Editor's Note: The views expressed here are that of the reporter and do not necessarily reflect editorial positions of Retail Dive.
Welcome to 1.2 million square feet of your worst nightmare.
We're in a massive Amazon facility, perhaps around a half mile long on its longest side. These fulfillment centers can be larger than 28 football fields in size, a promotional video from the company tells us before our tour. There's more than 100 of them worldwide.
This one, in Jeffersonville, IN, represents the bowels of Amazon's domestic apparel business.
That business happens to be growing at an explosive rate. Amazon's apparel sales could double in the next two years, topping $85 billion by 2020, according to Women's Wear Daily.
Morgan Stanley analysts found that the share of consumers who said they purchased apparel from Amazon in the past six months had jumped 10% year over year in 2017, to 69%, according to an October report. The increase was more than any other company covered by the analysts.
Another study, this one by CPC Strategy, found that more than half (52%) of apparel shoppers who bought clothing online in the last six months said they shopped at Amazon. And Coresight Research found that Amazon is taking apparel share from, among others, Macy's, long one of the top apparel sellers.
Whether they acknowledge it or not, the operations at Amazon's Indiana warehouse represent a direct threat to the business of scores of retailers, big and small, national and regional.
In early March, I took a tour of the Indiana warehouse to get a look at those operations in person.
Making Amazon run
This isn't exactly an inside scoop. Amazon regularly invites the public inside fulfillment centers as part of its public relations efforts, which are often as efficient and effective as its warehouses.
I was part of a tour of a couple dozen interested folks, two of whom said they were sellers on Amazon's Marketplace, the massive third-party retail platform. When our guide, Andre, asked how many of our group were Prime members, most hands went up.
The group gathered first in a holding room, where we watched the sponsored video — a throwback to the bright-eyed industrial films of the 1950s, though slicker and more colorful — and where, prior to that, Alexa played the Lumineers and other pop music. (Andre had some trouble getting Alexa to stop playing the music, prompting laughs and suggestions from the tour group that Alexa just felt like rocking out.)
But it was the world outside the holding room we were all interested in. We wanted to see the guts of this mushrooming business. As Amazon's own video put it: "Fulfillment centers make Amazon run."
Nothing about the warehouse seemed incidental or extemporaneous. And no opportunity was wasted to grab employees' attention and direct them to critical Amazonian matters. Even in the men's room, on a poster above the urinal, the company pulled out important dates, events and issues, like the upcoming Daylight Savings time transition, parking lot safety and progress on the company's safety goals.
Side note: Posters and whiteboards measuring progress on team goals were ubiquitous, found in every corner of the facility.
The warehouse, all 1 million-plus square feet of it — 95% of which is dedicated to apparel — is laid out in silver, yellow and black. It has direction signals for walkers painted in red and green. Massive fan turbines that look like helicopter blades circulate air. I'd share pictures, but cameras were not allowed and we were asked to keep our cell phones in our pockets.
With miles of tracks and shoots winding around the facility, in constant motion — amounting to a never-ending stream of boxes and packages — the place looked like a massive, elaborate version of the old board game Mouse Trap.
The sheer sprawl of the place, and the volume of stuff it processes, is mind-boggling. It houses 200,000 pairs of shoes, stacked across some four levels of storage space. One day in 2016, the facility shipped more than 60 million products in a day — 740 items a second, our guide told us. It spits out 4,000 to 5,000 cardboard boxes worth of waste each day (which gets recycled through a third party contractor).
This is all to say, again, the place is big.
As the tour processional continued and group members dropped behind to inspect some curiosity, it started to feel like a tour of Willy Wonka's factory.
Death to 'variance'
Amazon automates as much as it can, and is always looking to automate more of its operations. According to Quartz, the company has 100,000 Kiva fulfillment robots deployed in its warehouses, which can reduce order-to-ship time from up to 75 minutes to 15. (Andre told us he was excited to see drone delivery come online, adding that Prime Air's engineers were hard at work to make it happen.)
