GrubHub User Engagement Presentation
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Ishan SenguptaSeguir
Product Analyst at Spies & Assassins em Spies & Assassins
GrubHub User Engagement Presentation
- June 2015 Presentation
- Market opportunity The Market 360 Thousand Restaurants $220 Billion by Americans $70 Billion Through Takeout/Delivery
- GrubHub’s Share 30 Thousand Restaurants for Takeout or DeliveryNearly $2 Billion Gross Food Sales 5 Million Active Diners 180 Thousand Daily Orders
- Huge Market Potential
- $2 Billion Gross Food Sales 39% YoY Growth 5 Million Active Diners 47% YoY Growth 30 Thousand Restaurants 41% YoY Growth GrubHub’s Growth
- So what’s the problem? GrubHub’s 2-Sided Network
- “How often do you to order takeout/delivery online from a restaurant you’ve never had before?” Never 15.6% Seldom 37.5% Sometimes 25% Often 12.5% Almost Always 9.4% 12.5% 9.4%
- So what’s the problem? 1. User Engagement 2. Restaurant Acquisition 3. Market Share Retention
- Competitive Map Strong UX Low Volume Weak UX High Volume
- Benefits delivery.com GrubHub / Seamless Eat24 TryCaviar Rewards & Loyalty Program Picture Menu “Try New” Recommendations Most Popular Dishes Most Liked Dishes Feature comparisons
- Filter Button - “Try Something New” Picture Menu - “Great Discoveries” Loyalty Program - “Most Valuable Foodie” Our solutions
- SWOT analysis 1. Leverage largest restaurant-diner network 2. Proven Track Record - Restaurants: 41% YoY Growth - Customers: 47% YoY Growth Strengths 1. Increased discoverability is just a transfer of wealth until it leads to more 2-sided acquisition 2. Loyalty Program will cut into profit margin Weaknesses Promoting New Restaurants to Diners will: 1. Increase GrubHub’s restaurant acquisition 2. Increase Diner engagement and use Opportunities 1. Increasing discoverability may harm markets with limited options 2. Users may be risk averse to trying new places Threats + Helpful - +External--Internal+ Strengths Weaknesses Opportunities Threats Extensive 2-Sided Partner Network Track Record Discoverability = Revenue Cost of Loyalty Program Limited Markets may suffer from Initiative Improve Restaurant Acquisition Increase Diner Engagement Improve 2-Sided Retention - Harmful + Helpful - - Harmful + +External--Internal+
- Deliverable Goal Metric Effort 1 = High 10 = Low Impact 1 = Low 10 = High Priority Highest to Lowest Timeline Filter Button (Try Something New) Increase Engagement 3-5% of Daily Orders 9 4 36 = 1st Q1 Picture Menu (Great Discoveries) Increase Engagement 5-7% of Daily Orders 5 7 35 = 2nd Q2-Q3 Loyalty Program (Most Valuable Foodie) Increase Retention 10% NPS Growth 4 8 32 = 3rd Q3-Q4 Feature Prioritization Matrix & Metrics
- Timeline Restaurant Discovery Impacts 1. User Engagement 2. Restaurant Acquisition 3. Two Sided Retention Stakeholder Meetings Feature #2 - Great Discoveries Picture Menu Gather Data Analyse Data Feature #3 - Rewards & Loyalty Program Business Analysis Loyalty Percent Feature #1 - Filter Button Create Algorithm
- Stakeholder Matrix MANAGE Executives SATISFY Developers MONITOR INFORM Marketing Operations Strong Influence More Interested Weak Influence Less Interested Sales UX Design Restaurant Partners Users
- Project Roadmap - Feature #1 “Try Something New” Filter Button Update Database Create Filter July 2015 August September Plan Build UX Testing Build QA & Improvements QA Fixes DevelopmentTeam 1 Quarter
- Project Roadmap - Feature #2 “Great Discoveries” Picture Menu Gather User Data Analyze Preferences October 2015 November December January 2016 February March Plan Plan Create Algorithm Prototype Picture Menu Build Usability Testing & Optimize UX Integrate Algorithm Plan Plan Build DataTeamDesignTeam QA & Improvements QA & Improvements QA QA Fixes Fixes Add Ons Add Ons 2 Quarters
- Project Roadmap - Feature #3 “Most Valuable Foodie” Loyalty Program Optimize Loyalty Rates Determine Reward Ratio March 2016 April May June July August Plan Plan QA & Improvements Update Account Details Integrate Loyalty Points with Payment QA & Improvements Build BusinessTeamDevelopmentTeam QA QA Fixes Add Ons Build 2 Quarters
