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Since its founding, Amazon executives have espoused a vision of building “Earth’s most customer-centric company.” Right now, though, they’d prefer those customers to stop hitting the order button quite so much.
Overwhelmed with shoppers, trying to prioritize “essential” items like medical supplies and paper goods, and straining to keep its workforce healthy, Amazon has begun to nudge people to order fewer products by tinkering with its interface, cutting down on advertising, and making it ever so slightly less convenient to get certain packages delivered to people’s doors. A company premised on people buying stuff online is now trying to get people to buy less stuff online.
As the Wall Street Journal recently reported, Amazon in March began quietly doing away with the “customers who bought this item also bought” widgets that recommend additional products to users based on what’s in other people’s carts. The company is also backpedaling on its one-day shipping guarantee for Prime members in Europe, setting the default instead to two days for in-stock orders.
Amazon is taking an axe to many of its promotional initiatives as well. In a bid to lure in fewer customers, the company is cutting back considerably on advertising in Google search results and on commission rates for its affiliate marketing program. That program gives a portion of the revenue from a sale to e-commerce companies and media outlets—including Slate—if a customer landed on the product page through a link they posted. Commission rates are expected to drop more than 50 percent for certain items. Amazon has additionally called off Mother’s Day and Father’s Day campaigns aimed at getting people to splurge on their parents and indefinitely postponed Prime Day, the doorbuster blowout it typically holds in July.
Amazon has been sprinting to keep up with the soaring demand for home deliveries as more shops have been ordered closed and people have become increasingly uneasy about going outside. The company hired 100,000 warehouse and delivery employees in the U.S. over the last four weeks and announced on Monday that it’s looking to recruit an additional 75,000. It is also investing more than $500 million for pay increases to employees, an increase from the $350 million it had originally been planning to spend through the end of April. In March, its delivery service shifted its priorities to focus on household goods and medical supplies. It temporarily halted Fulfilled by Amazon shipments on nonessential items from third-party sellers, though Amazon reversed the ban this week. The company is also introducing waitlists for its Amazon Fresh and Whole Foods home grocery delivery service in an attempt to make the influx of orders more manageable. At-home work and entertainment is also putting unprecedented stress on Amazon’s cloud service, AWS, though the system has been designed to handle enormous spikes during emergencies.
Meanwhile, employees at Amazon’s shipping facilities have been overwhelmed themselves with both the volume of orders and the risks of showing up to work during a pandemic. Many workers are opting to stay at home in order to protect their health after discovering that colleagues tested positive for COVID-19, so some fulfillment centers have had to make do with a lean staff. Groups of employees across the country have been holding demonstrations in a bid to push Amazon to implement more safety measures at the facilities and to cease shipping nonessential items so that the volume isn’t so stressful.
Amazon achieved its dominance in the e-commerce sector partly by making online shopping as quick and frictionless as possible. Its centralization of an innumerable selection of products and development of an omnipotent delivery infrastructure made consumers accustomed to expecting their packages in mere days, and in some cases hours, after pressing “Place Your Order.” Now, with a once-in-a-generation emergency that actively discourages people from venturing out to brick-and-mortar stores, Amazon’s business model is clearly benefiting—but it looks like it may be turning out to be too much of a good thing. What we’re seeing now is a very large vehicle, with countless moving parts, lightly tapping the brakes. It’s going to make some noise.
For more on the impact of COVID-19, listen to Thursday’s What Next: TBD.