QSR Delivery Scramble: Jimmy John’s Joins Up With DoorDash
“Never say never,” the simple advice most of us have been getting since childhood — a warning against universal pronouncement about what one will, or will not do, for the rest of time. It is advice the team at Jimmy John’s might have taken in early 2019 when they announced they would never go in for delivery services proffered by a third-party platform.
“We are, faster, fresher, better value, and more consistent at delivery than the third-party services,” James North, CEO of Jimmy John’s, said in a statement. “We have a relentless focus on the entire process, from the moment we start slicing fresh produce and baking bread at 6 a.m. to the moment we hand a sandwich to a customer. We want to control the experience from the fresh prep to the handoff to the customer.”
It seems, however, that never was a bit of an overestimation as roughly 22 months after that bold pronouncement, Jimmy John’s has reconsidered how much of the experience it really wants to control, and has determined that it would rather be making the sandwiches and hand off the delivery to someone else. That someone else is, in this case, the food delivery platform DoorDash. The two firms today announced a new partnership as the private equity-owned food brand is looking to expand its customer base and upgrade its delivery services for customers.
“As a brand, we are relentlessly focused on reaching our guests on their terms,” says Darin Dugan, Chief Marketing Officer at Jimmy John’s. “In DoorDash we found a third-party partner that shares this commitment and offers us the ability to further reach our consumers where they increasingly are – digitally. We are so thrilled about this relationship and the visibility to consumers it provides for our brand, both now and in the future”
Under the terms of the agreement, Jimmy John’s will participate in Door Dash’s recently rolled out self-delivery service which allows restaurants to handle their own deliveries in-house but benefit from the reach of the DoorDash app. The new pair-up will be piloting in 100 restaurants over the next six months before making it a permanent chainwide deal. Jimmy John’s will also join DoorDash’s subscription program, which offers unlimited free delivery fees to paying members — giving it access to the more than five million consumers who had signed one with the service since September.
So why the about-face?
First, Jimmy John’s is not quite the same sandwich shop it was when it first said it was never going to be interested in jumping into the wild world of third-party delivery. It is literally under new management since it was acquired by Inspire Brands in November 2019 — a portfolio firm for Atlanta private-equity firm Roark Capital that also owns Arby’s, Buffalo Wild Wings and (soon) Dunkin Donuts and Baskin Robbins Ice Cream. All brands that incidentally already have DoorDash delivery deals.
Secondly, with the roll-out of self-service DoorDash participation, the service being offered today isn’t quite the one Jimmy John’s initially rejected in 2019 in favor of using its own nascent delivery service. As of 2020 and the new deal it seems they don’t have to choose between the two.
“With Self-Delivery, we set out to build a product that would enable Jimmy John’s, and other restaurants, to reach DoorDash’s customer base while complementing their own existing delivery operations,” said Sanjay Kotte, head of strategic partnerships at DoorDash.
And, perhaps most persuasive and pervasive has been the simple reality of the year 2020, the global pandemic and the changes to consumer dining habits that quick-service restaurants (QSRs) have had to rapidly adapt to over the last eight months. Jimmy John’s brings itself to the delivery platform as consumers are increasingly turning to them as a replacement for actually dining out. As such it’s a good way to keep business alive in consumer’s minds until a vaccine becomes a live option. According to the PYMNTS/PayPal How We Shop survey data, 19 percent of consumers have shifted their dining habits to online ordering away from dining in restaurants since the pandemic began. Their enthusiasm for eating in restaurants is high. In fact, according to PYMNTS data, it has been on the rise since we first started surveying consumerism in the spring. But the majority has made their standard for getting eating out and other normal life activities clear. Until there is an effective vaccine in circulation, 59 percent would rather wait it out at home.
According to the latest edition of the PYMNTS order to eat tracker — the delivery industry has grown among consumers by 20 percent over the last five years and 70 percent of consumers have used their smartphones to interact with restaurants. There are 446,680 restaurants around the nation using at least one of the top 16 food delivery apps, including 270,730 establishments with fewer than four locations, QRS magazine said.
And the COVID-19 pandemic — and the months of being shut-in and scared to eat in restaurants has only accelerated this trend. This means Jimmy John’s is embracing digital delivery and partnering with a firm it explicitly said it never would for pretty good reason — everyone else, it seems, is already getting on board.
Read More On Quick Service Restaurants:
- Today In Payments: POS Startup Valued At $8B; PayPal’s Schulman Says Consumers Moving To Crypto In Droves
- Deep Dive: Why QSRs Should Lean On Loyalty To Personalize Mobile, Online Dining
- Chipotle On Capturing Loyalty Program Members Amid Rising Pandemic-Driven Digital Sales
- Deep Dive: How AI Can Help QSRs Profit By Quashing Fraud And Keeping Customers Satisfied