文章 星期四 4th 10 月 2018

All out attack is Amazon’s best form of defence

Amazon’s move to raise their employees minimum wage to $15 per hour is a strategic masterstroke.

On the face of it, the motivation is to redress simmering concerns over employee pay and conditions – and this move certainly addresses that criticism head on.

But in making such a bold and public shift Amazon have catapulted themselves into the role of national champion, simultaneously starting to campaign to raise federal minimum wages too.

The genius of this move is that it throws a gauntlet down to the other mass employers to follow suit – and they are almost universally less well placed to do so.

As an example Walmart’s average profit per employee in the US is roughly $12,000 compared to Amazon’s $25,000 per annum. In raising minimum wages Amazon is estimated to see a $2 per hour or $4,000 p.a. wage increase on average. For Walmart to follow suit would almost certainly cost far more than $2/hr and would therefore hugely undermine profitability.

So this move reinforces Amazon’s proposition to talent and at the same time puts substantial pressure on mainstream retail rivals – restricting their ability to compete still further.

Of course if it were not for Amazon’s ability to cross-subsidise their retail business with the hugely lucrative AWS business unit then they would be far less able to make such a bold move.

It seems that Amazon have turned what may have been an Achilles heel into a major source of competitive advantage – a masterstroke.

主要联系人

James George

James George

Partner

建议性文章

查看所有文章

星期四 13th 2 月 2025

甜蜜即时达:OC&C联合饿了么发布情人节即时零售白皮书

情人节即时零售市场蕴含着巨大的潜力,无论是消费者的多元需求,还是品牌商家的发展机遇,都值得深入挖掘和把握。随着市场的不断发展和消费者需求的进一步升级,即时零售有望在情人节市场创造更多惊喜,推动浪漫经济迈向新高度
阅读文章

星期一 6th 1 月 2025

Investing Strategically in Price, Promotions and Loyalty

Retailers face immense pressure to compete aggressively on price, lock in customers through attractive loyalty benefits, and trade the business hard through promotions. Billions...
阅读文章

星期三 27th 11 月 2024

10 Golden Rules for Digital Marketing Success

In an increasingly competitive and oversaturated digital market, brands must focus on creating a winning digital marketing strategy to stand out from the crowd. Here,...
阅读文章

星期二 30th 5 月 2023

Next Generation Operating Models

Brands continue to find themselves under pressure from all directions. Cost inflation, staff shortages, and ever-changing customer needs are all contributing to margin compression,...
阅读文章