Amazon, Wal-Mart Bulk Up For The Season
With the grinch diverted by budgetary shenanigans in the nation’s capital yesterday, both Amazon and Wal-Mart made some news that bodes well for holiday season sales, at least online.
Amazon says it will create about 70,000 seasonal jobs in its fulfillment centers nationwide — an increase of about 40% over the 50,000 workers it took on in 2012 — to help meet demand for its goods. In addition to anticipating shipping scads of Big Hugs Elmos and Furby Booms, last week it showed off two new high-definition tablets “with a unique on-screen help-desk feature it hopes will give it an advantage over devices from rivals Apple Inc and Google,” as Reuters’ Neha Dimri reports.
Wal-Mart, meanwhile, took the wraps off a more-than-a-million-square-foot warehouse in Bethlehem, Pa. It will employ about 350 people full time when it opens early next year. Another warehouse in Fort Worth, Tex., that employs 275 people and is about 800,000 square feet began to ship products last week, Alistair Barr reports in USA Today.
If the past is an accurate barometer, and prognosticators are correct about future shopping patterns, many of the seasonal workers will remain after the holidays. So far, about 7,000 of those hired by Amazon last year are currently working full time, CNN’s Julianne Pepitone reports.
“We employ temporary employees as a way of finding high-quality talent while managing variation in customer demand," an Amazon spokeswoman tells the Wall Street Journal’s Greg Bensinger, who also reports that the online retailer “has more than 20,000 full-time employees at its U.S. warehouses packing boxes with shoes, toothpaste and videogames.”
On the downside, Pepitone reports, Toys R Us last week “said it will hire 45,000 [temporary] workers this year, roughly on par with last year's plans” while Target “plans to hire 70,000 temp workers, down from 88,000 in 2012.” Wal-Mart will hire about 10% more workers; it has also added 100 stores this year.
“Wal-Mart's online sales aren't growing faster in part due to difficulties in figuring out how to efficiently and economically deliver products into the hands of online shoppers,” Shelly Banjo writes in the Wall Street Journal. “It is an unfamiliar position for a company that muscled its way to retail dominance by creating an unrivaled logistics and distribution system that helped it relentlessly push down costs.”
But it now has a scheme in place that will “combine its stores, existing distribution centers and new facilities into what it calls its ‘next generation fulfillment network,’” and the new warehouses “will also allow Wal-Mart to increase the number of items it offers to Web shoppers, a number it has more than doubled this year to 5 million from the year before,” Banjo writes.
Both Wal-Mart and Amazon have big eyes for Texas, the Dallas Morning News’ Maria Halkias reports, with the latter soon opening two new facilities, each with more than a million square feet, in Haslet and and Coppell.
They both want to offer a consistent experience to customers, says John Ernsberger of StellaService, which monitors e-commerce customer-service experiences, and they are already doing a far better job than most. “From July through late September, Wal-Mart was nearly four days faster than the ‘mass merchant’ category average, and Amazon was three days faster,” Halkias writes.
There are still folks holding protest signs in the median of what was once quaintly called the Information Superhighway, of course. Novelist and indie bookstore co-owner Jaime Clarke has, for example, launched a promotional website for his latest effort, Vernon Downs (Roundabout Press), with the URL pleasedontbuymybookonamazon.com.
“Unfortunately, most indie publishers rely on Amazon to sell their books, and, to quote F. Scott Fitzgerald, the price is high,” Clarke tells CNET’s Nick Statt. “Indie publishers realize a fraction of the purchase price and are at the mercy of Amazon's discounting policies.”
Clarke maintains that “giving the customer the lowest price, fast and easy” doesn’t necessarily make Amazon a customer-centric company, as CEO Jeff Bezos would have you believe.
“I'd argue it's not that customer-centric, especially if the customer's house catches on fire and the fire department can't come because the customer bought all their stuff on Amazon without paying sales tax,” Clarke tells Statt.
Interesting analogy. Meanwhile Amazon had sales of $61 billion last year and Wal-Mart's online sales were $7.7 billion according to Internet Retailer, as the WSJ’s Banjo reports. The latter expects to hit $10 billion this year. And overall, e-commerce sales were up 15.8% in 2012 with Amazon growing at a scorching 27.1% rate, according to Internet Retailer data.