Amazon Eases Its Way Into Restaurants With Online Ordering Partnerships

After Amazon’s ill-fated early forays into the restaurant industry, the company is reapproaching the space.

On Wednesday (March 29), fast-casual giant Panera Bread announced that it is letting its loyalty members order by voice or touch via Amazon’s Alexa.

The news comes just one week after the bakery-café chain announced the rollout of Amazon One pay-by-palm capabilities for members, making the brand the first national restaurant to leverage the technology. In fact, as George Hanson, the restaurant’s senior vice president and chief digital officer, shared in an interview with PYMNTS on Monday, the eCommerce giant approached Panera with the technology.

Amazon is also finding other ways to get its foot in the restaurant industry’s door. Last summer, for instance, the company announced a commercial agreement with Grubhub that could offer it a 2% stake in the aggregator, which could grow to 15% if the partnership performs well for Grubhub. Per the deal, the eCommerce giant offered free one-year Grubhub+ subscriptions to Prime members, a partnership similar to the one that Amazon made with the United Kingdom’s Deliveroo in 2021.

These forays into restaurant ordering, payments and delivery follow on the heels of the demise of Amazon’s initial efforts in the restaurant space back in the 2010s. Back in 2015, the eCommerce giant launched Amazon Restaurants, offering Prime members the opportunity to order one-hour delivery from restaurant partners without the fees typically associated with the channel.

The service shut down in 2019, with many attributing the program’s failure to the economic challenges of the on-demand delivery model and stiff competition from leading restaurant aggregators.

“It was a friction-filled experience for a platform that had built its reputation on choice, eliminating friction when ordering online and fast and reliable delivery,” PYMNTS’ Karen Webster noted last year.

However, in the year following the program’s shutdown, the digital restaurant space exploded, with consumers flocking to aggregators as the COVID-19 pandemic kept them in their homes. Even once returning to life away from home became relatively safe, those digital ordering habits remained sticky.

In fact, most consumers now order from restaurants online each month. Research from PYMNTS’ recent study “12 Months Of The ConnectedEconomy: 33,000 Consumers On Digital’s Role In Their Everyday Lives,” which draws from responses from tens of thousands of U.S. consumers, notes that the share of consumers ordering via restaurants’ direct digital channels — their apps and websites — remained above 50% throughout 2022, closing out the year at 57%.

As such, it seems Amazon has its eye on the industry once again, seeking ways to insert its technology into the food purchasing experience without sinking the investment it did back then into building a delivery network.

Of course, restaurants are not the only way consumers get their daily food needs met. Amazon has also been stepping up its grocery offerings, growing its share of center-aisle categories with programs such as Subscribe & Save and looking into ways to capture more sales of perishables.

“We’ve decided over the last year or so that we’re not going to expand the physical Fresh stores until we have that equation with differentiation and economic value that we like, but we’re optimistic that we’re going to find that in 2023,” CEO Andy Jassy told analysts last month. “When we do find that equation, we will expand it more expansively. But I think that we have a very significant opportunity in the grocery segment.”