An unprecedented level of online shopping, driven in part by the impacts of COVID-19, is set to fuel the upcoming holiday gift season and, increasingly, the offer of free shipping plays a critical role in those purchase decisions.
But what is the true cost of getting all that loot distributed to U.S. consumers who continue to be mostly homebound by the pandemic?
Amazon, the behemoth of online retailers, has had the biggest impact on a massive industry shift to free shipping as norm, thanks in part to its successful Prime membership program that now includes around 60% of U.S. households.
Amid a retail landscape profoundly altered by restrictions and behavior changes wrought by the novel coronavirus health crisis, online shopping over the next two months is predicted to outpace 2019 by a third and could reach $189 billion, according to an annual report on holiday e-commerce from Adobe Analytics. In surveys conducted earlier this month, Adobe found some 64% of consumers said they won’t be willing to pay for expedited shipping for their online purchases this holiday season.
Market research specialists NPD Group reports that its 2020 study of consumers’ holiday purchase intentions revealed that free shipping was identified as “the No. 1 factor influencing where consumers decide to shop this holiday season.”
“Consumers plan to do more of their holiday shopping online this year, and this includes shipping gifts to family and friends with whom they won’t be able to celebrate in person this year,” said Marshal Cohen, NPD’s chief industry adviser. “The addition of shipping fees to all of these deliveries is a bigger financial burden on consumers than getting the best deal on the item itself.”
“The addition of shipping fees to all of these deliveries is a bigger financial burden on consumers than getting the best deal on the item itself.” — Market researcher Marshal Cohen, NPD Group
Now, an in-depth look at the mechanisms afoot behind online deals that are driven by free shipping, with a focus on the undisputed champion of the realm, Amazon, has been published.
“The Cost of Free Shipping: Amazon in the Global Economy,” edited by University of California-Riverside sociology professor Ellen Reese and Cal State Long Beach sociology professor Jake Alimahomed-Wilson, explores how “Amazon capitalism combines convenient one-click online retailing, control over how products are stored and shipped, surveillance tools to control the workforce, and economic and political influence in every corner of the world.”
Research featured in the book looks at how the sheer scope and influence of Amazon’s self-generated ecosystem has created a hidden workforce earmarked by low wages, electronic surveillance and onerous working conditions.
In a Deseret News interview, the editors spoke about their own research as well as topics covered in other essays included in the book.
“One of our goals, was ... to critically analyze the rise of Amazon, the company’s impact on communities, on workers and labor, and how we do work,” Alimahomed-Wilson said.
Alimahomed-Wilson spent time himself shadowing Amazon delivery subcontractors in the Los Angeles area. He notes in his research that Amazon’s dominance in online retailing tracks back to the company’s “mastery of logistics.” And, a key component in that enormous logistics system, which shipped over 5 billion Amazon Prime items in 2018, is leaning on subcontractors to complete its so-called “last mile” delivery duties. That practice has served to weaken the power of existing unions in the last mile sector, according to Alimahomed-Wilson, and “introduced new levels of exploitation, contingency, racialization and precarity for thousands of package delivery drivers.”
Alimahomed-Wilson describes a device those delivery drivers call “the Rabbit,” a customized Android smartphone that functions as a surveillance/tracking device as well as the tool through which each step of a driver’s duties are dictated.
One Amazon driver said the device contributed to only adding pressure on top of a schedule that pushes him to deliver 200-350 packages in a typical shift.
“The Rabbit stresses me out,” the driver told researchers. “I’m constantly staring at it and thinking someone at Amazon is constantly watching me drive.”
Alimahomed-Wilson wrote that “workers face extreme pressure to meet the demands of Amazon’s tight delivery terms. During peak holiday periods, the number of daily deliveries can reach as high as 400 deliveries per shift. These drivers continually complain of unpaid overtime (which are violations in existing wage and hour laws), and poor working conditions, which include unrealistic expectations and pressures set by Amazon.”
The human cost behind the constant drive to move an increasing volume of packages faster and more efficiently is at the heart of an essay featured in the book that looks at the role of automation and surveillance in Amazon’s warehouse and shipping operations.
Reese, and co-author Jason Struna, interviewed dozens of current and former Amazon employees for their work and note that the goal of maximizing worker speed and efficiency goes back to the advent of the assembly line. But Amazon’s use of computer modeling and electronic monitoring at its warehouse and distribution operations was akin to “surveillance capitalism” and was playing a role in dehumanizing job positions that also feature low pay and long hours.
“The ubiquitous deployment of algorithms — computer codes based on mathematical operations that solve problems in specific ways — that direct, evaluate and discipline workers in Amazon facilities has created conditions that analysts of other industries have deemed ‘algocratic’ modes of organization or ‘rule by algorithm,’” the authors wrote.
Those digital control mechanisms aim to keep orders and packages moving through facilities at top speed and push workers to “carry out their designated tasks at a profitable speed, regardless of the distances required to walk or the volume of goods passing through their hands,” Reese and Struna wrote.
The authors also note that consequences for those who miss their marks are severe. Fail to “make rate” and an employee gets a “write-up.” Three write-ups can lead to termination, “contributing to high levels of turnover and stress among workers.”
Robotics and automation are playing increasing roles in how Amazon, and other companies, manage their distribution operations and replacing, in some cases, tedious tasks presently being performed by human employees.
At Amazon’s Salt Lake City fulfillment center, a giant 855,000-square-foot facility near Salt Lake City International Airport that packs and ships a selection of products numbering over 15 million, robots outnumber the 1,500 or so employees who keep operations there moving 24 hours a day, seven days a week. Reese and Struna looked at how feasible, and proximate, a completely automated, robot-driven distribution process might be. Although automation and robotic devices have the potential to replicate a lot of the current tasks shouldered by humans, Amazon’s director of robotics fulfillment told researchers a “lights out” facility is likely “at least 10 years away from fully automating the processing of a single order (now) picked by a worker inside a warehouse.”
While researchers featured in “The Cost of Free Shipping” make the case that electronic surveillance of workers enables Amazon to control and discipline those who do not work quickly or steadily enough, the company discounts those assertions.
In an email, Amazon spokeswoman Lisa Levandowski said Amazon workers’ performance is assessed over an extended timeline and recognitions, and accommodations, are made for those whose work productivity may be being affected by various issues. She said the company also provides additional training for those who may need it.
“These claims are not true,” Levandowski said. “Like most companies, we have performance expectations for every Amazonian — be it corporate employee or fulfillment center associate — and we measure actual performance against those expectations.
“Associate performance is measured and evaluated over a long period of time as we know that a variety of things could impact the ability to meet expectations in any given day or hour. We support people who are not performing to the levels expected with dedicated coaching to help them improve.”
Amazon says its continued deployment of robotics and automation is improving workplace conditions and making jobs easier on employees. The company also said it works with subcontractor Delivery Service Partners to set realistic performance expectations that do not place undue pressure on drivers. Those subcontractors are also required to provide affordable health care coverage for employees who work 30 or more hours a week and grant full-time drivers a minimum of 80 hours of paid time off each year.
Earlier this year, Amazon blew past the 1 million employee mark, according to a recent report from The Washington Post. The company has not only added some 400,000 jobs thus far in 2020, according to the Post, but has grown its fulfillment capacity, which includes warehouses, delivery stations and drivers it uses to get packages to customers by some 50% this year. Most of Amazon’s crop of new hires are filling positions in its warehouse and delivery operations.