When restaurants were faced with complete closures of dining rooms in March, they quickly pivoted to takeout and delivery to try and keep the lights on. The top food delivery companies also stepped in with solutions to help restaurant partners survive, but DoorDash was particularly aggressive.
The aggregator, which leads the space by market share, rolled out tools for merchants and commission-free deals, as well as streamlined access to PPP applications and cold weather grants to help restaurants expand into new channels and generate sales.
At the start of pandemic restrictions, DoorDash sent out automated calls to restaurant partners to see if they wanted to update their menus, hours or other operations on its platform to grow their off-premise revenue, Monica Challingsworth, co-founder and president at consultancy Eustress and Demeter, said.
"I think that they do a really good job about trying to work directly with operators to help them on commission percentages [and] to help them with what they need," Challingsworth said.
Throughout the summer, the aggregator unveiled a flurry of digital assets for delivery and pickup. In July, it added DoorDash Storefront, which provided restaurants with a turnkey online ordering site. DoorDash also created DashMart in August, where it could sell retail products like barbecue sauce produced by restaurants directly to consumers, Kevin Huang, head of merchant strategy and operations at DoorDash, said.
For restaurants wishing to grow their takeout options, the company offered QR codes to provide contactless in-store ordering. DoorDash also added a customer tracking tool so that restaurants knew when a customer was arriving to pick up an order.
"I think the rollout of some of these things like Storefront, increasing adoption of our Drive product, has helped paint that picture of we’re their partner," Huang said. "We also want to enable a platform in which [restaurants] can choose based on [their] needs."
To try and tailor its products to solve restaurants’ most pressing challenges, DoorDash launched a Restaurant Advisory Council during the pandemic that includes restaurant operators and owners. These members work with DoorDash’s product, merchant strategy and operations teams to develop resources, are early adopters and provide product feedback, Huang said.
Providing support beyond products and services
While it was a private company backed by SoftBank, DoorDash innovated in ways that public competitors couldn't, namely being able to invest millions of dollars to help restaurants generate sales and secure industry goodwill, Bobby Mollins, research analyst, lodging and restaurant team at Gordon Haskett, said.
For example, it launched Local Restaurant Saturday, offering promotions around ordering from local merchants, and partnered with Bluevine to help restaurants apply for PPP loans. It also teamed with Kiva, a nonprofit microlending platform, to provide loans to Black-owned restaurants, which it will match. This momentum doesn't seem to be slowing down even as it looks to go public, announcing just one day before filing its IPO plans in November, its five-year, $200 million initiative Main Street Strong Pledge to be used in local communities.
These purpose-driven programs appeal to millennials and younger demographics, who are among the consumers most interested in social issues, Mollins said.
"What they've really done was just put the profitability aside and said, 'Let's just do the right thing,'" Mollins said. "They did it with the best intentions, but they also benefited from it as well so they're able to do a two birds with one stone kind of thing."
DoorDash’s challenge going forward, especially as a public company, will be to maintain its goodwill image as it likely faces increased scrutiny on profitability. So far, the company has slowed down on promotional offers, Mollins said.
"They really struck a balance between reporting to shareholders and doing the right thing by their customers and their restaurants," Mollins said. "But you will eventually see the moment where they will have to really start focusing on profitability."
Another challenge will come when free commission offers expire and newly signed partners face higher rates, Challingsworth said, adding that this will be a concern for a lot of independent operators who were stressed by pandemic pressure and quickly signed up without understanding their menus or costs.
"I would really like to see them revisiting those conversations," Challingsworth said. "Having open conversations with small operators to … large groups and really hearing both sides I think is going to make them more successful in the end."
Regardless of its potential challenges ahead, the company proved it can quickly pivot to meet the needs of restaurants and customers.
"What Tony [Xu] and the team have done over the past several months has been remarkable," Mollins said.
Emma Liem Beckett contributed to this article.