Online shopping pushes retailers to ‘flex’ time
Second in a series on the growth of on-demand retail delivery
In the heart of an isolated Pittsburgh industrial park, beside a little-used highway and an expanse of urban prairie, global retail giants are going head to head.
From a single building in an industrial park in Fairywood, both Amazon and Walmart are targeting the steep, challenging streets of Pittsburgh in a war for the future of online retail and package delivery — a world where anything can be bought online and delivered at any time.
In part, the task boils down to a
workforce dilemma: how to recruit, retain and manage employees along the supply chain to respond to real-time demand for products.
The two giant retailers have taken different approaches, but the sell to workers is the same: more flexibility, better hours and technology.
Since 2015, Amazon has been here testing its Amazon Flex delivery service — in which people in their own cars deliver packages from the Fairywood fulfillment center.
Walmart, under pressure from Amazon, also has been adjusting its staffing and delivery techniques — and bringing technology onto the brick-and-mortar sales floor in ways it never has before.
Taken together, the moves by the two companies could signal big changes for the future of retail jobs — and a workforce that numbers roughly 125,000 people in the Pittsburgh metro area.
New skills, clearer path
Online shopping, aside from eating away at sales at brick-and-mortar stores, has pressured retailers to change their relationship with their employees to survive. With unemployment falling and the retail workforce in high demand, companies have voluntarily raised their minimum wages and started offering better benefits to lure and retain workers.
One way to lure workers is to offer a clearer path within one company. Last year, Walmart, the nation’s largest private employer with 1.2 million workers, rolled out a job training initiative on a scale not seen in recent memory.
Technology isn’t replacing the company’s brickand-mortar stores in this case, but it is helping in teaching the staff to manage them better.
At about 200 regional training centers that it is building across the country, Walmart is using a suite of company-developed apps to manage inventory, schedules and other store operations, as well as using virtual reality scenarios to immerse its trainees in sticky situations.
“What do you guys think about that counter presentation?” Tony Soltis, store manager at the Walmart Supercenter in Harrison, asked a classroom of department managers recently who were in their fifth and final week of training.
The screen showed a video feed from a Walmart store on Black Friday last year — a chaotic scene that a trainee was viewing through a virtual reality headset. A child runs wildly down an aisle. A woman argues with an associate. A police officer stands alert in a sea of shoppers.
One employee described a sales counter in the scene. “It’s a cluttered mess.”
“What kind of takeaways would you have when you go back to your own store?” Mr. Soltis asked.
“Clean as you go,” the employee responded.
At the 3,500-square-foot addition to the Harrison store that houses the Pittsburgh region’s Walmart Academy, as many as 90 employees can shuffle through in a week.
In all, the region has 27 Walmart stores with 8,200 employees. Walmart believes that immersive experiences and carrying tablets on the sales floor make operations more efficient for employees and customers — and make its stores more competitive with online shopping.
Employees said the changes help give more people training and offer a clear career path within the company. Mr. Soltis, along with other officials teaching new skills, started with Walmart and worked their way up.
“If your people feel important and empowered, generally you’re not going to have a lot of problems with turnover,” said Mike Lang, the Walmart trainee who wore the VR headset. Mr. Lang has 30 years of experience managing restaurants such as TGI Fridays and Primanti Bros.
Loosening schedules
Retailers also are balancing between giving more full-time hours to employees who need a stable income while keeping part-time shifts for people who have varying schedules. While that has always been true in the industry, it’s even more challenging with a shrinking pool of potential employees and competition from app-based jobs.
“You’re pulling from the same talent pool as all the other stores locally are,” said Jeff Robertson, a Walmart trainee who has 20 years of retail experience with Kmart, managing stores in three locations. “Corporations are moving away from full time. It was more about part-time associates — more associates, more flexibility. To put all that together is difficult.”
Walmart has been trying to do both.
For the holiday shopping season — when demand surges — it is offering its employees more hours instead of hiring crowds of seasonal workers. It rolled out a “customer-first scheduling” system, which allows employees to tell managers what hours they are consistently available to work each week. Walmart reported a 14 percent decline in turnover using the new system.
A study released in October found many retailers are facing a talent shortage, as workers want shorter workweeks and flexible shifts about twice as much as in any other industry.
In some cases, workers are heading to the gig economy, as online platforms like Uber and TaskRabbit provide an opportunity to earn supplemental income precisely when individual workers want to work, said Evan Armstrong, vice president of government affairs for the Retail Industry Leaders Association, a Virginiabased trade group that released the study.
Meanwhile, federal labor regulations restrict retailers from using such an app or on-demand scheduling system, Mr. Armstrong said, and it doesn’t look like that will change anytime soon.
Being your own boss?
The need for flexibility has been a weak spot for traditional retailers — and a point of attack for Amazon.
Amazon Flex allows anyone with a vehicle — after passing a background check and certain basic vehicle requirements — to make $18 an hour, plus tips from customers, by delivering packages from places like the Fairywood fulfillment center.
Interviews with drivers across the country — as well as posts on the 21,000-member Amazon Flex Drivers’ Facebook page — show the ups and downs of the work.
Through an app, drivers can select time blocks when Amazon needs deliveries, usually spanning two to four hours at a time. It’s a competitive process, and, depending on demand, sometimes there is not work when people need it.
Drivers are forced to hit refresh to update available blocks and get another shift. It lacks the promise of upward mobility offered by being classified an employee.
“It’s impossible for you to get 40 hours all week, every week,” said Abby Lyons, who drives for Amazon Flex in Indianapolis, in addition to working as a nanny. While she enjoys the work, “The expectations they put on independent contractors are kind of outrageous.”
In interviews and on Facebook, drivers complained that Amazon provides little training on how best to deliver packages. And unlike ride-hailing, in which drivers are knocked off the app if they receive a low average rating from riders, they said Amazon can terminate drivers for vague reasons.
A company spokesman said Amazon Flex is part of the company’s “all-theabove” approach to delivery to meet demand for its products, which includes using FedEx, UPS and independent local couriers.
The future is likely to need workers in both brick-and-mortar stores and out on the roads.
Or as Mr. Soltis told trainees at the Walmart site in Harrison recently: “Set the expectation ahead of time. Let your associates know what’s expected of them, and they’ll deliver.”