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Amazon is hungry: food delivery to your door

Amazon Quickly eating the retail sales CNBC - Retail in Asia

Online giant Amazon announced it is partnering with Olo, an online restaurant platform. Amazon is full-steam ahead in entering the food-delivery wars.

The goal is to integrate Olo’s customers—which include favorite food chains like Shake Shack, Chipotle, Five Guys, Cold Stone Creamery, and Jamba Juice, just to name a few—with Amazon Restaurants.

That could translate to some of your favorite meals being delivered to your door through the service in under an hour.

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Amazon’s move should come as no real surprise, given its recent aggressive ventures into food and grocery.

The company recently opened its first grocery pickup locations with AmazonFresh and made headlines earlier this summer when they acquired Whole Foods .

The investments, coupled with money thrown into other areas like cloud, resulted in a 77% drop in quarterly income in July 2017 despite revenue standing at $38 billion (up 25% from a year earlier).

The company is confident, however, that the investments will be a smart long-term strategy.

Amazon reportedly will get a 30% commission on orders placed through the agreement, which you would think might make Olo’s customers think twice about signing, right?

Amazon clearly has a plan here and could be a godsend for their early adopters.

The deal leaves Amazon responsible for delivery, meaning that, even though the chains of course still can invest in options like drones, fleets, or robots of their own, the restaurants immediately can lean on Amazon’s existing infrastructure and technology to reach customers.

Realistically, that technological foundation will justify the premium, especially with the increasing consumer demand for convenience. Now, despite innovative capabilities of other food-delivery providers, Amazon is hands-down, the best strategic partner for chains looking for a long-term play.

earlier in 2017, Amazon had its first public Prime Air drone delivery. Given, the commercialized timing is up in the air (pun unintended) and Amazon will be at the mercy of the Federal Aviation Administration, but from a forward-looking standpoint, the e-commerce giant clearly knows what’s on the horizon.

Amazon continues to chart-top in terms of brand popularity and sales. Data from Statista shows that:

  • Amazon enjoyed net sales of $136 billion in 2016.
  • Amazon is the most popular online store in the United States.
  • Amazon’s brand value was estimated at $139.29 billion in 2016.
  • Just in December of 2016, Amazon saw a whopping 189 million site visitors.

SEE ALSO : Food delivery and out-of-home dining are thriving in China

63% of Amazon customers in the US are Prime members (June 2017).They pay for their membership, but exhibit high loyalty and higher purchase rates.

Product selection was also cited as the most popular reason to use Amazon as of November 2016—Olo has approximately 200 customers that could come on board, so the agreement could meet the existing expectation of choice. 

(Source: Forbes)

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