Podcast Summary: Amazon’s Omnichannel Grocery Strategy with Tomorrow’s Jordan Berke

Podcast Information:

• Title: The CPG Guys
• Hosts: Sree Rajagopalan & Peter V.S. Bond
• Episode: Amazon’s Omnichannel Grocery Strategy with Tomorrow’s Jordan Berke
• Release Date: April 22, 2025
• Description: CPG & FMCG eCommerce industry leaders explore how brands and retailers engage with consumers across various channels.

Introduction

In this insightful episode of The CPG Guys, hosts Sree Rajagopalan and Peter V.S. Bond delve into Amazon’s omnichannel grocery strategy with their special guest, Jordan Burke, founder and CEO of Tomorrow. Recorded live at Amazon Fresh Store Number One in Woodland Hills, California, the discussion provides an in-depth evaluation of Amazon’s foray into the physical grocery retail space and its implications for the broader market.

Amazon Fresh Store Number One: Ground Zero for Omnichannel Initiatives

Sree Rajagopalan sets the stage by introducing Amazon Fresh Store Number One as the epicenter of Amazon’s physical retail initiatives.

Sree Rajagopalan [01:02]: “We're here live at the Amazon Fresh Store Number one, Woodland Hills, California, to evaluate the latest in-store grocery operations.”

Jordan Burke emphasizes the significance of this store as a testing ground for Amazon’s omnichannel strategy, aiming to deliver an "epic outcome for the consumer."

Jordan Burke [03:09]: “Amazon and Grocery is going to be an epic outcome for the consumer. We're here to see if it was epic for us when we shopped and how the convenience and experience measured up.”

Comparative Analysis: Amazon Fresh vs. Walmart China and Other Retailers

Peter and Jordan compare Amazon’s grocery store with Walmart China’s advanced retail formats, highlighting areas where Amazon is progressing and where it lags.

Peter V.S. Bond [02:55]: “I think you and I and global grocers around the world are wondering, is Amazon going to be the next big competitor in this segment?”

Jordan contrasts Amazon’s offerings with Walmart China, noting that while pricing strategies are competitive, the overall merchandise differentiation is lacking.

Peter V.S. Bond [05:16]: “Amazon is trying to pay us to be here by investing in price, and that is noticeable. But the product itself isn’t different enough from other retailers like Ralph’s, Safeway, or Trader Joe’s.”

Pricing Strategies and Sustainability Concerns

The discussion turns to Amazon’s aggressive pricing strategies, including substantial discounts and digital coupons, questioning their sustainability.

Peter V.S. Bond [05:23]: “Amazon is trying to pay us to be here by investing in price, and that is noticeable.”

Jordan notes the significant discounts offered, such as 30% off with certain credit cards, but raises concerns about the long-term viability of these pricing models.

Jordan Burke [05:47]: “How long is that sustainable? We saw plenty of other offers, but the sustainability of these discounts is questionable.”

Technological Implementations: Self-Checkout and Alexa Kiosks

The hosts evaluate Amazon’s technological integrations within the store, including self-checkout systems and Alexa kiosks, assessing their effectiveness in enhancing customer experience.

Peter V.S. Bond [06:43]: “The just walk out vision intended to remove friction, but currently, it just creates a self-scan experience where you still have to pay and scan everything.”

Jordan compares Amazon’s technology to alternatives like Instacart’s Capercard, finding Amazon’s approach less user-friendly.

Jordan Burke [07:38]: “Capercart is intending to be more just walk out with cameras and scales. Amazon’s cart requires lining up UPC codes with a camera, which is cumbersome.”

Despite these challenges, the digital coupon experience receives praise for its customization based on purchasing behavior.

Peter V.S. Bond [08:33]: “Amazon's digital coupon experience may even be best in class.”

Retail Media Strategy: Maximizing In-Store Digital Inventory

A significant portion of the conversation focuses on Amazon’s retail media strategy, leveraging in-store digital screens to enhance advertising opportunities.

Jordan Burke [09:39]: “Amazon has 77 cents to every dollar in the retail media network universe. Utilizing in-store screens contextualized to the aisle is a winning formula.”

Peter acknowledges the potential but points out the current limitations due to low store traffic.

Peter V.S. Bond [10:15]: “There's unique exposure, especially in categories like poultry, but the overall traffic is still low, limiting inventory's advertising potential.”

Grading Amazon’s Grocery Experience: Assortment, Value, and Convenience

The hosts rate Amazon’s grocery store performance across three critical dimensions: assortment, value, and convenience.

1. Assortment

   • Peter: “B minus. The merchandise assortment isn’t compelling enough to entice customers away from established retailers.”
   • Jordan: Agrees, citing limited unique offerings like samosas.

