People can order nearly anything from Amazon.com, the online retailing giant that delivers everything from paper towels to designer shoes. Amazon expanded its offerings even more two years ago, when they added restaurant food delivery to their list of services.
Amazon Prime members in participating cities can visit the Prime Now website or use the mobile app to browse menus, place an order, and track it in real time. Delivery is guaranteed in an hour or less, and there are no menu markups.
As a restaurant owner deciding whether to partner with Amazon, it’s a good idea to consider both the pros and cons.
The Upside of Prime Now
Increase in Business
Participating in Prime Now gives restaurants added exposure through the Amazon app. Mobile ordering is extremely popular, especially among younger generations. According to a survey by the National Restaurant Association, 61% of people said they consider delivery and takeout options important for table service restaurants.
Amazon is Well-Known
Amazon is hugely successful, raking in billions of dollars annually. Prime Now gives restaurant owners the opportunity to associate their business with the Amazon brand, which embodies quality, convenience and fast delivery.
Prime Now is an easy way for restaurants to offer restaurant food delivery service without the overhead. If your restaurant doesn’t offer delivery, Prime Now is a good way to test market demand.
A Look at the Downside
Loss of Control
Once the order leaves your restaurant, it’s in the hands of an Amazon driver. There’s no guarantee the customer will receive an order that’s been kept warm or that will still look appetizing when it arrives. Restaurants may gain new business, but could also lose customers if orders are spilled, crushed or cold when they arrive. You will also have to find a foolproof way to keep track of orders that come in from different sources. Amazon orders are sent to a Kindle, so you will need to find a way to communicate them quickly and accurately to your kitchen.
When you run your own delivery service, you can create customer profiles in a CRM that stores information. Their name, email, order history, and more will be available right at your fingertips. When the orders go through Amazon’s service, however, you can’t collect information to evaluate customer satisfaction or for future marketing.
Restaurants have very slim profit margins to begin with, so third party delivery services like Prime Now are an expensive gamble. Amazon takes a 27.5% charge for the delivery, so make sure you can afford to partner with them for the service.
Customers Turn to Amazon Instead of You
Your existing customers may find it more convenient to start ordering through Amazon, a problem you won’t face if your business has its own online and mobile ordering app.
The Big Picture
Amazon’s Prime Now app is a good option for restaurant owners who want to test the waters for delivery. However, before signing on the dotted line, evaluate whether you can afford the fees and if it’s worth the risk of putting service into someone else’s hands. Restaurants that do opt to partner with Prime Now can gain new business, especially if they don’t currently offer delivery by highlighting their menus and enticing new customers with discounts and special offers on direct orders to capture Amazon customers for the long term. Approach this opportunity strategically as a way to grow your business.