Amazon addresses Prime and Fresh overlap

Amazon is merging its Prime and Fresh services.

Expected to wrap up by the end of 2018, the move has already led to several hundred layoffs at the e-commerce giant. It’ a reaction against the increasing overlap between the company’s two delivery businesses. One possibility is that Fresh will become a business delivery service, while Prime Now becomes consumer-oriented. The merger could also streamline the delivery of products from the Whole Foods business. “As part of our annual planning process, we are making headcount adjustments across the company – small reductions in a couple of places and aggressive hiring in many others,” an Amazon representative told Yahoo Finance.

The grocery industry is still trying to define its future in the digital age and it's a lot of trial and error, observes Diego Tartara, CTO Latin America at Globant. The move to consolidate AmazonFresh with PrimeNow is an example of how the e-commerce giant is experimenting within this space to see what works through various product iterations.

“They've discovered that having AmazonFresh as a side service doesn't make sense since it didn't have the expected results,” he comments. “So now the question is, will combining a not-so-successful AmazonFresh with a very successful PrimeNow, save the service? Additionally, will it enhance Amazon's presence in the CPG space, as they compete with services like Instacart and Walmart grocery delivery?”

He adds: “Coming off their announcement that they will be delivering Whole Foods groceries via Prime Now, Amazon is taking more control over the customer journey and further enabling end-to-end experiences. AmazonFresh with Prime Now is furthering this mission. We're excited to see how this consolidation will blend with Prime Now's delivery of Whole Foods groceries, and how they work in Alexa's conversational capabilities to become omnirelevant in an industry that is so deeply rooted in the physical space."