DoorDash launches DashPass for students

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Diving brief:

  • DoorDash launched DashPass for Students, a student membership plan for $4.99 per month, half the cost of a standard DashPass subscription, the company announced on Monday. Annual subscriptions are also available for $48.
  • DashPass for Students is available to all undergraduate and graduate students at accredited colleges and universities across the country.
  • The subscription program already has more than 10 million members worldwide and has played a key role in building customer loyalty on the delivery platform. The program offers $0 delivery charges to restaurants, convenience stores, and grocery stores after meeting minimum order requirements, a 5% credit on pickup orders, and member-only promotions, among other perks.

Overview of the dive:

DashPass’ continued expansion shows significant growth potential and could help DoorDash achieve profitability. The program has been around for 2018and DoorDash used its marketing on its own channels, as well as partnerships with credit cards to increase membership, executives said during the call for the company’s 2021 year-end results.

“DashPass is emblematic of our broader strategy to maximize the generation of long-term profit dollars,” the company said in its statement. Letter to shareholders Q4 2021. “While DashPass orders generate lower contribution margins on average than non-DashPass orders, DashPass members have higher order retention and frequency than non-members. production of profit dollars.”

This new offering has a lot of potential for DoorDash, especially since it has significant brand recognition among Gen Z. A 2020 Thrive Analytics study revealed that more than half of Gen Z consumers surveyed prefer DoorDash, compared to 16% who prefer using Grubhub. From fall 2020there were 19.7 million students in the United States

This focus on students will also pit DoorDash against Grubhub, which has a significant presence on college campuses. Grubhub has targeted students for several years. Campuses became a key focus after Grubhub acquired Tapingo, a food delivery provider for college campuses, in 2018. When it launched its Grubhub+ membership in 2020, it offered free access to students enrolled at any of the more than 150 campuses that work with the company. . It has also expanded robotic delivery to colleges through a partnership with Yandex.

Grubhub also allows students to pay for orders using credit cards or their campus card, allowing students to order from on-campus dining options. However, Grubhub only works with a certain number of college campuses, which could put it at a disadvantage compared to DoorDash offering access to all students.

DoorDash also launched a cross-platform “So Worth It” campaign, to highlight the new offer. The marketing will cover digital, social and on-campus activations, according to the press release.

“With the launch of DashPass for students, we’re excited to be a game-changer for college students with a plan designed just for them, giving them access to everything from late-night study snacks and groceries to school supplies and dorm essentials,” Kofi Amoo-Gottfried, CMO at DoorDash, said in the press release.

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