Last week, Amazon.com Inc shook investors and the entire retail when it revealed a plan to work on improving Prime to include a free one-day shipping program. Shaking things up with investors, the move nearly put to shame the rest of the day’s news: a larger than expected quarterly profit couple with dramatically slowing sales growth.
Comparing this other data, though, it makes a little sense that Amazon would look for yet more ways to restores that sales momentum. And Amazon Worldwide Operations senior vice president Dave Clark comments, “This enables Amazon to deliver orders faster and more efficiently — not by working harder but by working smarter based on decades of process improvement and innovation.”
This comment is particularly aimed at jabs from the Retail, Wholesale and Department Store Union, who has long criticized Amazon’s workplace practices. Furthermore, the RWDSU backs a push for unionization at Amazon warehouses, particularly over concerns that increasing the workload could actually be a bad thing for workers at fulfillment centers.
Indeed, RWDSU President Stuart Appelbaum notes, “With two-day Prime shipping, Amazon fulfillment workers currently face speeds of 200-300 orders per hour in 12-hour shifts. They struggle already to maintain that pace. If Amazon plans to effectively double the speed, it must also address existing workforce needs and ensure its workers are safe. Increasing fulfillment speeds means they need to hire more workers, under more sustainable speeds that don’t put workers’ lives in jeopardy.”
Obviously, Amazon dismissed these concerns in a statement, on Friday. Actually, Clark called the accusation “misguided and self-serving.”
But a closer look at the company’s numbers, last April, does suggest that Amazon might deserve at least some of these criticisms, since the median pay for employees was only $28,446 in 2017. In response, the company said, a few months later, that it plans to raise its minimum wage to $15 per hour. This is both significant and simultaneously lacking as Amazon is one the biggest employers in America. The tech giant employs 647,500 full-time and part-time workers (as of December 2018).
Now, it should be noted that Amazon has offered free two-day shipping to Prime members for at least the last ten years. This a masterful program that has been quite successful at not only attracting eager online shoppers, but it also caused a bit of a paradigm shift in the retail model as a whole. And moving to one-day shipping (which has also been available, albeit as more of a limited pilot program in some cities) will certainly bring about a new stirring.