A factory of the future
According to American business magazine Fast Company, Amazon is “the world’s most innovative company of 2017.” To understand why, “you need to look beyond sales figures ($100 billion in 2015) and stock prices (up more than 300% in the past five years) and consider three initiatives that drive Amazon today: Prime, the company’s rapidly proliferating $99-per-year membership program; an incursion into the physical world with brick-and-mortar stores, something the company has long resisted; and a restless rethinking of logistics, epitomized by a new fulfillment center an hour outside Seattle that features high-tech robots working alongside human workers like a factory of the future.”
With Prime, Amazon customers enjoy a free delivery service in one or two days; a trove of content including videos, games, digital books and music; and image storing solutions. For the company, it’s a matter of cultivating customer loyalty, and also turn them away from their competitors. In that vein, the company expanded its online video service, Prime Video, to 200 countries, including France, in December 2016, to challenge Netflix at a global level.
That same year, Amazon opened its first grocery store in Seattle, where its headquarters are based. The 170 m2 store – a small space compared to the company’s characteristic warehouse-like stretches – doesn’t have any checkout counters, and, accordingly, no lines or wait time. To access it, you must have an Amazon account, download the Amazon Go app, and scan your smartphone upon arrival to identify yourself. You then choose your merchandize and walk out with those items – smart sensors allow Amazon to automatically detect which items have been removed and which ones have been put back on the shelf. Those that have been removed are added to a virtual cart and then to a receipt e-mailed to you shortly thereafter.
About an hour’s drive away from this store of the future is located the distribution center of the future. It was built next to a military base in the city of DuPont. It’s recognizable by the constant stream of trucks loading and unloading products. These are placed on a conveyor belt and photographed from every angle. They’re then separated and classified according to type, size, and weight. Next they’re towed away, occasionally by self-driving cars. Some of the products are so heavy they must be lifted by a robot capable of lifting a car. They operate alongside less impressive but equally efficient robots from the Kiva Systems startup, which Amazon bought in May 2012 for $777 million. Today, the company, which employs half a million people worldwide, uses 75,000 robots in its warehouses.
The DuPont distribution center’s got competition when it comes to futuristic feats. Amazon, which has already made deliveries by drone, has filed a patent for a system of flying warehouses. The document proposes to store products in airships hovering at an altitude of 13,000 meters and move them according to supply and demand. They could come closer to Earth to serve as billboards and allow drones to deliver faster. Flying shuttles between airships and drones are also planned.
When Amazon was created by Jeff Bezos in July 1994, it was a mere shopping website specialized in book sales. That seems like a distant memory now. In 20 years, Amazon has become a technology giant in league with Google, Facebook, IBM and even Microsoft. On September 28, 2016, the five companies announced they were partnering up to put “artificial intelligence at the service of citizens and society.” Their partnership is an NGO that “will conduct research, recommend good practices, and publish the results of this research under an open license.”
“Like Apple, the company is so successful it must reinvest part of its profit and constantly reinvent itself,” the American economics magazine Forbes writes. “Amazon’s sales in the second trimester of 2017 increased by 25% to 38 billion dollars. This comes on the heels of a 23% increase in the first trimester equivalent to 35.7 billion dollars and an increase in the fourth trimester last year of 43.7 billion dollars. Yes, consumers buy a lot of stuff online.” They do particularly on Black Friday, the special discount day held on November 24 this year. Amazon’s stock market price jumped 29.84%, and Jeff Bezos’ personal fortune, which holds more than 10% of the company’s capital, surpassed the symbolic 100 billion dollar mark.
That’s how Amazon’s boss became the richest man in the world. But he’s also “the worst boss in the world.” Or that’s what the International trade union confederation called him in May 2014. “Workers wear digital numbers in Amazon’s distribution centers so the company can keep track of their every move,” ITUC secretary general Sharan Burrow said. “There are no agreements regarding breaks or work pace. There is an atmosphere of irritation and harassment is common. Employees are reprimanded if they talk to each other or even stop to catch their breath.”
