Just weeks after the nation’s two largest retailers each closed the books on record annual results and had begun to square off on new market-share fights in key categories like apparel and groceries, Amazon and Walmart have found themselves facing a new set of challenges: labor and delivery.
In this week’s Whole Paycheck report we look at the confluence of events happening to each company and how their ongoing competition is actually complicating their shared goal of getting more products to more people more quickly.
‘BAmazon’ Battle
It seems like only yesterday that Amazon and Walmart were basking in the glow of 2020’s record sales, fueled by rising consumer demand, changing shopping habits, three rounds of stimulus checks and rising hopes that the country was getting ahead of the pandemic.
While Amazon has long sought to maintain the union-free status of its 800,000 U.S. employees, the company is facing its most difficult test yet as close to 6,000 workers at its warehouse in Bessemer, Alabama prepare to vote on whether or not to unionize in a faceoff that has been dubbed “BAmazon.”
As much as Amazon has tried to diffuse the labor issue discreetly, a steady stream of comments and pro-union support from the White House on down have made that nearly impossible.
“Solidarity from around the world is rolling in for BAmazon union workers,” the Retail, Wholesale and Department Store Union website declared. “Workers around the world are standing shoulder to shoulder with workers in Bessemer, Alabama fighting to bring the first union to an Amazon Fulfillment Center in the United States.”
If the labor dispute was confined to just one location that would be one thing, but Amazon has 110 fulfillment centers in the U.S. and 185 overseas, a scenario The Wall Street Journal characterized as growing pressure from the U.S. and Europe that suggests the eCommerce giant’s union battles will continue.
An Amazon spokeswoman told the Journal that the company “already offers what unions are requesting for employees: industry-leading pay, comprehensive benefits and opportunities for career growth.”
Employees at the Bessemer facility have to mail in their ballots by March 29, but whatever the outcome this labor fight will not be over, nor be limited to Amazon.
DoorDash Drivers Dish Walmart
A simple internal DoorDash survey asking its drivers how they felt about the company’s new delivery partnership with Walmart came back with a simple but conclusive response: not much.
According to a Reuters report, the drivers were less than thrilled with the weight of some Walmart orders, as well as the wait to pick them up. In addition, the survey found that compared to the primary food delivery business, Walmart customers may not be the best tippers either.
Driver Kat Ensey, who is 53 and stands 5’ 2” tall, told Reuters of the time she hauled 13, 30-pound bags of soil from her car to a customer’s back patio and earned $4 from DoorDash and nothing from the customer.
Walmart had already severed ties with Uber and Lyft and has been adding DoorDash and other delivery services to its roster as it continues to ramp up its 6-month-old Walmart+ service that is seen by the company as crucial in its fight to match Amazon.
The problem is that this “final mile frenzy,” in which seemingly every business and product is now offering same-day — or faster — delivery to win business, has seen one of the most important parts of the process getting outsourced.
It also doesn’t help that the delivery industry itself is struggling to keep up, and the ability to find and retain reliable riders and drivers is proving to be difficult, especially since they usually are contracted workers who receive few to no benefits.
The growing imbalance within the delivery business was on display in another venue this week as the Amazon-backed U.K.-based Deliveroo set a $12 billion valuation for its upcoming initial public offering (IPO). Notably, some of the money-losing startup’s 50,000 couriers have threatened to strike if they’re not given greater job protection and benefits.
But it is not just disgruntled workers. Some of the U.K.’s largest and most influential investment firms have also entered the fray, saying they would not take part in the year’s largest IPO, despite the favorable economics for the delivery business.
“We’re looking to invest in businesses that aren’t just profitable, but are sustainable, [and] employee rights and engagement are an important part of that,” Aberdeen Head of U.K. Equities Andrew Millington told Bloomberg.
If there is a silver lining for Walmart in all of this it might be that the delivery problem is happening early on in the ramp-up phase of its new subscription-based home delivery offering.
And if the DoorDash deal doesn’t work out, there’s always goPuff, the Philly-based delivery service that does business in 650 cities and just announced a $1 billion fundraise which valued it at about $9 billion.
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