It's just over 3 years since sweetgreen, the DC originated darling of health-conscious lunch-goers, made the bold decision to go cashless in favor of credit, debit, and digital transaction. Although the company later reneged on that decision in the face of criticism that the policy was exclusionary, the promotion of app-based digital payments over more traditional payment methods had already made significant inroads.
Only 10 weeks after the sweetgreen app launched in mid-2016 in partnership with payment processor, LevelUp, 18% of orders were paid for digitally using a QR code on a smartphone. While the app is designed and branded by sweetgreen, the payments and promotions are handled on the back end by LevelUp, which was acquired by Grubhub in 2018.
Today, M Science's data indicates that the share of transactions processed by LevelUp for sweetgreen could be as high as 50%.
The benefits of app-based ordering for sweetgreen are clear with expedited transaction times and a successful loyalty program, and their relationship with LevelUp is symbiotic in nature: LevelUp's return on the investment of free card processing fees is predicated on successful promotions.
In order to offset the expense of processing payments for free, a percentage of sales normally passed on to the vendor, LevelUp takes a cut of first-time sales and charges a fee when promotions are redeemed.
With an estimated half of transactions being processed through LevelUp, have the loyalty promotions been successful? M Science estimates that users of the digital payments patronize sweetgreen upwards of 1.5 times as often as those who pay by card. In sweetgreen's parlance, that's a win-win-win.
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