Struggling Amazon Fresh taking new direction (slideshow)

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After Amazon paused expansion of its supermarket banner earlier this year to reevaluate strategy, the company unveiled how it plans to launch the struggling business in a new direction.

In an Aug. 2 update, the e-commerce giant announced several changes to Amazon Fresh, including a revamped store format and expanded online access, that are meant to make the brand more appealing to shoppers.

As part of the makeover, Amazon has begun updating some of its locations to reduce the focus on the technology the stores opened with. So far, two stores in the Chicago area have been reworked and changes will be coming soon to three Amazon Fresh sites in Southern California.

While shoppers will still be able to use Amazon’s product-detecting Dash Carts and the cashier-less Just Walk Out technology, Amazon installed self-checkout stations as a way to provide “customers even more ways to save time on their grocery trips and pick what works best for them.”

The remodeled stores will also contain 1,500 additional national and private label products, with the majority being items in the dairy, snacks, health, home care and baking categories, as well as a built-in Krispy Kreme doughnut shop.

If shoppers respond well to the updates in Chicago and Southern California, the changes could roll out across Amazon Fresh’s entire chain of 44 stores, Bloomberg reported.

Since the company is reportedly focusing on operations on markets outside of New Jersey for now, it’s unclear when the state’s lone Amazon Fresh location in Paramus could see a refresh.

Along with revamping existing stores, Amazon’s senior vice president of worldwide grocery stores Tony Hoggett told Bloomberg the company aims to open more locations.

He said that the company is “very deliberate about growing a big physical store grocery network in the U.S. and around the world,” but is “still working out how best to do that.”

Alongside the physical updates, the company is allowing Amazon Fresh shoppers who are not Prime members with the option of ordering home delivery through the service in metropolitan areas including Boston, Nashville, San Francisco and Dallas-Fort Worth. That offering is expected to expand to more markets in coming months, according to Amazon.

Additionally, the company is working on integrating its grocery brands so that shoppers can combine purchases from Whole Foods, Amazon Fresh and Amazon.com into one cart.

Though Amazon has owned Whole Foods Market since 2017, the company has attempted to tap further into the grocery market by expanding its Amazon Fresh banner from online-only into brick-and-mortar.

After Amazon Fresh made its New Jersey debut last summer in Paramus, the company planned to open stores in Lodi, Eatontown, Holmdel and Woodland Park but has yet to do so.

While Whole Foods is growing and remains a leader in premium, organic grocery, Amazon’s three-year-old mass market offering needs work, Amazon CEO Andy Jassy said during a February earnings call.

“We’re doing a fair bit of experimentation today with those stores to find the format that we think resonates with customers, is differentiated in some meaningful fashion, and where we like the economics,” he said. “We’re working hard at it. We see some encouraging signs, and when we do find that equation, we will expand it more expansively.”

Along with putting expansion plans on hold, Amazon recently cut hundreds of jobs at Amazon Fresh as part of a restructuring of the in-store staffing and operations model.

According to CNBC, Amazon eliminated its “zone lead” role, a lower-level management position whose responsibilities include overseeing specific departments and assisting with new employee training. The outlet reported that affected employees are being given the option of looking for new roles within the company or accepting a severance payment.

Since late last year, Jassy has taken steps to cut costs across Amazon, including the elimination of nearly 27,000 jobs across all areas of the business. Those layoffs include staffers working on grocery technologies, as well as in the Amazon Fresh supermarkets and Amazon Go convenience stores, CNBC previously reported.