- (In Thousands) Year End 2013 Year End 2014 Projected 2015 Updated 2015 Diners 3,421 5,029 7,380 7,653 Gross Food Sales 1,014,900 $1,787,400 2,449,617 2,484,842 Sales and Marketing 37,347 128,710 108,573 111,433 Development and Operations 34,173 62,509 93,943 97,496 Net Income (before taxes) $14,889 $44,984 $75,903 $77,285 Projections
- Potential Future Developments Expand Loyalty Program Partner With Third-Party Vendors For Point Redemption
- Q&A Ishan: ishans@grubhub.com Igor: igork@grubhub.com
Notas do Editor
- Good Morning, I’m Ishan, this is Igor, and we are Product Managers here at GrubHub. We are going to take the next 10 minutes to talk about 3 things. The industry, the competition, and what we can do to stay on top.
- Last year, Americans spent over 200 Billion dollars at 360 Thousand Restaurants. Of that, nearly 70 Billion dollars was for Takeout or Delivery. This is GrubHub’s market opportunity
- GrubHub finished 2014 with over 5 Million Diners and 30 Thousand Partner Restaurants. Resulting in nearly 2 Billion dollars on Food Sales, making it by far the largest competitor in this industry. You may be asking, How does 2 Billion in Sales in a 70 Billion Dollar Market, make GrubHub the biggest player?
- It’s because, as of last year, only 5%, or 3.5 Billion Dollars Worth, of takeout / delivery service was ordered online. Currently, the vast majority of takeout and delivery is still done by using paper menus and phone calls. But online ordering is growing exponentially, and competition is becoming more fierce. Let’s take a deeper look at this growing market in terms of GrubHub.
- Our Year over Year growth for Food Sales was 39%, for Restaurant 41%, and for Active Users 47%. These growth rates are highly dependent on one another, because of GrubHub’s 2-sided network between diners and restaurants. If growth in one of these areas begins to struggle, the others will follow. Here’s how the 2-sided network works.
- GrubHub’s growth relies heavily on finding new restaurants to join its network. More restaurants leads to more diners who value those restaurants. Which creates more orders and sales, which attracts more restaurants to join the network! So what’s the problem?
- According to our survey, many users order the same old dishes from the same old restaurants. In fact, over 50% of those surveyed said they “Never” or “Seldom” order from new restaurants. This hurts GrubHub in three ways.
- First: Users ordering the “same old dishes” represents decreased engagement. Second: Lesser user engagement may impact new restaurant’s willingness to join the network. And, lastly, competition is growing fast, and, with less desirable User Experience, our market share may be at risk. Let’s look at the competitions UX
- While GrubHub has the largest network of Restaurants, it falls a bit short in UX. Here is a clip from one of our usability tests.
- Now let’s look at a Feature Comparison Matrix between us and the competition
- Here are some of the comparative highlights: Delivery.com has a loyalty rewards program that helps retain customers Eat24 offers meal recommendations that make the process faster And TryCaviar has picture menus that are visually engaging. It’s time for GrubHub to adapt.
- To encourage users to discover new restaurants, our first addition is a “Try Something New” filter. The second feature is a picture menu, called “Great Discoveries”. It will display popular meals from a variety of restaurants that the user has not ordered from before. This will improve our revenue flow, because restaurants will pay an additional 1% commission fee to be featured here. The third feature will be a loyalty program, called “Most Valuable Foodie”. Users can earn a standard rate of points on regular orders, or a higher rate when they order from a new restaurant. Let’s take a look at 2 Personas who will benefit from these features. Then we’ll take a look at the prototype, so that we can better explain their functionality.
