Why Seamless & GrubHub Are Buying Online Menu Sites?

The major players in the online food ordering business, Seamless and GrubHub, are planning on casting a larger net.  Right on the heels of GrubHub’s purchase of Dotmenu,(owners of the online menu database AllMenus), Seamless bought MenuPages, the other giant of menu database. Seamless and GrubHub must both have the same idea in mind, but what is that idea? How will it influence restaurants?

Being at the Center of the Online Restaurant World

Menus are one of the primary things that customers search for online when planning to dine out or when trying to place a phone order. They don’t want to disappointed or unprepared. At this point, this is commonplace. Understandably, you may see why GrubHub or Seamless want to be the hub for this information (it’s even in GrubHub’s name). Let’s go through what Grubhub and Seamless will do and how it will make a difference. Although it’s hard to predict how effect these purchases are, let’s go some of the reasons:

  1. Marketing Reach and Brand Awareness
    Only a fraction of the people who have heard of Groupon know about GrubHub and Seamless. They aren’t household names and have gotten limited national press. This is because they are in major cities, but haven’t reached many demographics. Menu databases present an opportunity for these companies to familiarize customers with their brand. Not only will ordering capabilities be integrated into these menu databases, but it presents a place to promote the brand & restaurant clients. The exposure cannot be underestimated if you consider how even people who do a Google search may come across a GrubHub/Seamless backed site just like we do currently for Yelp. GrubHub and Seamless will not be as anonymous as before to huge swaths of the USA, and it’s their hope they will attain the indispensability of OpenTable in the long run.
  2. Integration
    Integration is an alluring idea, putting everything at a customer’s fingertips. It could induce more restaurants to pay the 10% to 15% to have ordering services through Seamless or GrubHub. GrubHub is more likely to go for complete integration with AllMenus as they already have lots of restaurant menus up that they don’t have online ordering capability for. Seamless has never done that, and may shy away from frustrating customers. Still partial integration will help Seamless speed customers over to their ordering service. Also, it will be useful in markets that haven’t been invaded by big online order services. Frequently, customers in those smaller cities go to menu databases before they order. Now Seamless and GrubHub will have a reach beyond the big cities, even if they haven’t obtained any clients there yet.
  3. Ease of Use
    Customers can easily jump over to online ordering with a click of a button. Customers will be attracted to ease in which they can order, and this may pressure restaurants in smaller markets to consider Seamless and GrubHub. While searching these menu databases, customers will start looking for a icon that show that a particular restaurant has online ordering. Other improvements can be made to the customer experience. I think, in addition to whole restaurant ratings, customers will get to rate individual dishes eventually, which may increase customer satisfaction. Seamless and GrubHub are undoubtedly scheming to differentiate themselves as they slowly become more national.
  4. Favor Clients and Create Revenue
    Control of the information allows Seamless and GrubHub promote their clients in both subtle and obvious ways. They may have the menu databases favor their clients through search or just have suggested restaurants column. This gives restaurants more incentives to work with Seamless and GrubHub. It also gives both Seamless and GrubHub the capability to use these menu databases as revenue streams from advertising, whether from clients or third-parties.
  5. Greater Information for Customers and Company
    Online companies function on data. The more they know about the customers the better. They can satisfy their wants with accurate and complete data. Menu databases, in the same way as Yelp, provides a treasure trove of information on online traffic for restaurants. They didn’t have nearly as much understanding as GrubHub and Seamless worked primarily from the customers ordering from their clients. Menu databases produce a much better picture of customers. If Seamless and Grubhub can better predict their behavior, they will become enormously more efficient and effective.

As a business, Seamless and GrubHub won’t find any noticeable benefits overnight with the purchase of menu databases (GrubHub’s ownership of Campusfood however will have a more immediate effect). Nonetheless this consolidation feed their primary business of online ordering. By becoming the middle man for related information like menus, they hope to acquire more clients and expand their online restaurant ordering empires.