Have Amazon Go and UberEats Become a Threat to Restaurant Operators?

Operators have always had to compete in the market with other concepts, but in today's market, there are a new set of power players ready to steal your customers.

Enter Amazon.

Amazon, like the fast casual segment, is catering to the on-the-go consumer with its cashier-less Amazon Go stores, many of which offer grab-and-go food options. These stores have become the most popular during the workweek, especially at lunchtime.

We recently analyzed the aggressive move Amazon is making in the foodservice industry. Listen to this episode of The Barron Report for more insights on if fast casual restaurants can survive this threat.

But there is one advantage that restaurants, namely fast casual restaurants, have over the Amazon Go stores– many have embraced the plant-based movement. According to Foodable Labs data, today's foodies can't get enough of these plant-based menu items.

Don’t miss our video breaking down this data about the plant-based movement below.

Amazon isn't the only threat operators need to be worried about. There is another shark circling to take a bite out of your business.

Third-party delivery services emerged as a solution that many operators desperately needed.

Since offering delivery has quickly become a guests' expectation, an operator has two options. One is to invest in significant funding to build a delivery program. However, this is easier said than done. It entails creating a system, investing in a platform to process these orders, hiring more staff to handle take-out and delivery orders, and then hiring reliable drivers to deliver these orders.

Or an operator can simply partner with a third-party delivery service, which eliminates most of the headaches. When you consider the operational and logistical challenges of offering delivery, its no wonder that operators across the country have decided to go the route of partnering with a third-party delivery service.

But now this has created a new problem.

One of the most popular delivery services out there is now UberEats. This company has quickly conquered the market. UberEats is currently offering food delivery for 50 percent of the U.S. population and has the lofty goal of serving 70 percent of the U.S. population by the end of this year.

As UberEats becomes more popular, the more the fees increase for the participating restaurants. Could this be correlated to the increase in restaurant closings?

Listen to the podcast above as The Barron Report host Paul Barron explains the data showing that third-party delivery growth may be tied to restaurant failures.

Amazon Go to Threaten 70 Billion Fast Casual Segment

On this episode of The Barron Report, Paul Barron analyzes the aggressive move Amazon in making in the foodservice industry.

Amazon plans to open up to 3,000 of its cashier-less Amazon Go convenience stores by the year 2021, according to a recent report from Bloomberg. The tech giant's brick-and-mortar concept Amazon Go currently has three stores open, two in Seattle and one in Chicago.

Jeff Bezos, Chief Executive Officer of Amazon, views eliminating meal-time rushes in busy cities, like Seattle and Chicago, as the best way for Amazon to reinvent the brick-and-mortar retail experience. The concept of a convenience store that sells fresh grab and go foods and a limited grocery selection like the 7-Eleven franchises, for people in a rush poses a threat to meal-kits and fast casual chains alike.

Listen to this episode of The Barron Report for more insights on how Amazon will be continuing to impact the foodservice industry and if fast casual restaurants can survive this threat.

SHOW NOTES

  • 11:52 - A Look at Amazon Prime Statistics

  • 14:36 - What’s Next? Predictions for Amazon and the Food Service Industry

  • 16:39 - Will Fast Casual Survive?

  • 18:59 - Positioning Your Business to Create a Loyal Guest

  • 01:20 - Amazon’s Disruption in the Retail Industry with Amazon Prime

  • 02:54 - Amazon Go Store Strategy: Are They After Fast Casual?

  • 05:34 - What about Whole Foods?

  • 07:16 - Amazon’s Impact on the Food Ecosystem and Fast Casual

  • 08:44 - Amazon’s Capability to Connect to the Guest


 
 

Also check out the video below to watch a recent episode of The Barron Report to learn more about the Amazon Go stores and how these cashier-less stores are changing these retail space forever.

First Amazon Go Grocery Store Opens to Public in Seattle

First Amazon Go Grocery Store Opens to Public in Seattle

Amazon, Monday, opened their the first brick-and-mortar grocery store where no physical checkouts are required. Amazon Go has been in beta-testing with Amazon employees since 2016 and has just opened to the public. It was expected to open to the public more quickly but there were some teething problems with correctly identifying shoppers of similar body types - and children moving items to the wrong places on shelves, according to an Amazon insider.

Transactions in the store are all done digitally using Amazon’s “Just Walk Out Technology.” It uses hundreds of ceiling-mounted cameras and electronic sensors to identify each customer and track the items they select while walking through the store. Purchases are then billed to customers' credit cards when they leave the store.