- Rachel represents our favorite type of customer. She loves discovering new restaurants, instagramming food pics, and she orders food online several times a week because of her busy schedule.
- William uses GrubHub on the weekends. William wants to see pictures of his food prior ordering to alleviate some of his concerns. He also is a financial advisor and wants to make sure he gets the best bang for his buck. Now, with these personas in mind, let’s take a look at our ProtoType.
- This is the current Seamless Website. It has filters on the left side, account details on top, and the search is right in the middle
- This is our new prototype. We’ve added all 3 features. 1st, we have a new Filter Button called Try Something New on the left. 2nd is our new Great Discovery Picture Menu that shows popular meals from a variety of new restaurants. 3rd is on top, our Rewards Button, that will provide users with information about their points. All 3 of these features are aimed to increase user engagement and retention, which will improve our restaurant acquisition. Let’s see what happens when we click on the New Filter Button
- Now, only New For You restaurants are available. This is attractive to customers, like Rachel, who love quickly discovering new cuisines. Or users can choose a popular meal on the top of their page. These meals will be personalized for each user based on an algorithm that takes their order preferences into account.
- This Picture Menu allows users, like William, to quickly and securely order meals.
- Users can add basic items to their order if they want, or they can go back and see the full menu. Well, we’re not going to order food now, so let’s instead check out the rewards page.
- Here is the rewards page. Users can see their points and track their progress. To better understand how these features will impact our business, we did a SWOT analysis
- Our biggest strength is that we are currently have the largest online restaurant network. This ensures that users will have lots of options when they look for “new” restaurants. Another strength is our track record - 47% user growth and 41% restaurant growth shows that we are clearly ramping up our customer base. One weakness is that these features don’t necessarily increase revenue, since we are just redistributing orders between current restaurants. But, these features will encourage restaurant acquisition, which can improve our bottom line since that attracts more customers. Also, our loyalty program will hurt our margins, but this problem should be alleviated by the fact that restaurants will have to pay a higher commission rate to be feature in our “Great Discoveries” picture menu. All of these new features give GrubHub an opportunity to increase engagement, acquisition, and retention One major threat is that in limited markets, where variety may be low, discoverability will be difficult. We’ve determined that the benefits outweigh the costs for all 3 features. Now let’s look at the timeline.
- While the Filter Button will have a low impact, it will be relatively easy to implement, so we will do it first. The Great Discoveries picture menu will have a higher impact, but will take longer to implement, so we will focus on that second. And lastly, the rewards program will have the largest impact, but it relies on several moving pieces, so it will be the hardest to implement, so we will focus on that at the end. To begin the process, we need to first start by building “buy-in” through stakeholder meetings.
- We are currently here, at one of our Stakeholder Meetings, meeting with executives, to explain how restaurant discovery impacts engagement, acquisition, and retention. Let’s look at the other stakeholders in this process.
- We will need to persuade our executives (you guys) and our restaurant partners that this will benefit both our business, and theirs. Then we will need to manage our sales and marketing team to make sure they start reaching out to restaurants about the picture menu. We will need to monitor our UX, Development, and Operation teams to ensure everything is moving on track And we will need to inform our users of the changes to expect! Here is our timeline
- By August next year, all 3 features should be in place. Let’s finish by looking at the impact this will make on our bottom line.
- Here we have the year end numbers for the last 2 years. If growth rates continue at this rate, here are the Project 2015 numbers. With out new features, we will attract more restaurants, which will increase our Diners, and Thus Food Sales. Implementing these features will increase our costs in Sales and Marketing and Development and Operations, finally Resulting in a slightly higher Net Income, with even more potential in the years to come.
- Thank you for your time. Please let us know if you have any questions. If you want to get in touch with us later, our contact information is here.