Most restaurants know DoorDash as a delivery service—a way for them to get their food to customers who are elsewhere.
But DoorDash wants to do a lot more than that. It wants to work inside restaurants too.
That’s one of the big reasons the company is acquiring SevenRooms, a reservations and marketing provider that is primarily focused on helping restaurants grow their in-store business.
Once the $1.2 billion deal is official, SevenRoom’s technology will become part of DoorDash’s Commerce Platform, which offers things like websites and online ordering that are aimed at boosting restaurants’ first-party digital sales—another new-ish area of development for DoorDash.
“We’ve heard time and time again from merchants that they want to grow their first-party presence and business … but we also heard a solid stream of feedback that they wanted to grow their in-store business, particularly coming out of the pandemic,” said Parisa Sadrzadeh, DoorDash’s VP of strategy and operations, in an interview.
“What was really compelling about what SevenRooms has put together is really great tools to help drive that in-store business and help merchants build deeper relationships with their customers.”
On an earnings call Tuesday, DoorDash co-founder and CEO Tony Xu framed the deal this way: DoorDash offers logistics-as-a-service through its app and driver network; software-as-a-service with the Commerce Platform; and now marketing as a service with SevenRooms.
“What we hear all the time from merchants is this desire to understand everything that's actually happening about their guests inside their dining rooms, as well as their other channels,” Xu said.
DoorDash has not disclosed the size of its Commerce Platform business, but Xu said it is "earlier in that journey" than the delivery side.
Besides adding new capabilities, SevenRooms will also help DoorDash expand its global reach. It works with more than 13,000 restaurants, hotels and other venues around the world, from massive companies like Marriott International to single-unit cafes.
Founded in 2011, the company’s software allows restaurants to collect all sorts of information about their customers: their contact information, their reason for visiting, what they ordered, and what they thought about the experience.
SevenRooms then compiles all of that data into a customer profile. If the customer opts in, the restaurant can send them marketing messages later on that are tailored to their profile. Most of that marketing is automated, so restaurants don’t even have to think about it.
It’s a simple premise—appeal to customers with things you already know they like—but it’s still a relatively new idea for restaurants, which have long relied on the basics of good food and service to keep customers coming back.
“We find that most restaurants are not doing marketing the way they should,” said SevenRooms co-founder and CEO Joel Montaniel. Being bought by DoorDash will allow SevenRooms to accelerate that work, he said.
“DoorDash has scale. They have a track record. They know how to operate,” he said. “And everyone wants to do what’s in the interest of the operator. And so we’re really excited to go faster.”
That said, the combination has made some in the industry uneasy. They see some risk in a giant third-party delivery company gaining access to restaurants’ first-party, on-premise business.
But Montaniel said the response from existing customers has been overwhelmingly positive. He’s been flooded with calls and text messages about how SevenRooms will benefit from joining DoorDash.
“There have been a handful of restaurants, as always, that question what this will mean and can’t really make 2 cents out of it yet,” he said. “Our job is to make sure we continue to deliver value for them and continue to help them grow their business.”
So with DoorDash casting a net over both the on- and off-premise sides of the business, how might those two sides interact in the future? For instance, will restaurants be able to merge their delivery and in-store data to get an even clearer view of their customers? Sadrzadeh said that’s still to be determined.
“There’s a lot of details of what the integration will look like that we don’t know yet,” she said. “But I think plugging it into the broader DoorDash ecosystem will help merchants get access to our consumer base in a deeper way than they could before.”