Three Reasons The Shake Shack-Grubhub Partnership Fell Short, And What Marketers Can Learn

​ WRITTEN BY
Nabeel Alamgir
Chief Marketing Officer at Bareburger, overseeing the company's outreach for 47 organic better burger restaurants across 5 countries.​

In recent restaurant news, Shake Shack’s third-quarter sale numbers are in — the first report since its exclusive partnership with Grubhub, a food delivery service. After cutting out all other delivery services, the establishment didn’t get the numbers that were projected.

The major bright side of this exclusivity deal is that Grubhub agreed to share customer data — an invaluable influx of information often withheld by restaurants’ external delivery sources. While Shake Shack hopes to fix the drop with marketing and customer loyalty, I believe there are three clear reasons the initial launch didn’t go as planned. And working as a chief marketing officer for a fast-casual burger restaurant, I see three lessons marketers can learn when looking to develop a successful brand partnership.

1. Multiple Partners And Market Saturation

Grubhub was one of the first majorly successful food delivery services, founded in 2004. Now, a decade and a half later, we have newer, shinier services. New toys. New deals. An oversaturated market. To partner with just one service is already a risky decision, especially when the decision is companywide. Each major U.S. city has its own market leaders, and within the realm of food delivery, the numbers are supremely scattered. Sure, Grubhub (thanks to Seamless) dominates the El Paso, Texas; New York and Jacksonville, Florida markets. However, in Los Angeles; Austin, Texas; and San Jose, California, Postmates, Uber Eats and DoorDash win the popularity contest.

I’ve found that many millennials and Gen Zers prioritize ease and efficiency over brand loyalty, especially when it comes to large corporations. If a brand doesn’t come up when typed into our food delivery app search bar, we’re probably not going to go looking for it — we’ll instead find the quickest, highly rated, least expensive replacement. This “out of sight, out of mind” concept is detrimental to any restaurant looking for exclusive delivery service partnerships.

When considering a partnership opportunity, it is critical that you find a company that shares your company’s vision, belief system and social message. You must be a match in regards to ethos in order for the partnership to make sense. I also advise that your potential partner is a relatively new company that has shown innovation among its preexisting competitors and a warm reception on social channels. This shows promise for success among millennials and Gen Z. Pursuing multiple partnerships may pose less of a risk altogether, but sometimes a really good exclusivity deal can pay off better if the partnership turns out to be as successful as anticipated.

​2. Brand Image

Grubhub has made headlines this year, suspected of buying up web domains that mimic those of smaller restaurants and cherry-picking restaurant phone orders — if a customer calls a restaurant through contact information provided on the Grubhub website or app, the call is relayed through Grubhub’s service, and the company automatically takes a cut.

While the company has been pretty successful in maintaining control of its mistakes, a negative brand image can affect a partnering brand. Twitter and Instagram have supplied a platform that makes widespread word possible — as soon as something goes viral, that’s it.
When you go public with a partnership, your company is suddenly and automatically backing the other company’s actions, whether you have anything to do with them or not. Aside from properly vetting your new partner before anything is signed or announced, a good public relations team is always a good idea.

If negative practices come to light after the partnership is cemented, I always go the route of transparency and honesty. I find that our peers and younger generations are more understanding when a brand appears vulnerable and human after any sort of bad publicity — as long as it is genuine and apologetic. Sure, you can disconnect yourself from the practices of your partner by articulating that you had no idea, but also own up to the fact that its actions are now your responsibility and you have a plan in place to fix whatever wrongdoings have occurred. Be truthful, apologetic and solution-oriented.

3. Values Match

It’s important for marketers to note that today, 87% of consumers (download required) buy a product based on the company’s advocacy on an issue or belief they care about.

Shake Shack became a billion-dollar company, in part, because it is a lifestyle brand. The company embodies the millennial culture’s values, aspirations, interests and opinions as a beautifully successful marketing plan. Sweetgreen capitalized on the same idea, which resulted in the same billion-dollar success. Sweetgreen integrates its own ordering technology — an allergy option on its site that allows a customer to input allergies and then eliminates all ingredients of danger — that fits the brand and consumer demographic. This type of feature demonstrates compassion and carefulness that leaves an impression.
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Grubhub, however, has very transparently been about profit, which doesn’t align well with this type of brand’s image. I mentioned before how important it is to make sure your partnerships match up. Get to know the company you’ll be working with. Spend time in its spaces. Read every article that ever mentions it. Ask your employees what they think of the potential partner. Ask your friends, your family. Get out of your money-making headspace, because the money you’re thinking about will not be made if this partnership is misaligned.
A good alignment promotes a genuineness that consumers will be able to see and appreciate without any extra work on your end. A partnership that makes sense is like a well-oiled machine — each fills the other’s gaps and shortcomings to create a powerhouse that illuminates and fosters incredible strength and success. A powerful, properly aligned partnership knows no bounds.