Retail

2019: The Year Of Retailer And Delivery App Collaborations

2019: The Year Of Retailer, App Collaborations

This year, apps aimed to make it easier and more convenient for consumers to order their favorite foods and sundries, with restaurants and other retailers tapping into delivery. To help bring these options to more consumers, retailers and technology companies decided to join forces.

Starbucks kicked off 2019 by adding additional cities to its delivery network through a partnership with Uber Eats. It launched the expansion into San Francisco in January, with plans to extend the service into New York, Boston, Los Angeles, Washington, D.C. and Chicago.

Roz Brewer, the company’s president and chief operating officer, said per reports at the time, “We’re building on key learnings from past delivery pilots, and by integrating our ordering technology directly with Uber Eats, we’ve unlocked the ability to bring Starbucks to customers for those times when they’re not able to come to us.”

Then, in February, Dunkin’ CEO David Hoffmann said in an earnings conference call that the company was teaming with Grubhub for a delivery pilot that links directly with its point of sale (POS) systems. Hoffmann said at the time, “Grubhub is No. 1 in the delivery space, and we’re excited to add them to our list of high-quality partners.”

In March, Papa John’s announced a partnership with DoorDash, providing the option for delivery from over 1,400 of its locations across the country. Anne Fischer, SVP of customer experience, said in a press release at the time, “This partnership extends our continued commitment to meet customers wherever they are and provide simple, easy ordering for guests in addition to our own world-class Papa John’s mobile app.”

Quick-service restaurants (QSRs) are well aware of the benefits that mobile order delivery provides. According to the latest PYMNTS Order to Eat Tracker, “Customers typically spend more through mobile or online channels than when buying in person, making delivery lucrative and prompting fast-casual chains to encourage such ordering.”

And exclusive restaurant partnerships can act as differentiators in the increasingly crowded landscape, offering benefits beyond pricing models and fee structures. In July, McDonald’s announced its new alliance with DoorDash, effectively terminating its relationship with Uber Eats, which went back to 2017. The restaurant chain was to be a part of DoorDash’s DashPass subscription service, which grants unlimited free delivery on orders of $12 or more.

But delivery app growth has not been without friction this year. In September, New York City Council Member Mark Gjonaj complained that Grubhub was cutting into restaurant profits by charging high fees. And it was noted that restaurant owners grumbled about the fees at a June meeting of the small business committee of the New York City Council. They reportedly said app-based delivery services don’t bring more customers to their dining rooms, and that they actually move people away.

Even with the frictions and challenges that delivery apps experienced this year, they expanded their partnership efforts beyond restaurants.

Moving Beyond Restaurants

In October, Walgreens and Postmates announced a collaboration to offer on-demand delivery for shoppers seeking health and wellness items. Postmates was to deliver hundreds of the retailer’s items from 174 Walgreens and Duane Reade locations in Manhattan and Brooklyn.

Walgreens Chief Merchandising Officer Joe Hartsig said in a press release at the time, “We share Postmates’ commitment to providing customers with convenient, differentiated shopping experiences, and together we can help ensure our customers are getting what they need, when they need it."

Other restaurants collaborated with third-party delivery apps later in 2019. In November, Dine Brands linked up with Postmates to offer delivery from thousands of locations, integrating delivery orders into IHOP’s and Applebee’s POS systems.

Dine Brands CEO Steve Joyce said in the announcement at the time, “Dine is committed to delivering exceptional dining experiences for our guests, whether they are enjoying our craveable meals at home or in our restaurants. We are proud to join forces with partners such as Postmates, who are aligned with our guest-centric value.”

From Dine Brands to Walgreens, a range of businesses from restaurants to pharmacies teamed with third-party apps to provide shoppers with the convenience of delivery in 2019.

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