SEATTLE – As Amazon ramps up to its holiday peak, scrutiny and criticism of the company is becoming more strategic, widespread and coordinated.
Just last week:
• A coalition of 42 labor, social and economic justice and digital privacy groups formed an alliance called Athena to “stop Amazon’s growing, powerful grip over our society and economy.”
• An investigation found that workers in Amazon warehouses were hurt on the job at a rate more than twice the industry average last year. The injuries, detailed in federal data obtained for about a fifth of Amazon’s U.S. warehouses, mounted during the company’s busiest periods, when certain warehouses ship as many as a million items a day, said the report by Reveal from the Center for Investigative Reporting and the Atlantic.
• Another report quantified the environmental, social and economic impacts of Amazon’s distribution systems in Southern California. The Economic Roundtable’s report, underwritten by a union federation, noted that while the company has provided jobs and economic growth, many of its distribution workers were living in crowded, substandard housing and earning less than a living wage.
The drumbeat continues. On Monday — “Cyber Monday” in the parlance of online retail and one of the busiest days on the Amazon calendar — a group of international union and consumer groups gathered in Brussels for a symposium devoted to reining in what it called Amazon’s “unchecked power.” In New York, more than three dozen demonstrators gathered outside the penthouse residence of Amazon CEO Jeff Bezos.
The recent criticisms follow other high-profile reports documenting traffic injuries and deaths caused by Amazon’s third-party delivery contractors, its struggles to remove unsafe and counterfeit goods from its inventory and federal antitrust scrutiny.
Does any of this affect shopping habits? The company’s brand is the most valuable in the world, but more negative sentiment has crept into social media posts. Amazon spokeswoman Kelly Cheeseman described critics as “self-interested,” funded by competitors and unions “conjuring misinformation to work in their favor.”
She said the injury rates cited in the Reveal/Atlantic investigation are a result of Amazon’s “aggressive stance on recording injuries no matter how big or small,” and suggested that other companies underreport. She also rejected any connection between injuries and delivery speeds.
“It’s not about anyone working faster than they did previously; it’s about processes and our overall operations network coming together to be able to offer fast delivery,” she said.
Amazon enters its 24th all-important holiday season as the dominant player in online retail, capitalizing on its core business proposition of low prices, vast selection and fast delivery. And, as Bain & Co. analysts wrote, “Amazon has historically won by gaining share during the holidays.”
U.S. retail spending is expected to grow 4 to 4.5% during the holidays, said Moody’s Investor Services. Online retail spending was on track to grow 15% heading into the Thanksgiving weekend, Adobe Analytics said.
While Amazon forecast lower-than-expected sales and profits in the fourth quarter, in part because of investments in one-day delivery for its Prime subscribers, it still predicted sales growth of between 11% and 20% across the company.
Amazon has become the leading starting place for online shopping, with more people in the U.S. beginning research on its site than on any other, including Google, said research cited by management consultancy Bain.
Part of Amazon’s strategy has been to make headline-grabbing moves during or just before the holiday period. Likewise, the chorus of Amazon critics have timed their announcements to its busiest periods.
“It’s no coincidence to us that this group [Athena] would emerge now because large shopping events have become an opportunity for our critics, including unions, to raise awareness for their cause — in this case, increased membership dues,” Cheeseman said.
Greater coordination is becoming a regular feature of Amazon’s detractors: Activist shareholders worked together to target the company with environmental, social and governance proposals that were voted on at its annual meeting. None passed.
Amazon’s brand was worth an estimated $335 billion, up 20% — surpassing Apple and Google, which traded the top spot for the past 12 years in a ranking by BrandZ, a unit of data and consulting company Kantar.