Amazon agreed to an option to buy a 2% stake in Grubhub and is offering Prime members free restaurant delivery for 12 months.
Amazon is taking a bite out of Grubhub as it continues to widen its already-big omnichannel presence. A new agreement between the retail behemoth and Grubhub parent company Just Eat Takeaway gives Amazon the option to buy a 2% state in the Grubhub business unit.
Because of this deal, Amazon Prime members in the U.S. can now sign up for the Grubhub+ service for a year’s worth of free deliveries from thousands of restaurants. In addition, members can access other Grubhub+ perks and rewards. The Grubhub+ membership program is typically priced at $9.99 per month.
Company executives said that the agreement reflects current market dynamics and opportunities to elevate both organizations. “Both Grubhub and Amazon have transformed people’s lives by providing them with unprecedented choice and convenience,” said Ariella Kurshan, SVP of growth at Grubhub. “With the new Grubhub and Amazon offering, Prime members now can enjoy free delivery from hundreds of thousands of restaurants across the country, when they sign up for a year of free Grubhub+. I’m thrilled that new Grubhub diners from Amazon can get even more delivered to their door with their Prime membership.”
Jamil Ghani, VP of Amazon Prime, said that backing Grubhub is a win-win: “Being able to give Prime members one year of Grubhub+ and no delivery fees from restaurants is our way of saying ‘thank you.’ The value of a Prime membership continues to grow with this offer, and this year is shaping up to be a great time to enjoy the convenience, savings, fun — and deliciousness — that membership provides.”
Kevin Beasley, chief information officer at tech company VAI, shared his thoughts on the move. "The new Amazon Prime and Grubhub deal will provide an enhanced version of the service customers are accustomed to when using Prime: a large selection of options and fast and free delivery. The partnership will not only add to both companies’ retail and food offerings, but it will become a unique way to mutually drive traffic to both sites," he said, adding, "The Amazon and Grubhub partnership is a great example of how rapidly omnichannel operations are growing and why omnichannel is the key to seamless customer experiences online."
Amazon is diversifying into this aspect delivery at a time when a majority of consumers say that buying takeout and delivery food is essential to the way they live. The company aims to help Grubhub close the gap between intent and behavior based on research showing that only 38% of Americans use third-party delivery companies like Grubhub at least some of the time. By striking this deal, Amazon said it intends to make it more convenient for its Prime members to order and receive what they want and where they want it.