lifeline, Retail News, ET Retail
The massive infrastructure that Amazon has spent years building warehouses, distribution, delivery, and cloud computing has made the company a pivotal role in the crisis.
In an age when many are confined to their homes, consumers will have high expectations that Amazon will meet their needs and demands.
Amazon, which expanded its food operations with the acquisition of the Whole Foods grocery chain, has shifted its priorities in recent days to help people get the household products and medical supplies they need.
âThere is tremendous pressure on Amazon to meet these increased expectations,â said Bob O’Donnell, analyst at Technalysis Research.
âRight or wrong, people will expect Amazon to always have certain things, like toilet paper. Otherwise, they’ll get more grief than if a local grocery store is out. “
Amazon raised wages this week and set out to hire 100,000 more U.S. workers to add to its global workforce of around 800,000 to deal with a surge in online shopping spurred by coronavirus fears.
The Seattle-based company plans to spend more than $ 350 million to raise hourly wages in North America and Europe for employees and partners in distribution centers, transportation operations and stores.
âHaving a priority item on your doorstep is vital as communities practice social distancing, especially for the elderly and others with underlying health issues,â said senior vice president of global operations Dave Clark. in a blog post.
“We are seeing a significant increase in demand, which means our labor requirements are unprecedented for this time of year.”
– In Search of a Hero – Amazon accounts for about 37% of e-commerce sales in the United States, according to research firm eMarketer, and is the largest cloud computing company that powers online operations in the world , including for companies like rival streaming platform Netflix.
If Amazon becomes a salvation for people who are unable or afraid to go out to stores due to the risk of coronavirus, it could gain new users and become a more entrenched habit, and potentially bolster its image at a time when Big Tech is under. the fire of critics.
âIn the worst case scenario, Amazon is seen as the company that has had to shut down like other retailers (due to the coronavirus),â said analyst Patrick Moorhead of Moor Insights and Strategy.
âAt the best of times, they look like a hero.
Moorhead used Amazon to deliver groceries to his home-in-his-80s father and in-laws, elderly people “hiding” in a lakeside house.
Amazon said this week it was reorganizing its operations, slowing some deliveries to help people with more urgent needs.
“We are seeing an increase in online shopping and as a result some products such as basic necessities and medical supplies are out of stock,” Amazon said in response to an AFP survey.
âWith this in mind, we are temporarily prioritizing basic household products, medical supplies and other high demand products entering our distribution centers so that we can receive, restock and ship these products to customers more quickly. “
Amazon was also forced to control the platform to thwart price hike efforts from vendors who have stockpiled coveted supplies like breathing masks and hand sanitizers.
âIt looks like Amazon is shutting down most of them and doing it in a very visible way to send a message to others about gouging,â said Rob Enderle of the Enderle Group.
– Future risks – Amazon’s vulnerability lies in its delivery network, part of which it subcontracts to partners, according to Enderle.
âOnce the drivers start to get sick, we could have a problem,â Enderle said.
“They are a serious liability that could cripple Amazon.”
Drivers exposed to the virus could become carriers, taking it with them on their routes, Enderle said, noting that he had received a package a day earlier from a delivery driver not wearing any equipment to protect himself from the virus.
Amazon has also been criticized for keeping its warehouses open in Europe even after cases of COVID-19 were detected among workers.
The French branch of the activist group Les Amis de la Terre called Amazon’s actions irresponsible and said in a statement that the company “seeks to profit from the crisis by increasing its influence.”
A side effect of the coronavirus could be the accelerated development of drone delivery mechanisms already tested in some locations, according to Enderle.