Retail warehouses - omni-channel fulfilment essential or Coronavirus breeding grounds?

Stuart Lauchlan Profile picture for user slauchlan March 31, 2020
As we're all told to shop online wherever possible, the role of the warehouse in e-commerce is all the more crucial. It's also currently subject to a lot of public health controversy,

(Logos by retailer)

Recent coverage of the pressures on the retail supply chains during the current global health crisis has made reference to the essential roles of the back end warehouses and distribution centers that power the fulfilment of online orders. In recent days, these have come front-and-center of attention as concern has grown about the well-being of the people working in them. Ocado’s robotic warehouses are very far from the norm. Behind the scenes at the vast majority of facilities is a human workforce now in search of reassurance that their health is being taken into account.

Last week, UK fashion retailer NEXT shuttered its online operations amid concerns by its warehouse personnel about the dangers of contracting Coronavirus from colleagues. With its online business playing a major role in normal times, never mind when the offline business is itself shut down, NEXT management took the decision to close it despite strenuous efforts to create a sense of safety. In a statement prior to the lights-out decision, the firm said:

We are increasing levels of safety supervision and compliance in all operational workplaces to ensure they remain safe; We are also investing in increased levels of sanitisation. We have already implemented measures to maintain strict social distancing. Further measures are being introduced to increase compliance and increase the distance between employees when they are at work.”

But it wasn’t enough and the tough decision to close online work was taken. That’s bad news for NEXT of course, but in the wider scheme of things, consumers can live for the next few weeks - or however long - without being able to buy a dress or a suit. It will be a much, much more serious concern if providers of essential goods find their own fulfilment centers coming under pressure to shutter.

Amazon walk out

Amazon has previously stated that it’s prioritising deliver of essential items, which is a pragmatic triage, but there’s trouble openly breaking out among its workforce. This week Amazon warehouse staff in New York walked out in protest at alleged conditions in their working environment after a member of staff tested positive for Coronavirus.

A total of 13 Amazon facilities across eight different states are reported to have had workers in a similar position. Christian Smalls, the Staten Island Amazon employee who led yesterday’s walkout, said on Twitter that the building needed to be closed temporarily and sanitised:

There are positive cases working in these buildings infecting thousands.

Amazon’s response to this? It fired him.

In a statement, the retailer accused Smalls of himself being a health threat to his colleagues:

Mr. Smalls was found to have had close contact with a diagnosed associate with a confirmed case of COVID-19 and was asked to remain home with pay for 14 days, which is a measure we're taking at sites around the world.Despite that instruction to stay home with pay, he came onsite today, March 30, putting the teams at risk.

Small’s dismissal is a move that could come back to hurt Amazon badly. New York Attorney General Letitia James has said:

It is disgraceful that Amazon would terminate an employee who bravely stood up to protect himself and his colleagues. At the height of a global pandemic, Chris Smalls and his colleagues publicly protested the lack of precautions that Amazon was taking to protect them from COVID-19. Today, Chris Smalls was fired. In New York, the right to organize is codified into law, and any retaliatory action by management related thereto is strictly prohibited.

For its part, Amazon has previously announced plans to hire 100,000 workers to work on online deliveries as well as temporarily raising minimum pay to $17 an hour. With an eye to the rise in online grocery deliveries, it’s also asking existing warehouse personnel to move over to its Amazon Fresh and Whole Foods arms.

But the question of working conditions isn’t going to go away.  Workers at two warehouse facilities in Southern California have called for a two week closure for sterilization of the facilities and a program of testing for employees, while a center in Kentucky has only just been given permission to re-open following a confirmed incident of a staffer contracting the virus.

It’s the same story in other parts of the globe. In the UK, social media reports have circulated of crowds of people reusing equipment without hand sanitiser being made available. Mick RIx, National Officer at trades union GMB, said:

We are so angry about this - these workers are petrified of catching and spreading COVID-19 and rightly so.  Amazon is blatantly disregarding the two metre social distancing rules, there are no masks, no sanitiser and with the vast amount of people working there there’s no way of keeping them from getting ill.  It’s impossible for Amazon workers to keep a safe distance from each other and hit their productivity targets.  Amazon has a duty of care - not just to its own workers but to the whole of the British public.

