaurants are being added to the ‘Restaurant Inventory’ on Grubhub each month. So, this enables the app to offer consumers a wide range of cuisines. The chart below gives a quick sneak peek into the total number of cuisines Grubhub and Doordash provide in different cities. 

cuisines-available-on-gruhub

Besides the versatility of options, high quality also attracts consumers to order more. As a result, Grubhub ensures that its users get access to popular, highly rated cuisines at ease. The chart below shows some of the most popular cuisines on Grubhub and Doordash.  

top-cuisines-on-grubhub

 

top-cuisines-on-doordash

Customer Service Experience

A recent survey shows that issues with deliveries disappointed nearly 80% of customers. One way to offer a remarkable customer experience is by ensuring the quality of critical interactions. The survey further revealed that potential issues like inconsistent delivery time updates, the sudden increase in wait times, etc. can be a deterrent to the success of these apps.

Grubhub enforced multiple measures to enhance its in-app customer experience. Subsequently, the firm has urged restaurants to offer as much transparency as possible into the status of every order. The restaurant platform gives timely updates of food packing, pickup, and delivery to users.
As opposed to the traditional minimum of two-minute duration calls earlier, users can now place an order on the app within 45 seconds. 

Reviews & Ratings

Studies show that over 50% of 18 to 34-year-olds take online reviews into consideration when making a dining decision. Ratings, reviews, and overall customer satisfaction play a key role in the popularity of food delivery apps like Grubhub. 

So, how popular is Grubhub?

Notably, users who read reviews on Grubhub are 1.5 times more likely to order than those who didn’t. No wonder the firm places great emphasis on attaining great ratings and reviews from its customer base. 

Grubhub has taken multiple steps to get ahead of its competitors and enhance user experience. Primarily, it enforced a strict protocol that has to be followed by listed restaurants and their delivery partners. These guidelines ensure users receive the right orders on time and with no compromises in quality. This has significantly contributed to achieving positive results.

Look at the chart below:

customer-reviews-grubhub

It is worth noting that nearly 50% of Grubhub’s customers have rated the available menu options 4 out of 5 (in all 3 cities). Observe the chart below:

customer-rating-grubhub

A deeper look at the reviews revealed the sentiment behind them. We summarized the sentiment analysis in the chart below. 

sentiment-analysis-grubhub-reviews

Observe closely and you see that about 57% to 60% of the customers are happy with their orders. Moreover, about 8% of the customers had neutral reviews in all three cities. In comparison, we made an interesting observation that most consumers do not leave reviews and ratings on DoorDash. 

In the diagram below, you can see how nearly 76% of the users keep away from posting reviews on Doordash. Lack of reviews and customer ratings can induce distrust among users, forcing them to migrate to other food delivery apps.

user-ratings-on-doordash

While the food delivery market space is booming, companies like Grubhub and Doordash should not rest on their laurels alone. You must have already understood how focussing on the aforementioned factors can prove helpful in sustaining customer satisfaction and loyalty. 

Ordering-in Is the New Normal

The world has witnessed dramatic changes in ‘how people eat’. A little under two decades ago, restaurant-quality meal delivery was still largely limited to food items such as pizza and easy takeouts. Nowadays, online food delivery has become a global market worth more than $150 billion, having more than tripled since 2017.  

Therefore, if you are planning to set foot in the online food delivery market space, this is the best time. Build a robust restaurant database and sustainable pickup & delivery plan with the help of strategic location datasets. Easily download restaurant chain location datasets and more from the ScrapeHero Data Store

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