Restaurant and retail lines continue to blur, driven by consumer demand

by Kim Souza ([email protected]) 663 views 

Grocery retailers are merging into the meal business because of consumers’ desire for convenience. While more ready-to-eat foods are now offered at most U.S. grocery chains, Amazon and Albertsons have upped their games in the restaurant arena.

Amazon is teaming up with online food ordering system Olo to expand its presence in the restaurant industry. Amazon Restaurants are not new, but there have been limited eateries taking part in that service. Amazon execs said partnering with Olo will enable Amazon Restaurants to add new eateries and provide more choices and delivery options for its Prime member base.

“We are excited to leverage Olo’s digital ordering technology and continue rapidly growing our network of restaurants to give Amazon Prime members more options for fast delivery from their favorite brands,” said Gus Lopez, general manager of Amazon Restaurants.

Olo enables restaurants to offer consumers counter and curbside pickup for orders placed by phone, web, mobile web, app, Amazon’s Alexa-enabled devices and more, as well as delivery through Olo Dispatch and Olo Rails in certain markets. The delivery services do not appear to be available in Arkansas.

Olo said it provides on-demand interface for digital ordering and delivery to a network of more than 200 restaurants at 40,000 locations. The company said 60 million consumers use Olo to order from eateries such as Chipotle, Five Guys Burgers & Fries, Red Robin, Wingstop, Applebee’s, Chili’s and Denny’s.

“We’re thrilled to work with Amazon to provide Olo’s base of restaurant customers with a new delivery sales channel that drives increased visibility,” said Noah Glass, founder and CEO of Olo.

Lopez said Amazon Restaurants integrated into Olo’s application programming interface, which allows restaurants to list their menus on third-party marketplaces and drive incremental sales without having to install tablets and manage orders in multiple places.

“Customer orders from Amazon Restaurants are integrated into existing point-of-sale (POS) systems, reducing confirmation and response times and reducing the likelihood of manual errors,” Lopez said.

The move by Amazon is primarily about expanding its Prime ecosystem to include restaurant ordering. Amazon doesn’t have to own the restaurant to benefit because Prime members are allowed to use Olo, and that gives the retailer data on the orders. Knowing the food preference is one way Amazon can market its own food offerings with Whole Foods and AmazonFresh to its Prime membership base in the future. Amazon’s Alexa-enabled devices will be able to order for consumers. The user simply tells Alexa to order “a hamburger and fries from Five Guys” and the order is placed with the restaurant.

Annibal Sodero, assistant professor of supply chain at the University of Arkansas, said Amazon wants to dominate retail and this is just another chapter of that playbook. From movies to books, groceries, music, general merchandise and now restaurant ordering, Sodero said it’s clear Amazon is trying to keep its Prime membership from having to never go outside its ecosystem.

Amazon was not the only retailer to invest in food convenience last week. Grocery chain Albertsons acquired the online meal company Plated for an undisclosed amount. The deal is expected to close by the end of the month. Plated, was founded in 2012 and competes with Blue Apron and other online meal subscriptions. Plated will operate as a subsidiary of Albertsons and be led by co-founder Josh Hix while keeping its base in New York City. Albertsons said Plated will have fulfillment centers around the U.S.

Albertsons will offer Plated meal kits in many of its store locations, across digital channels and through a variety of distribution options. Albertsons has more than 2,300 stores nationwide under the Safeway, Jewel-Osco, Shaw’s, Tom Thumb, Pavilions and Star Market banners.

“With Plated, we’ve found a partner who shares our commitment to delicious, affordable food; superior technology and innovation; and world class customer service,” said Bob Miller, chairman and CEO of Albertsons Companies. “Plated knows its customers better than anyone, and together we will accelerate our ability to serve them.”

In addition to benefitting from Albertsons’ resources and national reach, Plated will also gain exposure to the estimated 35 million customers per week who do business with the grocery chain. Analysts say Albertsons is trying to tap into the on-demand culture which is slowly taking over the grocery channel. Deloitte estimates 41% of millennials have purchased groceries online.

Grocery competitors like Kroger, H-E-B and Whole Foods Market are also beginning to offer meal kits in their physical stores. Tyson Foods is also testing meal kits for sale online and in select brick-and-mortar retailers. Amazon has also introduced meal kits, which are being tested in select markets and not sold under the subscription model.