Amazon Rebooting Grocery Strategy With Positive Steps

Once bitten, twice shy is how I would call it.

Today, Bloomberg reported that Tony Hoggett, SVP for Amazon Worldwide Grocery Stores, revealed a few major upcoming changes for Amazon's grocery strategy. Here are a few of the items mentioned:

1 - Unified online cart for Amazon, Amazon Fresh, and Whole Foods.

2 - Starting today, Amazon Fresh will begin inviting people to order from it even if you are not a Prime Member (although I'm sure it may not be the same discounts/benefits, etc -- TBD)

3 - Revamping stores putting doughnuts (!) in the front, adding 1,500 items, and updating the stores to be more bright/fresh.

This marks the first public notice of a "step forward" in Amazon's plans, following consistent retrenchment/closings in the past year.

A few comments on the approach:

* You can almost write this Amazon 6-pager yourself. "Our stores are too exclusive, confusing, tired. Our digital experience is not open enough, our assortment is disjointed and poor, and we make customers jump through too many hoops. This needs to change."

* The company seems determined to fix its online grocery business first, while still more slowly investing into physical retail. This makes sense given Amazon's strengths. Amazon seems to be investing in specific markets to test its approach: Illinois, Southern California, Northern Virginia and Washington state.

* Hallelujah on the unified carts for grocery! Talk about an annoyance from presumably a high-tech company. What was the point of 3 carts to begin with?

Conway's Law is the answer. These changes recognize that Amazon's internal organization structure did not match their desired customer experience. Kudos to Amazon for recognizing that, most organizations are blind to it.

* Left unsaid are the packaging and delivery improvements still needed for online grocery. As someone who has tried Amazon Fresh/Whole Foods delivery in NYC for years, Amazon is still far behind Fresh Direct in how it cares for and packages its online grocery orders. They did mention they are adding refrigerated sections to their urban warehouses - another step forward.

* Amazon is somewhat throwing their "Just Walk Out" technology under the bus a bit. Self-checkout lines are being added. Leaving "Just Walk Out" it in stores, but admitting it is "very new" and may not be for everyone. To me, this is just the first in a long line of admissions on this technology that it's not ready for wide adoption by the public.

In summary, Amazon Fresh stores will look like .... somewhat regular grocery stores, backed by the power of Amazon online distribution. At least it's a step in the right direction.