Failure Case Study: Amazon Restaurants in the UK - Facing the challenges of the competitive online food delivery landscape

Failure Case Study: Amazon Restaurants in the UK - Facing the challenges of the competitive online food delivery landscape

Summary

Amazon Restaurants, offering online food delivery ordering from a range of participating restaurants, launched in London in 2016, opened to Amazon Prime subscribers across the capital. However, in November 2018, Amazon closed the service.

Online/app-based food delivery is a growth market in the face of pressure on traditional quick-service restaurants. This has inspired both new start-ups and bigger brands with logistics and online clout to explore such services, with competition springing up in major cities in markets such as the US, the UK, and Europe.

Scope

- For a value-added service to attract usage, it needs to be offering something one cannot get elsewhere, or offer a comparatively better proposition. Amazon Restaurants simply was not managing that in the London context.
- Its degree of choice was inferior to the competition and it alone was unlikely to be a reason to purchase a Prime subscription.
- The food delivery marketplace in key locations such as London has become highly competitive, with major players making it difficult for new entrants.
- Uber Eats and Deliveroo are more emblematic of the "sharing economy," which is characterized by, and favors new, agile start-ups with creative ideas and brands that reflect the "new-ness" of that shared services concept. Amazon in comparison reflects the previous generation of online services development and association and possibly lacks the popular association with shared innovation.

Reasons to buy

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- Understand the relevant consumer trends and attitudes that drive and support innovation success so you can tap into what is really impacting the industry.
- Access valuable strategic take-outs to help direct future decision-making and inform new product development.