Opinion: As workers fight back against the retail giant, have we passed peak Amazon?

Employee unrest and consumer mistrust could spell trouble for Amazon, which has enjoyed huge growth during the pandemic.

Employee unrest and consumer mistrust could spell trouble for the company, which has enjoyed huge growth during the pandemic

It’s that special time of year for retailers—the shopping bonanza that starts on Black Friday and leads into the holiday season. For Amazon, however, the busiest shopping day of the year was a turning point, with coordinated protests and strikes across 20 countries over workers’ rights and the company’s values.

This Black Friday, workers struck back through the Make Amazon Pay coalition, demanding that the company pay workers a living wage, respect workers’ right to join unions, bear its share of taxes and commit to environmental sustainability.

These issues are important not only to Amazon employees but also to consumers, who increasingly consider them when making purchasing decisions. The growth that Amazon experienced during a global pandemic may not be sustainable as consumers feel more comfortable shopping in person again. Growing the business when alternatives are seen as limited doesn’t mean that expansion will continue in the face of increasing choice.

What matters, then, is the trust that consumers have in a brand. And this is where Amazon has a serious problem.

From the brand trust research we conduct at the Gustavson School of Business, we’ve seen a steady decline in trust for Amazon among Canadian consumers over the past five years, a dip that accelerated during the pandemic while these same consumers were using Amazon services more than ever.

READ MORE: Canada’s big brands have taken a beating during COVID: survey

 We’ve seen consistent drops in the extent to which consumers trust Amazon’s functional performance—its reliability, value for money, quality. During the pandemic, allegations of price gouging, particularly from third-party sellers on the Amazon platform, tarnished its reputation. The increasing use of such sellers also reduced the control that Amazon had over quality. Supply chain disruptions caused delays in product delivery.

We’ve also seen consistent declines over this period in the extent to which consumers feel that Amazon treats them well as consumers—communicating honestly, fixing our problems, protecting our privacy. With higher volume, more and more of the interactions that consumers have with Amazon have been automated, and the human touch has been lost.

A question of values

The sharpest drop, though, has been in consumers’ trust in Amazon’s values: treating employees well, caring for the environment, contributing to local communities. Concerns over excessive packaging, carbon emissions and the competitive pressure on local businesses when they were most vulnerable underpin these values-based issues. When it comes to employee treatment, Amazon was one of the worst performers among 393 national brands in our 2021 results.

The pandemic made us realize how much we depend on front-line workers who are often the lowest paid in their organization, the new “essential workers,” to provide us with goods and services. Those organizations that were perceived as treating these people well saw a boost in their Brand Trust scores, while those seen as treating their employees unfairly saw their trust scores fall. While Amazon is in the latter category, we saw other companies stepping up to play a positive role in their employees’ lives, demonstrating that doing good leads to doing well.

Costco, for example, continued to pay a pandemic bonus (dubbed Hero Pay) for more than a year, while other big grocers cancelled their pandemic bonuses after three-and-a-half months. Costco then took it a step further and replaced the bonus with a permanent raise to help its workers when they needed it most.

Also, Costco is known for paying above minimum wage, retaining and promoting employees, and offering sick leave in a sector that often provides no such benefits. Not surprisingly, Costco ranks No. 1 for employee treatment in the latest Gustavson Brand Trust Index.

Throughout the pandemic, horror stories emerged from essential workers at Amazon, alleging unfair treatment. At the same time, the business became a trillion-dollar corporation, and pandemic spending saw its profits triple.

A new balance of power

Coming out of the pandemic, customers and employees alike face more choices. For workers, the balance of power has shifted as a shortage of labour has emerged, and they feel more comfortable asserting themselves.

The strikes that took place around the world for Black Friday reflect this new power dynamic. During the pandemic, with all its economic uncertainty, we saw a reluctance to change jobs. Whether the “Great Resignation” is a reality or not, workers feel more empowered and outspoken about their treatment. They’re asking tough questions about the values of their employers and will ultimately decide if they’re comfortable working in organizations whose values don’t align with their own.

Amazon’s turnover rate was already 150 percent a year pre-pandemic, according to a New York Times investigation. It’s unlikely that things have improved since then.

Besides employee treatment, the Brand Trust Index measures community support, societal well-being and environmental consciousness to determine a company’s value-based trust. The Make Amazon Pay Coalitionhas highlighted all of those items in its demands. It’s asking Amazon to commit to zero emissions by 2030, end partnerships with organizations that are institutionally racist and pay taxes in full.

Did this Black Friday signal that Amazon is past its peak? If our Brand Trust results are any indication, the answer may be yes. Organizations that continue to see the decline in trust that Amazon has experienced don’t tend to flourish unless they make fundamental changes that rebuild the trust that people had in them.

Saul Klein is dean of the Peter B. Gustavson School of Business at UVic.