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As a globally expanding e-commerce company, Amazon is required to maintain its service quality in terms of logistic efficiency, product diversity, reliable transactions, and many more to keep its public reputation and customer trust. Not only that, as a giant company that has over 1 million employees around the world, Amazon also needs to take care of them as the best capital to provide good services to the customers (Bosze, 2024). Customers’ good reviews increase Amazon’s revenue and eventually increase employee welfare, which can be a positive cycle that brings benefits to all parties.
However, Amazon has been found to neglect workers’ needs because of putting the speed of delivery of goods on top of employees' benefits. In 2021, the CEO of Amazon received an email from an Amazon warehouse worker complaining about the underpaid issues. Based on the investigation report generated by the New York Times, Amazon has been found to systematically shortchange workers' salaries. This problem needs to be taken seriously because it will harm the reputation of Amazon and also cause a brain drain (Kelly, 2024).
Therefore, ‘How might we prioritize the well-being and fair treatment of employees’ welfare while maintaining the high quality of services provided?’ will be a good scope for Amazon to take the next step.
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The article about Amazon’s bad employee culture published by New York Times had a great impact on Amazon's reputation. To resolve this issue, Amazon should consider employees’ complaints to be just as important as clients’ complaints. The company should ensure a complaint mechanism is in place to let employees know how to lodge a complaint, as well as allows employees to make complaints privately without approaching their manager or other members of the department. All the complaint details and progress should be provided in the mechanism such as how each complaint is reviewed, how the action plan is implemented, and how follow-up communications are conducted.
At the same time, employees should be viewed as the company’s most important customers, instead of the most important asset of company. This is due to employees are those who have the greatest ability to impact consumer loyalty, retention, and acquisition. They are also people who know and are familiar with the inner workings of your company. Therefore, employees should be valued to ensure the high quality of company operations and services, in order to maintain the company’s reputation and legitimacy (Elizabeth, 2016).
Challenges of Amazon
1. Unsafe Work Labour
One of the challenge faced by Amazon is the working condition of warehouse workers. The Occupational Safety and Health Administration (OSHA) of the United States Department of Labour has cited Amazon for failing to maintain safe working conditions at three additional warehouses in Aurora, Colorado, Nampa, Idaho, and Castleton, New York. According to the United States Department of Labour (2023), its warehouse workers were at risk of injury due to the pace of work and safety hazards. These references are part of a larger investigation spurred by referrals from the U.S. Attorney's Office for the Southern District of New York, which resulted in similar discoveries at Amazon locations in Florida, Illinois, and New York by July 2022. OSHA discovered that Amazon exposed workers to a high risk of low back injuries and musculoskeletal diseases as a result of frequent heavy lifting, awkward motions, and lengthy work hours. Injury logs revealed a high prevalence of these illnesses among warehouse workers. As a result, OSHA implied penalties of $46,875 for violations at the Aurora, Nampa, and Castleton facilities. (McClure, 2023)
2. The competition among online shopping platforms is intense
During the Covid-19 lockdown, online shopping became a crucial lifeline for people. Many businesses saw an opportunity and ventured into e-commerce. Before this, Amazon was the most popular e-commerce platform globally. However, Amazon is not as popular in Malaysia. Data shows that half of Amazon's sellers are based in the United States(Hopstack, 2024). Although Amazon offers a wide variety of products, the high shipping costs deter people outside the US. As a result, other online shopping platforms like Shopee, Lazada, and Taobao have easily taken Amazon's place in the hearts of Malaysians. Purchasing on these platforms is simpler compared to Amazon. Additionally, Shopee, Lazada, and Taobao are very user-friendly for Malaysians, offering multiple payment options that sellers can choose from based on their convenience (Editorial, 2024). In summary, Amazon's sales have significantly declined due to the emergence of these competing platforms, most of which are based in China. Their products are cheaper, allowing them to enter the market at lower prices. Amazon might need to adopt more innovative strategies to attract more businesses and sellers (Hopstack, 2024).
Opportunities of Amazon
1. Technology Innovation
Nowadays, technology has become an integral part of our daily lives and has dramatically impacted how we interact, communicate, and carry out various activities. Therefore, Amazon has the opportunity to enhance its operations and customer experience by making use of the potential presented by technological innovation, especially in the areas of machine learning and artificial intelligence.
