As the COVID-19 virus continues to spread in the U.S. and the measures to contain it become more drastic and more strictly enforced, consumers are understandably worried. According to the data in PYMNTS' COVID-19 Brief series, which surveys a little more than 2,000 consumers on their experiences with life on lockdown, the people are worried. Habits have shifted, mostly because they’ve had to, and shopping in physical spaces for anything but groceries has ground to a halt. eCommerce is picking up some of the slack, especially among more affluent spenders, but low-income consumers haven’t so much relocated their spend as ceased it completely in the face of uncertainty.
In short, times are uncertain – and a bit dark. But, as the data show, there is also good news – or at least consumers believe there is a light at the end of the tunnel. Among those surveyed for our most recent study, a strong majority – 60 percent – believe life will likely return to normal within the next three months.
That means the majority believes better days are on the way – but there is still the challenge of navigating the sup-optimal today. It’s a challenge that, over the last week, Amazon and Walmart have both been striving to meet, as they seek to even out the present while preparing for an eventual return to normalcy.
Big News of the Week: Removing the Burden from Sellers
As Amazon has limited its warehouse shelf space for items that don’t fall into one of six essential categories, Amazon sellers nationwide have been preparing for the worst. This week, however, those sellers got some good news in the form of an announcement that Amazon would temporarily not require sellers in its marketplace to repay loans it had made to them.
Amazon Lending, a program that distributes loans to marketplace sellers, will pause payments starting this week through April 30. Sellers will not accrue interest on their loans – which can range from $1,000 and $750,000 – during that time period.
“Loan repayments will restart on May 1, 2020 ... You will have the same number of remaining payments once repayment resumes,” Amazon said in a seller message obtained by Reuters.
The pause on payments will affect roughly 20,000 merchants that have gotten loans from Amazon. As of the end of last year, Amazon reported that it has lent out around $863 million to sellers, on loans that range from three to 12 months in length and carry an interest rate between 6 percent and 19.9 percent.
Unsurprisingly, the news has been incredibly popular with merchants. Jamison Philippi, a New Jersey-based seller of toys and video games on the marketplace, told Reuters that his income could take as much as a 75 percent hit over the course of this crisis, making the roughly $3,500 loan payment due to Amazon on April 1 a major source of concern.
“That’s super awesome. I cheered when I got that email. That relieves a lot of stress right now,” Philippi noted.
And sellers’ stress isn’t the only variety of stress Amazon is going after right now – it is also looking to alleviate buyers’ worries.
Battle of the Week: The Ongoing War on Price Gougers
The tales of epic acts of price gouging in the face of the COVID-19 epidemic have become the stuff of legend. There were the individuals who cleared entire regions of all the toilet paper and hand sanitizer within a 50-square-mile radius, and then set off for the Amazon marketplace in search of riches netted through marking up the price on their stockpile of goods.
The price gouging complaints, as expected, followed swiftly.
Which has left Amazon battling back – the company announced this week that it had taken down over 500,000 offers and put a hold on over 3,900 U.S. selling accounts for going against its fair pricing rules.
The eCommerce giant further noted that it has created a whole new team tasked with finding and eliminating “unfairly priced” high-demand items like hand sanitizer and protective masks.
“We are also proactively sharing information with state attorneys general and federal regulators about sellers we suspect have engaged in egregious price gouging of products related to the COVID-19 crisis,” Amazon noted in a statement. “We strongly support legislative efforts to ensure unreasonably excessive price increases are illegal during this and other national crises.”
This week’s efforts follow last week’s, which saw Amazon take down over one million products related to the coronavirus that it deemed to have spurious claims.
Dharmesh Mehta, Amazon’s vice president of worldwide customer trust, said there were tens of thousands of other items aiming to price-gouge shoppers and that the situation is “rapidly evolving.” He stated that the firm is remaining alert against frauds of all shapes and sizes, which have been on the rise since the start of the outbreak.
Build Out of the Week: Gearing up for the Grocery Delivery Rush
As socially quarantining Americans are looking to avoid crowded places, they are becoming increasingly open to the idea of ordering their groceries online for delivery. In response to the big bump-up in demand, Amazon is beefing up its delivery capacity and pick-up options for its Amazon Fresh grocery service and Whole Foods Markets, in an effort to make it easier to get food and other supplies into consumers' homes without having to physically enter a store.
According to a blog post, the company is focusing on opening up more delivery slots to meet increased demand, and keeping high-demand items on the shelves and available to the largest number of customers.
“We are working around the clock with suppliers to get the items we know customers need back in stock as quickly as possible, and are temporarily prioritizing pantry, household staples and other high-demand products,” Amazon wrote in a blog post earlier this week. “In order to serve more customers, we are limiting the purchase quantities of high-demand items.”
Amazon also noted that it would prioritize pantry items, household staples and other high-demand items for its grocery stores and grocery delivery services, mirroring the current policy of its main eCommerce website.
Big Play of the Week: Robust Relief Efforts
Last week, Walmart announced that it would give $550 million in employee bonuses to help combat the economic shortfall that cut hours and social distancing have created for its massive workforce. This week, those relief efforts expanded outward – to the merchants who run mini-shops in Walmart locations and the sellers who stock their shelves.
According to reports, Walmart will waive the rent for the roughly 10,000 businesses that operate from within Walmart Supercenters and Sam’s Club locations, according to CNBC. Those businesses include hair and nail salons, restaurant franchises, optometrists, veterinary services, banking services and more. All of them will be allowed to skip paying rent for the month of April.
In a statement, Walmart noted that its goal is to help the companies get through the viral pandemic and continue to pay their employees. There is also the possibility that Walmart could extend the rent forgiveness program depending on how the situation unfolds.
Walmart is also looking to speed up payments to some suppliers through its supply chain financing system, in an effort to make it easier for vendors to apply to the program. Over two-thirds of the company’s suppliers are small to medium-sized businesses (SMBs) that could use the help, Walmart said in a statement, and will need the relief to be quickly delivered over the next few weeks.
And, for all those employees displaced from their jobs temporarily, the retailer also has a suggestion: Have they considered working at Walmart?
Build-Up of the Week: Walmart Ramps up Hiring
As consumers are surging into stores in search of essential household items, Walmart has already brought on 25,000 new workers and provided thousands with offers in the inaugural week of a hiring drive aimed at keeping its shelves stocked and its checkouts manned during the COVID-19 crisis.
To keep the new hires coming, the company has further streamlined its hiring process, taking it from a two-week, end-to-end experience to a quick process that has the employee ready to start within three hours.
For now, written job offers and formal in-person interviews are on hold, deemed too time-consuming.
“We’re seeing a surge in applications,” Dan Bartlett, executive vice president of corporate affairs, told the news outlet. “The stores are able to engage directly at the ground level.”
Applicants include college and high-school students, as well as those who have lost their hotel and restaurant positions.
All in, Walmart is looking to bulk up its workforce by about 150,000 – and, according to Bartlett, they are also working double-time to tighten up a lot of operations, beyond hiring.
The retailer has also slightly rebalanced its supply chain as it deals with increased demand for toilet paper, food and other everyday products, Bartlett noted.
Walmart, like Amazon, has also begun limiting the purchases of some of those products in certain locations, to help ensure that all consumers can get what they need.
It is certainly not the same as every consumer getting what they want, since PYMNTS data strongly indicates that what consumers want is for things to return to normal. We imagine that Walmart and Amazon feel the same – they’d much rather be trying to outrun each other than a global pandemic.
But the race is what it is – as we’re all optimistically hopeful that “normal” will resume soon.