Amazon is consolidating its Fresh and Prime Now services

Amazon is working on consolidating its two grocery delivery services, Amazon Fresh and Prime Now, according to Yahoo Finance, citing an unnamed source. The move seeks to streamline the company’s delivery push from Whole Foods stores, and was behind the hundreds of layoffs the e-tailer announced last week.

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AmazonFresh, which offers groceries and perishable items to Prime members for an additional $15 per month for Prime members, launched in 2007, while Prime Now launched in 2014. In recent years, the overlap between the two services has increased. According to a survey by Morgan Stanley, 48% of Prime Now users order groceries through the service.

There have been signs over the past few months that a consolidation of the two services was forthcoming. Last fall, Amazon scaled back AmazonFresh service in 10 states. Then in December, Stephenie Landry, who headed up Prime Now, was named head of AmazonFresh.

Dive Insight:

Amazon has not confirmed this news, and a representative did not respond immediately to Food Dive’s request for comment, but officials in the past have discouraged the idea that it might merge its two grocery delivery services into one entity. Speculation ramped up last fall that Fresh and Prime Now could be consolidating after the e-tailer scaled back Fresh in several states.

In an interview with Recode, Prime Now head Stephenie Landry supported having multiple grocery delivery services under the company.

It does makes sense to keep Fresh and Prime Now, primarily because of the different ways each offers delivery. Both services offer shelf-stable as well as perishable groceries — Fresh offers more of the latter — but whereas Prime Now delivers on-demand from couriers, Fresh is more akin to Peapod and FreshDirect, utilizing refrigerated trucks and requiring customers to set delivery times. Each service appeals to different consumer needs and shopping styles.

Rather than doing away with one of the brands, it could be that Amazon is combining the teams to increase efficiency, and to make sure they work better together.

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