2. Value

   • Peter: “B minus. Despite attractive pricing, the lack of differentiated products undermines the overall value proposition.”
   • Jordan: Highlights the strength of customized digital coupons enhancing perceived value.

3. Convenience

   • Peter: “B to B plus. While the digital coupons are seamless, the checkout process introduces new friction points.”
   • Jordan: “A minus initially, downgraded to B plus due to issues with the self-checkout system.”

Notable Quote:

Peter V.S. Bond [12:43]: “If I'm looking for savings and I don't need a differentiated assortment, then it comes down to convenience. Can I get in and out quickly?”

Stock and Inventory Management Challenges

The episode addresses significant challenges in inventory management, particularly the high incidence of out-of-stock items, which negatively impacts customer experience.

Jordan Burke [16:51]: “In about 20% of shelving here at Amazon, out-of-stock items create a real painful experience for consumers.”

Peter shares a compelling anecdote about a legendary Walmart store manager using physical demonstrations to emphasize the severity of out-of-stock issues.

Peter V.S. Bond [17:07]: “He'd see out of stocks and if he could fit himself into that space, that was a serious problem. That's a retail crime.”

Future Outlook: Same-Day Delivery vs. In-Store Innovations

Looking ahead, the hosts discuss Amazon’s strategic focus on same-day and faster delivery services as a more impactful growth driver compared to its physical store innovations.

Jordan Burke [14:11]: “Amazon is definitely going to continue to win the race because their same day or faster delivery is probably having a bigger impact on their growth.”

Peter highlights Amazon’s expanding same-day delivery coverage, which is set to significantly bolster their grocery share globally.

Peter V.S. Bond [15:53]: “Amazon now has same day or faster delivery in 140 US cities, a 50% increase in coverage from last year, and it's expanding internationally.”

Final Grading and Conclusion

After a comprehensive evaluation, the hosts conclude with an overall grade for Amazon’s physical grocery experience.

Peter V.S. Bond [18:23]: “Amazon's physical grocery experience, this one particularly, is still a C to me.”

Jordan expresses a mix of disappointment and hope, acknowledging Amazon’s potential for improvement under new leadership.

Jordan Burke [18:31]: “Whole Foods merchandising has improved, and with Jason leading Amazon Grocery from Whole Foods, there's potential for inspiring changes.”

The episode concludes with a commitment to revisit Amazon Fresh Store Number One in February 2026 to assess progress and changes.

Jordan Burke [20:16]: “We have a whole year to plan so we're not missing February 2026. It's been a pleasure, man. It's been a pleasure.”

Key Takeaways

• Assortment Needs Enhancement: Amazon Fresh lacks compelling product differentiation compared to established retailers, limiting its ability to attract loyal customers.

• Pricing Strategies Are Attractive but Unsustainable: While aggressive discounts and customized digital coupons offer immediate value, their long-term sustainability remains questionable.

• Technology Integration Requires Improvement: Current self-checkout and Alexa kiosk implementations introduce friction rather than streamline the shopping experience.

• Retail Media Potential is Significant but Limited by Traffic: In-store digital advertising offers unique opportunities, but low foot traffic hampers overall effectiveness.

• Inventory Management is Crucial: High rates of out-of-stock items undermine customer trust and satisfaction, highlighting a critical area for improvement.

• Same-Day Delivery is Amazon’s Growth Driver: Investments in fast delivery services are proving more impactful for Amazon’s grocery market share than their physical store advancements.

Notable Quotes with Timestamps

• Sree Rajagopalan [01:02]: “We shape the future of commerce to drive your growth.”
• Peter V.S. Bond [02:55]: “Is Amazon going to be the next big competitor in this segment?”
• Jordan Burke [05:47]: “How long is that sustainable?”
• Peter V.S. Bond [08:33]: “Amazon's digital coupon experience may even be best in class.”
• Jordan Burke [14:04]: “Same day or faster is Amazon's biggest priority.”
• Peter V.S. Bond [18:23]: “Amazon's physical grocery experience... is still a C to me.”

Conclusion

This episode of The CPG Guys provides a critical examination of Amazon’s current position in the omnichannel grocery landscape. While Amazon excels in areas like pricing and delivery speed, significant challenges in assortment, technological integration, and inventory management prevent it from fully realizing its potential as a leading grocery retailer. The hosts and guest Jordan Burke agree to monitor Amazon’s progress, anticipating substantial changes and improvements in the coming year.

Listen to the full episode on cpgguys.com to gain deeper insights into Amazon’s strategies and the evolving grocery market.