These accusations were echoed the following year in a New York Times article. In it, former employees and anonymous sources say Amazon is a company where some workers are exploited to the point of exhaustion and others are unceremoniously turned away. “Almost all my colleagues have cried at their desk,” says Bo Olson. “There is so much turnover that we start to think of others as interchangeable,” says Amy Michaels. “We know that there’s always a risk the people around you will have left or been fired tomorrow.” Those who are able to withstand the pressure are nicknamed “the Amabots” – “Amazon’s robots.”
The “Anytime Feedback Tool” is an internal software that allows anyone to comment on their colleagues’ work. It’s become a source of intrigue and controversy. “Some employees manage to denounce the work of the same person at the same time,” the New York Times article writes. It was strongly criticized by Jeff Bezos who said, “This survey does not describe the Amazon I know or the people I work with every day,” in an internal memo to the company. “Anyone working in these conditions would go crazy. For my part, I would leave such a company.”
Many Amazon employees defended Jeff Bezos. Nick Ciubotariu took to Medium. “I have never been criticized for having a social life outside of Amazon,” he wrote in a long post. “We’re not the only ones trying to hire the best talent. It would be stupid to create an environment that made people want to leave.” Others, such as the entrepreneur Dick Costolo, also came to Bezos’ rescue, denouncing the article as “lacking context.” Investor Josh Elman also said he regretted the article “attacked a winning and innovative culture.”
Jeff Bezos will still have a hard time convincing the rest of the world. In Scotland, Amazon workers are paid so badly some have resorted to sleeping in tents close to work. In France, the company has been accused of hiding workplace accidents suffered by employees. More recently, the management at the Lauwin-Planque warehouse started a “game” encouraging employees to report safety breaches to win “points” and prizes. According to the General Confederation of Labor, the first prize is a drone.
Ever since Since Amazon acquired Whole Foods’ organic food distribution business for $13.7 billion, many have wondered what an “Amazon Foods” might look like. The design agency Argodesign tried to answer some questions by publishing a series of new concepts on its website. “While we were watching this new merger, we observed a negative public reaction,” they wrote. “Maybe because we’re from Austin and because we’ve seen Whole Foods rewrite the history of grocery stores in the last few decades, we see things differently. We see an opportunity: the products they create together could bring about positive change in the way we eat and live.”
The first concept of the Argodesign series is a shared, smart fridge. It opens both from the outside and the inside. The outside door allows it to receive products that Amazon thinks you want. The inner door is for your personal use. You only pay for what you consume, and the products you don’t want are redistributed to your neighbors. But do you really want to let Amazon choose what’s in your fridge and let them know exactly how much you eat?
The second concept in the series is an offshoot of self-driving cars. Fewer and fewer people own cars, so more and more people have garage space. Amazon proposes to rent out hydroponic systems so that you can convert your garage into a vegetable garden. You’d be able to keep some of the crops and sell the rest. The third concept allows you to buy dishes cooked by your neighbors. There’d be no risk of getting sick because you’d scan the food to identify allergens and pathogens. As for the fourth concept, it allows Amazon to know what, among its products, you like and dislike. It’d be like a triage: placing products in one section tells the company to deliver the product again, placing it in the other advises against it.
“With these new concepts, we are bringing the system of production closer to the consumer,” says Argodesign. “We are changing the way food is distributed and stored so that it stays fresh, is more varied and less expensive for families. We are changing the way people buy and consume food by allowing them to buy products when they want to use them, which reduces food waste and reduces the impacts on the environment.” But is the reduction of food waste and environmental impact really at the heart of Amazon’s concerns?
Many are doubtful. Even though Amazon is known to adhere to the Paris agreement on climate change, it does not seem ready to lead by example in the fight against global warming and pollution. According to the latest report from Greenpeace USA, it actually lags behind other American technology companies. And those aren’t models of virtue either. Greenpeace is also critical of Amazon’s delay in terms of traceability, design and transparency. Amazon does not reveal any statistics on the recycling of its products or its share of renewable energy. As for its production line, it consumes a lot of electricity. As Greenpeace USA member Gary Cook points out, “tech companies want to be at the forefront of innovation, but their production lines are still stuck in the industrial revolution.”
It’s hard to picture a bright future under these circumstances.