Amazon starts testing restaurant delivery
Continuing on its quest to dominate nearly every aspect of American consumers' lives, Amazon has turned itself into a food-delivery service, starting in Seattle this week.
Amazon is testing restaurant delivery in select areas of its hometown for members of its Prime Now service, the company said Tuesday. Prime Now is an additional benefit of Amazon Prime available in only 10 U.S. cities, including Portland, Ore., and Seattle, offering one-hour delivery on orders for $7.99 or two-hour delivery for free. Amazon Prime is a $99-a-year program that gets you free two-day shipping and access to video and music streaming.
The restaurant-delivery service, primarily available in downtown Seattle for now, leverages Prime Now's existing delivery infrastructure to bring food orders from restaurants to customers. Customers will be able to browse menus and place orders with "dozens" of participating local restaurants via the Prime Now app and get their food within an hour or less.
Delivery is also free for a limited time; Amazon has not said what it could eventually cost. And while the company hinted at expanding into other markets, nothing is official yet.
"We have our sights set big, but for now we're focused on Seattle," says Gus Lopez, general manager of Amazon Restaurants. Amazon initially dabbled in restaurant partnerships late last year when it tested a takeout ordering service in Seattle that was linked to Amazon Local, the company's daily deals offshoot.
With Prime and services like AmazonFresh, Amazon has made itself a brand that permeates the way we get our groceries, order household products, listen to music and watch movies and TV shows, in addition to being a destination for buying just about anything else. Now restaurant delivery puts Amazon on track to compete with companies including GrubHub, Seamless and a growing number of start-ups that provide restaurant delivery through apps.
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Compared with other services, though, Amazon has the advantage of extensive tech expertise and access to capital, says Michael Halen, an analyst with Bloomberg Intelligence. "They should be able to do this better, and they should be able to roll it out to more cities more quickly," he says.
Food delivery has become the latest battleground for customers as chains compete for marketshare, with everyone from McDonald's to Chipotle starting to partner with delivery apps like Postmates in select markets. Amazon's entrance into the delivery space could help smaller local restaurants better compete with more established national brands, Halen says.
Amazon has been making a major push toward specialty services that leverage its ability to deliver goods quickly — thanks to a growing network of fulfillment centers — as it tries to woo more customers to its Prime program. It has been expanding the number of locations that have Prime Now since first launching in Manhattan in December, guaranteeing fast access to everything from groceries to paper towels.
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In March, Amazon launched another program just for Prime members called the Dash button, a small electronic device that instantly places orders for specific products through users' Prime accounts when the button is pressed. The devices can be mounted throughout your home or office — such as in the laundry room for easy access when you need to order more detergent — using adhesive strips or clips. So far Amazon has partnered with 29 brands on product-specific buttons.
And in July, Amazon put on what was billed to be a massive sale bigger than Black Friday, exclusively for Prime members. Amazon said it acquired hundreds of thousands of new members due to the sale, which prompted major retailers such as Walmart and Best Buy to compete with sales of their own.
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Contributing: Elizabeth Weise