Shoppers are avoiding brick-and-mortar stores over coronavirus fears but business is booming at Amazon — so much so, that deliveries are overwhelmed by demand and have experienced a slowdown.
Bottled water is one of the items in huge demand, Bloomberg reported. This is straining the patience of Amazon Flex drivers, who make deliveries in their own vehicles. Water adds hundreds of pounds to their vehicles and is more difficult to deliver than small packages.
The world’s largest online retailer has warned customers to expect delays in Prime Now and Fresh delivery services, a person familiar with the matter told Bloomberg anonymously.
Amazon hasn’t cut down on the number of its drivers or trucks, the person said.
Subscribers pay monthly or annual dues in exchange for free or discounted delivery on certain items with Prime Now. Some products that can be found in a convenience store are delivered in an hour. Amazon Fresh is a grocery delivery service available to Prime members.
Volumes were abnormally high on Monday in Seattle, headquarters for Amazon. Gig-economy drivers rushed to serve customers who had placed grocery delivery orders in a coronavirus-driven spree, Benjamin Romano reported for the Seattle Times.
“This was definitely the weekend where you can tell that all of Seattle was freaking out,” said one driver who transports passengers, groceries and packages around the region for Uber, Lyft, Instacart and Amazon.
As the coronavirus outbreak intensifies in the U.S., more people may look to e-commerce for help, according to analysts and survey data.
“Delivery might be much better than going to a store, both for society and for individuals,” Karan Girotra, a professor of operations and technology at Cornell University, told the Seattle Times. “But it means that delivery workers will be at the front line of this challenge.”
Coresight Research polled 1,121 internet users in late February. More than 27 percent of respondents said they were already avoiding public places such as shopping centers and entertainment venues. If the outbreak gets worse, 58 percent said they would do so.
That should be good news for e-commerce companies but not necessarily for their suppliers and drivers, said Tom Forte, an analyst and managing director at investment firm D.A. Davidson.
“The challenge for Amazon, for GrubHub, for everyone is what if your workforce gets sick?” Forte said.
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Contract workers who handle a large and growing share of deliveries are not like the traditional workforce. They don’t get health-insurance benefits or paid sick days. Drivers sometimes have to be in contact with customers, checking identification or getting a signature.
“E-commerce companies “have less control if a lot more people are going to start buying online (and) they need to ramp up their capacity,” Girotra said.
Most of products in short supply — over-the-counter meds, hand sanitizers, disinfectants and anti-bacterial sprays — appear to be a result of panicked shopping rather than actual supply constraints. However, Gorotra warned that panicked buying and hoarding can kick-start a cycle that leads to real supply limitations.