ASOS accused

The GMB is also unhappy with fashion retailer ASOS, which hasn’t followed in NEXT’s footsteps and accepted that its inventory falls into the non-essential category. In fact, over the weekend, the firm decided that now was the  time to stage a flash sale and encourage more buyers to shop with it. From a corporate point of view, it’s an understandable move perhaps, but at a time when the firm is under fire from its warehouse staff over allegedly putting profit ahead of public health, it’s not such a good look.

ASOS is undoubtedly all too aware of the dangers of its warehouse not being fully functional after taking a financial hit last year for just such a reason. But its current operating policies and practices are coming under heavy fire from workers, unions and politicians alike as its warehouse conditions are alleged to breach social distancing rules.

According to a poll of 470 staff conducted by the GMB, 98% of them say they feel unsafe at work in the current crisis. Deanne Ferguson, GMB Organiser, said: 

The situation at ASOS is disgusting – thousands of people under one roof, not enforcing social distancing.  It looks exactly like a hot bed of infection – and workers are very scared.  ASOS needs to put people before profits and make sure workers are the are distance apart and paid properly if they need to take time off. Anything else is putting unnecessary lives at risk.

Meanwhile legislator Stephanie Peacock, Member of Parliament for Barnsley East, said: 

I have spoken to a number of concerned workers employed at the ASOS warehouse in Grimethorpe who feel that profit is being put before their health in this national crisis.   It is imperative that we all do our bit to stop the spread of coronavirus, saving future lives. ASOS employs more than 4000 workers in the UK. They shouldn't have to put theirs and their family’s wellbeing on the line for a pay check.  

For its part, ASOS denies the charges, insisting that “all appropriate social distancing measures” are in place at the 680,000 square feet facility. In addition, shifts are being staggered so that workers don’t end up in bottlenecks when trying to clock on or off.  CEO Nick Beighton, said:

We totally refute these allegations. They are false and do nothing more than serve to create panic and hysteria in an already uncertain time.

In line with Government guidance, and with support from the Community Union and Barnsley Borough Council, we are striking the right balance between keeping our warehouse operational, for the good of our employees and the wider economy, and maintaining the health and safety of staff, which is always our number one priority.

Since the lockdown, we have introduced a range of additional health and safety measures and the Environmental Health Officer, who visited the site on Friday, confirmed he was happy with the protocols we have in place.

My take

I said in a previous report that this current crisis is going to shape consumer attitudes towards key retail brands based on how they respond to the current crisis. ASOS’s working conditions in its warehouse have been the subject of controversy before, but this has the potential to be on a whole different scale unless the firm is able to get ahead of a bad PR situation that’s gathering momentum. If the warehouses don’t work, the company doesn’t work and ASOS is no Amazon. It won’t be as well-equipped to ride out the storm. And, as with NEXT, we can all live without a bargain from the ASOS sale for the next month or so.

As for Amazon, it’s to be hoped that the market dominance it has will be accompanied by an appropriate level of social responsibility. In recent weeks, Amazon has remained reliable in terms of deliveries. People aren’t going to stop using it. But that privilege needs to come with responsibility. Whatever happens in either case, the Coronavirus has reminded everyone once again of the importance of the warehouse back end in the omni-channel retail ecosystem. Now more than ever, for certain key retailers, we can’t afford for those facilities to close down.

The British Retail Consortium (BRC) has this week published guidelines for suppliers on recommended warehouse practices for safe social distancing. They include: 

  • Regular and visible written or verbal communication of the government health messages.
  • Use of floor markings inside to facilitate compliance with the social distancing advice of 2 metres, particularly in the most crowded areas.
  • Regular announcements to remind staff to follow social distancing advice and clean their hands regularly.
  • Physical barriers if feasible, as an additional element of protection for workers.
  • Staggered shift start, end and break times.
  • Provision of additional pop-up handwashing stations or facilities if possible, providing soap, water and hand sanitiser.
  • Provision of wipes, hand sanitiser and disposable gloves, available to all colleagues on site.
  • Facilitate handwashing breaks.
  • Introduction of frequent deep cleaning of work areas, with attention to multi contact
  • points, such as between shifts, staff change overs and/or during breaks.
  • Use of disinfectant wipes to clean all equipment before and after each use.
  • No orders taken in person on the premises, only online or by telephone
  • Delivery slots or click-and-collect services offered at the time of ordering.
  • Regular compliance checks. 

Sound advice all round, in the UK and elsewhere.

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