Back in 2016, Foodable covered Amazon’s announcement of this concept and our experts chimed in on how these futuristic grocery stores could impact restaurant operators and their businesses.

“First and foremost, what a great wakeup call for our industry. If anyone in our industry is taking anything for granted, what a gift Amazon is providing us...Amazon knows how to deliver experience,” restaurant brand coach Rudy Miick, CMC, MA, said.

“In today’s market, people like convenience. Just like any business that offers a competitive product, there will be some loss of market share to restaurants. However, this is a great opportunity to model the process and fit it to your concept,” Andrew Carlson, consultant and author of Customer Service Is the Bottom Line, said.

The store offers pre-made meals, consumer packaged goods, Amazon Fresh meal kits, alcoholic and non-alcoholic beverages, and a bunch of average grocery items. As of now, Amazon has not said if it will be opening more Go stores, which are separate from the Whole Foods chain that it bought last year for $13.7 billion. Only time will tell what's next.

Read More

Blue Apron Faces Layoffs After Lukewarm IPO

Blue Apron Faces Layoffs After Lukewarm IPO

On Wednesday, Blue Apron announced it will be implementing “a company-wide realignment of personnel to support its strategic priorities.”

Since going public in June of this year, Blue Apron has been hard at work fixing operational issues in order to grow subscriber numbers and also please investors’ expectations.

As Foodable reported in August, the first quarter report for Blue Apron revealed a surprising $238 million in revenue, a disappointing $31.6 million in losses, and a decline in subscribers (from 1 million to 938,000 customers) leading to a drop in shares.

Since then, the company has been forced to shrink its marketing budget, laid off 14 recruiters and launched a podcast in an effort to become more of a lifestyle brand around home cooking.

Now, the meal-kit competitor is faced to lay off approximately 6 percent of its staff across both corporate offices and fulfillment centers—  that figure will “probably amount to more than 250 layoffs” according to “TechCrunch.”

Read More

Amazon Go: How Will This Checkout-Free Grocery Store Change the Restaurant Industry?

In times when speed and efficiency are highly-valued qualities by the everyday consumer, Amazon, the logistics tech giant, has opened the first grocery store of its kind to appease such demands.

Although it is currently in beta-testing and will not be open to the public until early 2017, Amazon Go is the first brick-and-mortar grocery store where no physical checkouts are required. So, how are transactions made? It is all done digitally through Amazon’s “Just Walk Out Technology.” When guests with Amazon Prime memberships enter the store, all the items in their possession are scanned and charges are made on their accounts.

How could this technology be used in the restaurant space to improve guest experience? Is commercializing this seamless technology even a possibility? And with Amazon Go’s quick-and-easy options, including to-go, chef-prepared meals, how will this affect foodservice as a whole, when hungry guests can swing by for a quick bite as opposed to a local fast casual?

Earlier in November, Foodable covered Amazon’s announcement and our experts chimed in on how these futuristic grocery stores could impact restaurant operators and their businesses.

“First and foremost, what a great wakeup call for our industry. If anyone in our industry is taking anything for granted, what a gift Amazon is providing us...Amazon knows how to deliver experience,” restaurant brand coach Rudy Miick, CMC, MA, said.

And Miick is right — this e-commerce giant’s entire brand promise is to commit to brand experience. From transforming the retail market for bookstores in its early days to now bringing cloud services to consumer tablets and Fire TV, it’s no surprise seeing Amazon breach another vertical for growth.

Amazon Go, bringing the e-commerce brand from the digital to the physical, will entice guests with ready-made meals, fresh breakfast, lunch, dinner, baked goods, milk, cheeses, and more from household name brands and artisanal merchants, according to Fortune. Customers will also be able to pick up Amazon Meal Kits, which concept rivals that of home-cooking services like Blue Apron.  

“Amazon is smart to transcend into the arena of physical grocery stores. If Amazon is going to make an impact on the grocery business, it’s going to have to do something aggressive to penetrate the market owned by Walmart,” Burns said. “I don’t think restaurants need to worry as much as Walmart does. Restaurants still have the advantage because a lot of people don’t cook at home.”

However, even if the restaurant industry is not directly affected by Amazon’s grocery stores, its technology has the potential to influence and penetrate into the restaurant and retail space like never before.

“In today’s market, people like convenience. Just like any business that offers a competitive product, there will be some loss of market share to restaurants. However, this is a great opportunity to model the process and fit it to your concept,” Andrew Carlson, consultant and author of  Customer Service Is the Bottom Line, said.

If it is possible to commercialize this subtle technology, it could change the way transactions — especially in foodservice and hospitality — are conducted forever.