REPORT BACK ON MEETING Friday September 16 2016

“Amazon: the Company We All Love..” with Mark Hemming, site General Manager at Amazon’s Fulfillment Centre, Rugeley, Staffs

I confess I’m not sure how to react to Mark’s own comment following his appearance at High Peak Business Club: “Thank you for letting me join the group on Friday. I found it really interesting to network the members and was really pleased with the interest and enthusiasm shown by all.It is always good to see you command to the room too, a skill which would serve many leaders well if blessed with your talent!”

Still we’ve now celebrated our second anniversary, so we must be doing something right.That’s true for Amazon too.  We all love Amazon. Oh yes, we do. The UK is now Amazon’s third biggest market (after the USA and Germany) with a £6bn turnover, doubled since 2010. While High Street retailers struggle and shopping centres decay, true Brits are shopping as never before, tapping on their tablets at home.

Business Club members were never going to make the mistake of critics, of assuming that the operation should be taxed on turnover. We all understand the point made by Seattle founder Jeff Bezos back in 1995, when he warned investors that it would make losses for many years. But no-one at the recent breakfast meeting of High Peak Business Club asked about tax; they were more interested in the logistics of shifting millions of parcels to a demanding public.

Mark, a Black Country man, came to Amazon after 20 years in the automotive industry. Worldwide, Amazon has 268,900 “Amazonians” (employees); this year alone, Rugeley has created over 600 permanent jobs.  It’s one of the 10 fulfillment centres round the UK, soon to be 12 with one huge operation about to open at Manchester Airport.

With over 300 million active accounts, the surprise information was that 49% are third party sellers. Sure enough, two were sitting in the room, the young McIlvanney brothers Tom and James, in the smart clothes they sell from the Ensor Trading Estate in New Mills. Amazon is behind the growth of many such small businesses in the UK, leading to £1.4bn of exports and supporting an estimated 74,000 jobs. Perhaps the more hostile commentators should remember that.

The core principles and ethos have not changed since Bezos started selling books. Mark illustrated this with what happened last 23rd December at Rugeley, whence several hundred thousand parcels were shipped to arrive for Christmas. At midnight only two were left. “It wasn’t a question of whether they would get there on time, but which of us would deliver them,” Mark said. One manager volunteered, set out at 6am, collected his wife, then posted a selfie on the doorstep of the delighted customer. “He’d even remembered to put a Christmas sweater on,” laughed Mark. Breathtaking.

The next question is how quickly they will be able to deliver in future. “Not so long ago we were wondering whether we could do next-day delivery,” Mark pointed out, but now it’s guaranteed with Prime. A test showed that in Birmingham the fastest is 43 minutes. Soon they’ll be offering a 2-hour free delivery in many cities, and within 1 hour for a fee. They’re in active negotiation with the Civil Aviation Authority about drones, but they’ve been trailing the service since November  – see YouTube with Jeremy Clarkson 

But they’re far bigger than parcels. You’ll be using Amazon cloud computing if you are a big operator  with peaks in demand – the Universities Clearing House UCAS, for example, mad busy for only a few weeks a year, or a train or airline company during a crisis. And they’ve been experimenting with voice control; newly launched in the UK is the “Echo” device, with an “assistant” called Alexa. In the US already 3 million have been sold and they’re expecting 10 million in 2017. You speak and she responds (an old man’s dream, says my husband). Be careful what you wish for out loud, or it could be winging its way to you shortly…

One question from club members was about excess packaging. Since many Marketplace sellers are dealing from their garages, it can prove beyond the control of Amazon, but I can testify that they respond promptly to complaints. Many sellers send their stuff to Amazon Centres, where it’s all scanned in 3D by ‘Cubiscan’ which works out which packaging is best. Most is still picked and packed by hand, though one wonders how long that will continue – John Lewis’ warehouses are semi-automated already. “People continue to be the heart of what we do,” said Mark.

On cue as he finished speaking and the bacon buns appeared, a black winking drone whizzed above the 18th green of Chapel Golf Club. Not Amazon’s yet, but courtesy of of Digital Aviation, specialist UAV Drone operators based in Prestwich, showing us what they can do – a real glimpse of the future. The photo above shows us emerging onto the balcony to admire, and you can watch us all in the video below:

Thank you, Anne and Bruce Torrance.

Amazon are happy to welcome visitors to the Rugeley site; just get in touch with Mark Hemming there.