Amazon is in the process of merging its Prime Now and AmazonFresh retail businesses, according to a recent report out of Yahoo Finance. The specific reasoning behind the merge has not been provided although the suggestion being made is Amazon’s acquisition of Whole Foods is likely to be playing a role in the decision.
Likewise, the continuing overlapping of the two businesses is also thought to have proven problematic for the company as in addition to offering significantly faster fulfillment and delivery times compared to AmazonFresh, Prime Now also offers groceries, albeit not quite to the same degree. Which is where the merger is likely to prove beneficial to Amazon in general. Combining the two will simplify access to the likes of Whole Foods while also affording the company the option to reduce costs (at least at an operational level). A point that is made in this latest report which draws on management-level positions as already having been cut as part of the early preparations for the merging. While such job losses would normally point towards trouble for a company, Amazon is the exception to the rule as it is currently expanding massively and in multiple directions. Therefore, it would seem more likely this is about being 'good for business' rather than a straightforward cost-cutting exercise.
Another example of how the merger could prove popular is in the monetizing methods employed by both. As not only does Prime Now offer faster deliver (typically within two hours), but it utilizes a per-basis cost where users only pay each time they use the service. In contrast, AmazonFresh adopts a subscription model where members are required to shell out $14.99 per month - in addition to the cost of a standard Prime membership. Adding to this, Prime Now is also available in much greater number of areas in the US. So while it is unclear whether Prime Now is going to wholly absorb the AmazonFresh brand, it could be the case that if the merger goes ahead as reported it will see AmazonFresh embracing most, if not all, of the Prime Now traits. Which means the merger could potentially result in a service that offers greater access to groceries, delivered in a faster time (although maybe not quite as fast as standard Prime Now orders due to the picking process involved with larger grocery orders), and at a single delivery cost per order.