Industry News | September 22, 2017 | By Danny Klein | QSR Exclusive Brief

Amazon Makes a Major Push Into Food Delivery

Olo, which just teamed up with Amazon, is responsible for Shake Shack’s celebrated mobile order and pay app. Shake Shack
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Count delivery as part of Amazon’s plan to infiltrate the foodservice industry. The e-commerce giant announced Friday a partnership with Olo, an online food ordering company armed with a star-studded client list.

Amazon has long tried to dive into delivery with Amazon Restaurants, but hasn’t made any serious ground or threatened the major players. But Friday’s partnership could give the company access to an Olo network that includes 200 restaurant brands and about 40,000 locations.

“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,” says Noah Glass, founder & CEO of Olo, in a statement. “Amazon’s obsession with providing great customer and restaurant experience supports the evolving expectations and behaviors of today’s consumer. We’re excited to connect more of Olo’s restaurant brands with Amazon Restaurants.”

More than 60 million consumers use Olo to order ahead or use its Skip the Line technology, as well as get meals delivered from brands. Clients include: Applebee’s, Chili’s, Chipotle, Denny’s, Five Guys, Jamba Juice, Shake Shack, Noodles & Company, Red Robin, Sweetgreen, and Wing Stop. Only Buca di Beppo, an Italian full-service chain with about 90 locations, has publicly said it plans to use Amazon Restaurants so far. The move is the latest for Amazon, which recently purchased Whole Foods Market for $13.7 billion.

“Our customers love getting ultra-fast delivery of their favorite dishes from Buca Di Beppo through Amazon Restaurants,” says Trish Giordano, executive vice president of sales and marketing at Earl Enterprises, in a statement. “The integration with Olo will allow us to quickly expand our offering with Amazon Restaurants to even more locations enabling more customers to get our delicious, quality dishes delivered right to their doorstep.”

More brands could soon follow, especially since the deal gives Olo’s customers the option to start offering delivery, even if they didn’t before. The news sent GrubHub Inc.’s shares tumbling more than 7 percent on the stock market—the biggest intraday drop in more than seven months—before it rallied. It was down about 2 percent to $52.48 heading into the lunch hour on the East Coast.

Olo, which counts Shake Shack founder Danny Meyer as an investor, can publish menus and take orders. The delivery would then be arranged by Amazon.

“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,” says Gus Lopez, general manager of Amazon Restaurants, in a statement, “This integration will enable Amazon Restaurants to onboard new restaurants with ease, as well as quickly add more new choices and delivery options for customers.”

Amazon Restaurants has integrated with Rails, Olo’s application programming interface that makes it easy for operators to list their menus on third-party marketplaces and drive incremental sales without having to install tablets and manage orders in multiple places. This means customer orders from Amazon Restaurants are integrated seamlessly into existing point-of-sale systems.

Olo also offers counter and curbside pickup for orders placed by phone, web, mobile, app, and Amazon Alexa, as well as through Olo Dispatch and Olo Rails. The company integrates into 25 leading POS systems.

Research from Cowen & Co McDonald’s Corp., according to Bloomberg, shows that fast-food delivery orders placed through mobile apps is expected to surpass $35 billion by 2020. McDonald’s delivery push via UberEATS is available at more than 3,500 U.S. locations already.

The move will crowd a growing market. Yelp announced in August that it was selling Eat24 to GrubHub, a company that also owns Seamless and MenuPages.

Olo is responsible for Shake Shack’s celebrated mobile order and pay app, and also built the technology behind Chipotle’s catering service.

Tender Greens, a fast casual also with Meyer backing, also used Olo to revamp its online ordering. Garbanzo Mediterranean Fresh, Papa Murphy’s, Velvet Taco, and El Pollo Loco are some other brands deploying its capabilities.