Food (Gifting) for Thought: How Grubhub Beefed Up its Gift Card Program

Thanks to people’s busy schedules and perpetual desire for convenience, the U.S. online food takeout market is consistently growing. Mobile food ordering and delivery helps connect people with their favorite restaurants with little more than a few thumb swipes and so it only seems fitting that consumers would want the ability to treat someone near or far—or even themselves—to these restaurants with a gift card.

Go-to platforms like Grubhub are increasingly digging into the rewarding U.S. gift card market.

Grubhub, a leading online and mobile food ordering and delivery marketplace, works with Blackhawk Network to give people a simple way to share the joy of mealtime with those they love, wherever they may be, through an online gift card portal. Its partnership with Blackhawk Network has enabled Grubhub—and by extension Seamless (the company’s New York-based brand)—to establish and grow its gift card commerce solution. Most recently, Grubhub launched a B2B bulk distribution platform, powered by Blackhawk Network, to expand distribution and take advantage of incremental revenue.

Want to follow in Grubhub’s footsteps and take your gift card program to the next level? Alex Barseghian, Group Vice President of Retail at Blackhawk Network, shares tips to help retailers boost brand awareness and distribution to increase their ROI.

Upsize your B2B gift card business through bulk distributions.

“According to data from Mercator, the overall B2B gift card market has more than doubled over the last decade and now makes up around 23 percent of the total gift card market,” said Alex. In order to capitalize on this opportunity, Grubhub and Seamless used Blackhawk Network's Business eCommerce Product to launch their first B2B bulk distribution platform and grow their existing B2B gift card program. “The B2B bulk distribution platform enables Grubhub to sell gift cards in bulk, at a discount, to resellers or directly to companies for a variety of purposes such as employee and partner incentives, consumer loyalty and promotional opportunities,” added Alex. “It’s also worth mentioning that Blackhawk Network's Business not only ensures customer engagement at multiple touch points across the entire customer lifecycle, but supports all aspects of the program and makes it easy to manage and distribute the gift cards.”

There’s an appetite for physical and digital gift cards; offer both.

Grubhub’s partnership with Blackhawk Network began back in 2016 when it partnered with Blackhawk Network to launch a gift card page for Seamless. Starting off with egifts, today, Grubhub and Seamless have expanded their offering to include physical gift cards as well. “While egifts are easy for consumers to buy, give to others and keep track of and are an additional channel for retailers, physical cards are still alive and well,” said Alex. “People still like the tangibility of a physical gift card and according to recent Blackhawk research, physical gift cards are purchased more frequently as gifts than egifts. For example, 69 percent of surveyed consumers buy physical gift cards as gifts for birthdays versus 26 percent who buy egifts.” 

Add self-use gift cards to the menu.

“Consumers want to buy gift cards for themselves, not just for others,” noted Alex. Blackhawk’s research finds that when it comes to self-use, 40 percent of surveyed consumers buy physical gift cards and 66 percent buy egifts. More specifically, restaurant gift cards rank second after online retailers among surveyed consumers when it comes to gift cards purchased for self-use in the past 12 months.1 Recognizing that gift cards—both physical and digital—help consumers set and manage their food ordering budget, Grubhub has customized its checkout process to let consumers buy gift cards for themselves. “Self-use presents an opportunity for brands to accommodate buyers with a specific need so make sure to cater to this kind of behavior,” said Alex.

Keep it sweet and hire a professional.

Gift card programs have many moving pieces. Given that a B2B gift card program serves multiple segments—including consumer and employee incentives—navigating processes like fulfillment, payment, and settlement can become complicated. “Do not underestimate the challenge of managing the gift card program,” said Alex. “By enlisting the help of Blackhawk Network, which streamlines its operations, marketing and fulfillment, Grubhub is able to free up time and resources to focus on what it needs to: client relationships,” he added.

The mass appeal of both on-demand food delivery and gift cards together offer a big opportunity for brands. Just like Grubhub, be sure to explore the value in expanding your gift card program. “Don’t miss out on a $26 billion B2B industry. Invest in a B2B bulk distribution platform to grow your brand awareness, gift card distribution and, ultimately, your revenue,” concluded Alex.

1 The consumer research includes two online surveys conducted by Murphy Research on behalf of Blackhawk Network between Feb 4 and Feb 12, 2019. Retail Trends and Transformations included a sample size of 3,381 respondents between the ages of 18–75. Gift Card State of the Union included a sample size of 3,389 respondents between the ages of 18–75.