Recently, Amazon said it would lay off over 18,000 people. However, the company is looking to expand, which could lead to more physical stores as the CEO Andy Jassy said that they have plans to go big on their brick-and-mortar grocery store business, according to Engadget.
Experimentation and Doing Things Quickly
Amazon has a history of experimenting and getting things done quickly until they find something they like. When they do, they double down on it, and that's what they plan to do now.
It can be recalled that the eCommerce giant purchased Whole Foods in 2017, but still, they are still far from taking over the grocery market. Currently, their physical store division accounts for 3.4 percent of the overall business and has only grown approximately 10 percent since they acquired Whole Foods.
Still, the company is hopeful that this year, they will have a format to go big on.
The Layoffs
The recently announced layoffs were mostly in their grocery division, as they have closed many of their Fresh supermarkets. They also plan to put the new ones on hold until they find the right format and formula that would work for them.
Also read: Amazon to Close 68 of its Physical Stores as it Focuses on is Grocery and Fashion Items
What's Driving This?
Despite the challenges the eCommerce giant has faced, especially during the global pandemic, they still think that grocery is a strategic area for them as it's a huge market segment. Moreover, they also consider the influx of consumers that shop for groceries.
Amazon also believes that over time, grocery will be an omnichannel. They are also adjusting the Amazon Fresh digital business with a new pricing structure for grocery delivery that will increase the threshold for free delivery.
Despite this, Whole Foods Market continues to open new locations. New Whole Foods stores opened in NYC and Bozeman, Mont this year alone.
Amazon is investing in the grocery market to capitalize on the growing demand for grocery delivery and to meet the needs of customers who want to purchase their groceries online. They are also leveraging their existing infrastructure, technology, and delivery capabilities to offer customers a more convenient and cost-effective solution. Additionally, Amazon continually innovates and expands their grocery offerings to meet customer needs.
Amazon is also focusing on expanding its range of grocery products to include more organic and sustainable options. This includes a wide variety of fresh produce, dairy, meat and seafood items as well as pantry staples like grains, snacks and condiments. In addition to expanding their grocery offerings, Amazon is also investing in new technologies that will make it easier for customers to shop and purchase groceries. This includes the launch of Amazon Dash buttons which allow users to order items with a single press of a button, as well as voice ordering through Alexa-enabled devices such as Echo.
Related article: Amazon Pauses Expansion of Fresh Grocery Stores for Evaluation
