A Global Pandemic is Great for Amazon’s Sales, No Matter How You Spin It

An Amazon Post Full of Nonsense Carries a Serious Underlying Message

We all know the world is not fair. For one thing, celery is good for you, and French fries are bad for you. Yet we crave French fries and eat celery when people are watching. 

Also, it turns out that this global pandemic – coronavirus, COVID19 – is fantastic for Amazon’s business while it’s bad for most of its competitors. Which seems highly unfair. 

Yesterday, Amazon announced its plans to hire 100,000 more employees and is raising pay in the US, Canada, the UK, and Europe by $2 per hour through April. That’s because countless retailers are closing their stores and more people are working from home. As a result, more commerce – retail and B2B – is moving online. 

A rising e-commerce tide is raising all boats, but there’s enough business going to Amazon to overflow its banks. 

The Spin Doctor Will See You Now

I don’t think Amazon’s doing anything wrong; it’s not the company’s fault everyone is working remotely – retail stores are closed and so people are buying online. 

But Amazon needs to fire its PR agency and quit trying to spin things so much. For example, the headline of the blog post announcing the new hires is: 

Amazon ramps hiring, opening 100,000 new roles to support people relying on Amazon’s service in this stressful time.

Amazon’s Senior VP of Worldwide Operations is identified as the author, but there’s almost zero chance he wrote this himself. I say this because:

1. Big companies have PR firms to write press releases and blog posts, and
2. No veteran operations executive I’ve ever met would try to come off like a soup kitchen manager announcing he was bringing in more volunteers to serve the homeless because it’s cold outside.

The nonsense continues further in the post with this gem:

We also know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis. We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back.

This is the best spin of all. Let me replace this verbose and condescending hokum with plain English: these are temporary positions. 

This blog post reminds me of Bezos’s 2019 letter to shareholders in which he claimed that “third-party sellers are kicking our first-party butt” because Amazon only supplies 42% of its gross merchandise volume these days (the rest come from third parties). He makes it sound like a big mystery when in reality, it’s obviously just a way for Amazon to manage its earnings: 

• Need sales growth? Add a bunch more third-party SKUs. 
• Need higher margins? Buy around those third parties and pocket the extra margin yourself. 

Bold, unprecedented, pure Amazon genius: yes. Portraying it as a mystery or a butt-kicking patronizes the reader. Amazon is one of history’s most amazing business stories, but the “Bezosplainin’” has to stop. 

The Online Boost is Permanent – and That’s No Bull

Putting aside all of the distractions, hiring 100,000 workers is an enormous investment, even for a company the size of Amazon. The company reported about 800,000 full- and part-time employees at the end of 2019. The 100,000 new positions represent a 12.5% workforce expansion in one action. Then there’s the $2 per hour wage increase through April, which the company estimates will cost it over $350 million in the US, Canada and Europe. 

A whole bunch of those hospitality, restaurant and travel workers aren’t going back to their Marriotts, Sizzlers and Ubers when this is over. They’re going to be working at Amazon. Because even though the company is hiring people as temps, they’re probably going to need a lot of them when this crisis has passed. 

Here’s why: 

Given Amazon’s actions, it’s likely that enormous numbers of people are setting up new Amazon and Prime accounts right now. Also, it’s human nature to use a supplier more often as you become familiar with the company. Lots of people are becoming increasingly comfortable with shopping on Amazon while they’re working from home. 

We all knew that digital capabilities were increasing in importance in distribution. But I doubt anyone expected a pandemic would come along to turbocharge momentum in that direction. Yet, here we are, and I doubt we will be going back. More customers are going to demand outstanding online capabilities because they will be comparing you with Amazon and Amazon Business. 

If you’ve been dragging your feet about investing in e-commerce because you thought it wasn’t essential yet, then you’re losing money right now as more people work from home. And no matter how good your e-commerce capabilities are, they’re going to have to get better. Because Amazon may be stuffing a lot of nonsense into their communications, but their capabilities are truly incredible. 

And that’s no spin.