Amazon's never-ending reach continues to expand in the restaurant industry.
Amazon announced last week that they're expanding their restaurant food delivery service known as Prime Now Restaurant Delivery to San Francisco. San Fran becomes the eight city to get Amazon's delivery service, along with San Diego, Chicago, Seattle, Los Angeles, Baltimore, Austin and Portland.
Amazon promises to get food to diners within an hour (they claim they're at 40 minutes, on average, at the moment). And the delivery is free for diners as long as they have an Amazon Prime membership.
The delivery is not so free for partnering restaurants.
The online megastore is looking to take a whopping 27.5% of each bill.
That's right, Amazon wants more than a quarter of each online order to go into their own pockets. It's a staggering percentage that may prove too rich for a lot of restaurant's metaphorical blood.
Still, takeout delivery is a major part of the restaurant industry. Takeout makes up 18% of the industry's total income in 2013, according to Statisa. And 60% of Americans have admitted to ordering takeout at least once per week. So there's definitely a high demand.
Do I even need to offer takeout?
The obvious answer is no. You can just be a good ol' fashion sit down restaurant and let diners be salty about it on their own time if they really want food delivered to them. But the reasons for not offering takeout delivery varies.
Some restaurants don't offer the service because they don't have the financial resources to hire and start the program. Other operators don't have the mental bandwidth left to deal with managing yet another aspect of the business and rather concentrate on their in-house guests. Thirdly, some restaurants aren't doing it for the sake of their own brand.
“A number of restaurant companies are deliberately skipping out on that trend — or are at least holding out — worried largely about the potential impact of the services on their brands’ reputations,” Jonathan Maze wrote for NRN. “Indeed, restaurants that employ delivery services run a risk of hurting their brand reputation if they don’t do it correctly, or if the service hurts their food quality.”
If you have your own in-house delivery service, you definitely have more control over how hot (or not) food is when it's delivered to diners. But for those who don't have their own deliverers but would like to expand into that realm, services like Prime Now and UberEats are viable options -- if you're willing to cough up more of your profits. There are also startup delivery companies like Homer Logistics which offer more restaurant-friendly pricing.
There's no one size fits all for restaurants. It comes down to what you want to offer, what you can afford to offer and what type of restaurant experience you want your customers to have. Those three things will help dictate whether delivery is the way to go or not. Everything else after that is logistics.
What do you think about Amazon Prime Now Restaurant Delivery? Have you used it? Let us know in the comments below or email us.