In "slam lines," scanning machines capture dimensions, weight and other product info and send it back to the company's servers while also producing package labels and removing packages that present discrepancies.
From an outsider's view, the inner workings look orderly and efficient. Efficient they might be, but they are not necessarily orderly. As some have pointed out, the warehouses actually make use of randomness to make them yet more efficient at filling orders. For example, Mary-Patton Davis, who works on operations and strategy for work-tracking app Asana, pointed out in a LinkedIn essay that Amazon's system "assigns products across the warehouse based on forecasting of order frequency." She adds, "This creates diversity across all stow areas and reduces potential for bottlenecks."
You can see that in the layout of the warehouse, where a box of pens might be stacked in a bucket next to a small tote bag, which sits in a bucket next to a pair of jeans, which sits next to a baby jumper, and so on…
Reading the signage written for employees, I find that one of the great enemies lurking within an Amazon fulfillment warehouse is something called "variance." Along with exhortations and tips to remove variance from the company's operations and inventory, there is a "Top 5 Issues" board in a main throughway for employees that lists problems, such as out-of-date license plates in the parking lot, under the heading "variance" and solutions as "target conditions."
The word choice stood out to me. Once I translated for myself, it seemed like, in the world outside the warehouse, "variance" is where things tend to get interesting.
Will the future be fun?
On walking into the center, Amazon tells its employees, in massive letters, to "work hard. have fun. make history [sic]."
If the latter of those imperatives sounds grand, the middle sounds at least as ambitious. The work itself does not lend itself well to enjoyment. Perhaps Amazon has cracked the code in making warehouse work "fun." However, some journalists and employees have found fulfillment work at Amazon to be not only not fun, but grueling, dystopian, "Hunger Games"-like and potentially dangerous.
If nothing else, "fun" could be more aspirational than descriptive. An obsessive effort to remove all "variance" from a warehousing and e-commerce fulfillment operation just doesn't seem like fun, though I suppose it could be, to a certain type. (The Jeff Bezos type?)
Whatever the type, I am not it, and I have to doubt most people are.
Years before Amazon came to dominate all things e-commerce — back when it was still mostly an online bookstore — I took a job in a book warehouse.
The warehouse, in mid-Missouri, supplied textbooks to campus stores around the country and fulfilled online orders for one of the top brick-and-mortar bookstores, back when there was more than one.
I had come to the position from retail — Blockbuster Video, to be specific. Remember when that was a thing? The higher wages — by at least 30% — of the warehouse job lured me away from Blockbuster.
After not even two weeks in the warehouse, I quit. It's easy to explain why: The work was dreary. Horribly, wretchedly dreary. And it was lonely. And impossibly monotonous. I was far more an extension of my computerized scanner that spat out my next task than the other way around.
It seems obvious now, but I honestly thought I would like working in the warehouse. I loved books, and I thought I would love working around books. But simply being around a product I liked wasn't very interesting when I couldn't talk to customers about them.
I sheepishly asked for my Blockbuster job back, and stayed for another four years. I eventually understood that I loved retail work. Sort of. In a way. Sometimes.
Days when I could make a customer's evening by conjuring the title of a movie, perhaps one that I hadn't even seen yet, based on a vague description of one of the lesser costars, simply because I had spent so much time straightening the shelves and studying the 1,000-plus page movie catalog on the floor — that was a good feeling.
We talked to our customers. We knew about their tastes in music and food, their semesters at college, their untrustworthy children and their divorces (because even Blockbuster accounts could become battlegrounds). Our favorite customers loaned us books and we loaned them movies that weren't on the floor. None of this was recorded by a computer. There was no possible way you could automate it.
The end effect of e-commerce growth is to shift more retail jobs from stores to warehouses, and to replace your neighborhood workers with algorithms. And maybe that's fine. The world has also done away with top hatters and steam train stokers, and no one seems to mind. But for all retailers, it's worth pausing and thinking about what that means, for your business and the communities you operate in.
Our Blockbuster store was noisy, chaotic, stressful and messy, no matter how often we straightened and swept. But, very often, it was also fun as hell.