Amazon: Are strikes another sign of impending CX strife?by
The first ever Amazon staff strike in the UK is just the latest employee imbroglio threatening the retail giant's status as customer experience king.
Amazon workers staged the first ever strike in the UK today, with hundreds of staff at a fulfilment centre in Coventry walking out in anger over the company’s 50 pence per hour pay offer.
British trade union GMB blasted the etailing giant for "ignoring" staff concerns and failing to give workers a proper pay rise despite recording a pre-tax profit of £204 million.
Stuart Richards, GMB senior organiser, said: “Today, Amazon workers in Coventry will make history. They’ve defied the odds to become the first ever Amazon workers in the UK to go on strike.
"They’re taking on one of the world’s biggest companies to fight for a decent standard of living. They should be rightly proud of themselves.
“After six months of ignoring all requests to listen to workers’ concerns, GMB urges Amazon UK bosses to do the right thing and give workers a proper pay rise.”
The action is the latest employee imbroglio to hit Amazon, with experts forecasting that there could be major implications for its customer experience standards.
Too many staff - or not enough?
Earlier this year Amazon announced that it would be making 18,000 job cuts, with the layoffs largely impacting the firm’s physical stores and the human resources wings of the company.
CEO Andy Jassy blamed the "uncertain economy" for the cuts, adding that it had "hired rapidly over several years." And he insisted that going forwards the company would be focused on "finding a way to do more for customers at a lower cost".
But while it is cutting staff from some parts of the business, leaks have indicated that it is struggling to find employees for its crucial fulfillment centres.
Last year a piece of Amazon's internal research leaked, revealing that the company was forecasting it could run out of people to hire in its US warehouses by 2024, as a result of attrition and competition for workers.
And after assessing its own research findings concerning Amazon's slowing retail sales, market research firm eMarketer predicted that the online behemoth's renowned ability to deliver a superior customer experience could be seriously threatened if staffing issues worsen.
Amazon has long been hailed as one of the pioneers of modern customer experience. From founder and former CEO, Jeff Bezos’ focus on ‘customer obsession’, to Amazon’s seamless customer service channels – the online retailer’s unparalleled customer experience is a big part of what transformed it from an online bookstore to a trillion dollar business.
However, a big part of what has allowed Amazon to deliver such impressive customer experience has been the sheer size of its one-million-plus workforce, as well as the aforementioned constant churn, which Bezos is reputed to believe helps bolster productivity by not allowing long-serving staff to become complacent.
With a labour model that is so reliant on their workforce, an inability to attract enough new recruits and a potential mass exodus of disgruntled employees could have serious repercussions for Amazon’s customer experience.
Amazon's slowing growth
Despite still being considered the gold standard for customer experience in both the UK and US, there have been increasing indications that Amazon’s position atop the CX mountain is not as secure as it once was.
In an article for MyCustomer from 18 months ago, Chris Ward spoke to several CX professionals who suggested that Amazon may begin to struggle.
The professionals highlighted the need for companies to provide more ‘humanised experiences’ as a key development in the future of CX, and argued that this is an area that Amazon appears to be shunning – based on the mothballing of Amazon Mayday and the launch of human-lite Amazon Go stores.
They also pointed to the growing issue of buyers’ remorse, with evidence revealing that consumer conscience is seemingly starting to sway: “In a survey of UK consumers, 32% revealed they felt extreme guilt after they’d shopped on Amazon, and were ready to move away from the service. Crucially, younger generations “harbour significantly more buyers’ remorse about their Amazon purchases”, with 44% of millennials most likely to feel guilty followed by 42% of gen-z.”
Whilst it cannot be determined whether or not the above issues have had an impact or not, eMarketer is reporting that they expect to see Amazon’s US retail ecommerce sales growth to continue to slow over the next two years. Current projections have it at 9% and 12.3% for 2022 and 2023, down from 42% and 17.8% in 2020 and 2021.
How will Amazon respond?
As well as highlighting the predicted staffing issues, Amazon's research also discussed ways in which the online retailer plans to combat its issues.
The research referenced an increase in automation, including the future integration of robots that can safely move large carts throughout warehouses, a robotic arm that can lift and move packages up to 50lbs, and an identification machine that reportedly recognises packages, eliminating the need for workers to scan labels.
Crucially its plans also included increasing the starting wage for new transportation and fulfilment workers, as well as expanding its education and skills training benefits for employees.
But with UK employees now objecting to pay offers, are these plans already coming apart from the seams?
Increased automation may be an inevitability, but with its employees still fulfilling a critical role in its operation, it's up to Amazon to prove that its staff are as important as its technology. The signs aren't good.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.