Amazon’s robotics and delivery teams are always at the forefront of innovating to deliver a great workplace and customer experience. For instance, in their existing robotic arms, Robin handles the packages in the warehouse before the delivery journey begins showing the opportunities to develop new technology to support individual handling during the fulfillment stage and they improved the previous robotic arm, Robin into Sparrow, the first robotic handling system which can not only detect and select but also move individual products into the inventory including the recognization process and handling process (Amazon,2022). Additionally, Sparrow takes on repetitive tasks enabling the workers to focus more on other jobs while also advancing safety (Amazon,2022).
2. Technology innovation using VR and AI
On the other hand, Improving customer experience is very important for Amazon's subsequent development. If Amazon could implement augmented reality (AR) it could change online shopping by giving shoppers the chance to see things in their real environment. Customers can virtually test on clothes or check if furniture will fit in their home, minimizing ambiguity and refunds. Additionally, improving the integration of customer feedback into product development can significantly increase satisfaction. By actively listening to and taking action on customer reviews, Amazon can customize products to more accurately meet consumer needs. This feedback loop ensures continuous improvement and builds trust. Furthermore, fast and tailored customer assistance via AI-powered chatbots and support can fix difficulties quickly and efficiently, improving the overall purchasing experience(Amazon Connect Introduces Generative AI Capabilities to Help Organizations Boost Worker Productivity, Save Costs, and Improve Customer Service Experiences, 2023). These innovations not only attract new customers but also increase client loyalty, maintaining Amazon's position as the customer-centric leader in the field of online shopping.
References
Bosze, A. (2024, May 6). How many employees does Amazon have? (2024). Doofinder. https://www.doofinder.com/en/statistics/how-many-employees-does-amazon-have#:~:text=2021%3A%201%2C608%2C000%20Amazon%20Employees,-Q1%202021%3A%201%2C271%2C000&text=The%20year%20concluded%20on%20a,in%20a%20rapidly%20evolving%20market.
Kelly, J. (2024, February 20). A Hard-Hitting investigative report into Amazon shows that workers’ needs were neglected in favor of getting goods delivered quickly. Forbes. https://www.forbes.com/sites/jackkelly/2021/10/25/a-hard-hitting-investigative-report-into-amazon-shows-that-workers-needs-were-neglected-in-favor-of-getting-goods-delivered-quickly/?sh=67cc648051f5
McClure, M. (2023, February 1). US Department of Labor finds Amazon exposed workers to unsafe conditions, ergonomic hazards at three more warehouses in Colorado, Idaho, New York. U.S. DEPARTMENT OF LABOR. https://www.dol.gov/newsroom/releases/osha/osha20230201-0
Amazon. (2022, November 11). An inside Look at the Innovations That Power Amazon’s Operations and Delivery Networks. Amazon. https://www.aboutamazon.com/news/transportation/an-inside-look-at-the-innovations-that-power-amazons-operations-and-delivery-networks
Hopstack, T. (2024, April 18). Top 8 amazon challenges in 2024 & their solutions. RSS. https://www.hopstack.io/blog/challenges-faced-by-amazon-fba-sellers
Editorial, iMoney. (2024, February 15). The best online shopping platforms in Malaysia. iMoney Malaysia. https://www.imoney.my/articles/online-shopping-guide-malaysia/best-online-shopping-sites
Elizabeth. (2016, August 19). 5 WAYS TO FIX A BAD EMPLOYEE CULTURE WE LEARNED FROM AMAZON AND THE NY TIMES. My Factoring Brokers. https://myfactoringbrokers.com/amazon-employee-culture-nyt
Amazon Connect introduces generative AI capabilities to help organizations boost worker productivity, save costs, and improve customer service experiences. (2023, December 7). Press Center. https://press.aboutamazon.com/2023/11/amazon-connect-introduces-generative-ai-capabilities-to-help-organizations-boost-worker-productivity-save-costs-and-improve-customer-service-experiences
WORKLOAD TABLE
Name | Topic |
ERIN CHUNG SHING (TP070387) | Challenges of Amazon |
FOO JING SZE (TP070845) | Opportunities of Amazon |
CHUAH XIN YI (TP070340) | Opportunities of Amazon |
CHONG PEY SHAN (TP070414) | Generate Question |
GOO MAY SHYN (TP070055) | Generate Solution |
LEE WAN CHIEN (TP070220) | Challenges of Amazon |
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