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Amazon Cuts Its Amazon Restaurant Service In The US This Month, GeekWire reports. This follows Amazon switch off Amazon Restaurants in London last November. The service was originally founded in 2015 to provide consumers with delivery to nearby restaurants and has become available in more than 20 markets before his next disappearance.
Amazon Restaurants has failed to become a major player in the food delivery industry in the United States. In April 2019, four companies held 93% of market sales, according to Second measure. Grubhub leads the way with a 32% share, followed by DoorDash at 29%,
with 22%, and
‘ ten%. Amazon Restaurants was one of the companies listed under âOther,â which only had a 7% stake.
The service may have struggled due to market competitiveness, exclusivity, and tough industry delivery requirements.
- The food delivery market is competitive, making it difficult for Amazon to break through. Grubhub has been around since 2004 and even newcomers DoorDash and Uber Eats have beaten Amazon restaurants in the market, launching into 2013and 2014, respectively. So while Amazon has immense resources, it appears to have failed to steal customers from existing players to strengthen its market share.
- Amazon Restaurants was only available to Prime members, capping its potential audience. While there is numerous Core members, by removing non-members, likely made it more difficult for the service to create a share large enough to compete with Grubhub and DoorDash.
- Local on-demand delivery is expensive, difficult to implement, and different from Amazon’s established logistics expertise. To manage restaurant deliveries, businesses need to deploy workers to efficiently pick up restaurant orders and bring them to specific customers’ homes, making exact routes and processes inconsistent and emphasizing last mile delivery. This can prove to be costly, and while Amazon’s online delivery capabilities are strong, they largely focus on deliveries from fulfillment centers, so the expertise may not have given it. a useful advantage in the delivery of food.
Amazon’s recent investment in Deliveroo suggests that Amazon may be interested in returning to the market with a new offering. LED a $ 575 million Series G funding round in the London-based food delivery service, which operates in 14 markets, but not currently in the United States.
Amazon could continue to invest and partner with Deliveroo and bring it to the United States in the hope of achieving greater success in the food delivery market by leveraging the service’s experience in food delivery. food delivery. Amazon could also find other ways to improve the service, such as making it available to all consumers and offering discounts to Prime subscribers, for example.
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