After the pandemic is over, what will be different about Amazon?
This article in the Wall Street Journal last week has made me reflect on the near-term shock to Amazon’s business of Covid-19, and whether the long-term impact will be positive or negative.
On the one hand, Amazon has received a lot of flack and frustration from customers since the pandemic began. In March, when states across the country began issuing stay-at-home orders, Amazon customers found themselves the victims of price gouging by Amazon sellers of hard-to-find items like toilet paper or hand sanitizer. Once the company responded by removing these sellers from their site, those hard-to-find items became impossible to find — and it has stayed that way. For non-essential items, many customers are finding the “guaranteed” two-day Amazon Prime window a thing of the past. I would imagine most Prime customers (myself included) realize that the two-day guarantee that their Prime subscription pays for need not apply during a global pandemic — indeed, it is smarter to minimize the number of packages one is ordering from Amazon right now — however, it will still likely have the effect of reducing customer reliance on Amazon. In many cases, Amazon can still fulfill orders within 2 or 3 days, but chooses to show customers an anticipated delivery window of several weeks to give them “more flexibility to fulfill orders” and to “suppress demand”. Before Covid-19, I lived in a world where I could find and ship virtually anything I wanted to my home in 48 hours or less. The ease — and knowledge that I would be able to find it — made Amazon my go-to. Now, as I’ve more frequently had to turn to other vendors for my purchasing needs, I’ve come to appreciate that I need not funnel all of my money to Amazon, even when the pandemic is over.
The long-term impact on Amazon from an employee perspective is also unclear. There have been well-publicized protests of Amazon workers across the country walking off the job, citing that their employer has been put them at unnecessarily high risk of contracting the virus without their knowledge or consent. There have been complaints that the Amazon’s cleaning and disinfecting of their warehouses has been insufficient, and that the company has failed to adequately notify employees when other worker(s) had tested positive. At the same time, however, Amazon cannot be entirely demonized from an employer perspective. At the same time other companies across the nation are slashing jobs, Amazon has hired 80,000 additional workers in just the past few weeks, as part of a publicized plan to hire 100,000 permanent workers. Whether or not from altruistic motivations or purely necessity (as a failure to react would likely result in more worker protests), Amazon has raised its base wage from $15 to $17 an hour, instituted double pay for overtime, and has granted paid leave for all workers with confirmed or suspected cases of Covid-19.
Ultimately, one of the greatest challenges in determining whether Covid-19’s long-term impact on Amazon’s business will be net positive stems from the fact that the concerns of customers in many ways are at odds with the concerns of its workers. The more facilities that Amazon shuts down, or modifies its operations in an attempt to “flatten the curve,” the harder customers will find it to get their packages in a reasonable time frame. Amazon workers delivering packages to customers that are self-quarantining are putting themselves at risk — but who can these customers turn to, if not the world’s leading e-commerce retailer?
As of yet, the impact on Amazon’s business remains unclear. But I doubt they are going anywhere anytime soon.
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