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How a Yelp-GrubHub Deal Could Impact Groupon

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GrubHub acquired Yelp’s food delivery service, Eat24

Groupon (GRPN) is scheduled to report its 1Q18 earnings results less than two months after its partner GrubHub (GRUB) completed a platform integration with Yelp (YELP). GrubHub integrated its restaurant network onto Yelp’s platform, thereby expanding food ordering and delivery options for Yelp’s users.

The integration followed GrubHub’s purchase of Yelp’s online food ordering and delivery service, Eat24, which brought more restaurants to GrubHub’s network.

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Strategic partnership on food ordering

Last year, Groupon and GrubHub entered into a strategic partnership to allow Groupon consumers to order food from GrubHub’s restaurant partners.

“We’re thrilled to join forces with GrubHub to vastly expand the number of food delivery options available through our marketplace. This partnership connects two of the biggest players in local commerce and is a win for both consumers and restaurants by providing people with more savings and access to the food they want, when they want it,” said Rich Williams, Groupon’s CEO.

Boosting customer retention

There’s a way in which Groupon could benefit from GrubHub’s acquisition of Eat24 and subsequent integration with Yelp. For example, Groupon’s expanding food ordering and delivery options for its customers could go a long way toward boosting its customer retention. As competition with Amazon (AMZN) and eBay (EBAY) for local shoppers has intensified, there’s pressure on Groupon to keep its customers from defecting. Groupon closed 2017 with 49.5 million customers globally.

Groupon could also receive more traffic, which it could in turn monetize through commercials courtesy of the GrubHub-Yelp deal.

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