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Failure Case Study: Amazon Restaurants in the UK-Facing the challenges of the competitive online food delivery landscape
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.
- 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.
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Food delivery, online, app, sharing economy, Millennials, local, convenience
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