Press "Enter" to skip to content

How Amazon is remaking Whole Foods in its own image

Whole Foods has a new inventory-management system aimed at making
stores more efficient and cutting down on food waste. And
employees say the retailer’s method of ensuring compliance is
crushing morale.

The new system, called order-to-shelf, or OTS, has a strict set
of procedures for purchasing, displaying, and storing products on
store shelves and in back rooms. To make sure stores comply,
Whole Foods relies on “scorecards” that evaluate everything from
the accuracy of signage to the proper recording of theft, or
“shrink.”

What Happened?: What happens when an online retail giant like Amazon buys a non-conventional grocery store chain like Whole Foods? According to some Whole Foods employees, tears and chaos. Amazon has implemented a new stocking system to improve the efficiency of storing and displaying food. The system involves penalties for placing an item in the wrong place on a shelf as well as scorecards to gauge the effectiveness of each employee.

What Employees Are Saying: According to Whole Foods employees, the new stocking system is “punitive” and employees are crying and quitting in droves because the system is not intuitive and they risk being penalized for minor mistakes.

What Amazon Says: Amazon claims the stocking system that existed before was too localized and inefficient. Instead of allowing each store manager to control the inventory choices and ordering, the corporate headquarters is calling most of the shots now when it comes to an individual store’s inventory.

Amazon Distribution Controversies: This isn’t the first time Amazon has come under fire for its stocking practices. The Internet juggernaut runs distribution centers nationwide and has the process of stocking and distributing items down to a science. A computerized system guides the entire process at distribution centers, which even Jeff Bezos himself has said are tough places to work.

Employees at Amazon’s distribution centers report high turnover, shortened breaks, punitive practices and low morale. Most recently, Amazon has made headlines for patenting a new system that would give each distribution center employee a watch or wristband that would track where the employee is on the floor and which items they have touched. It would also give them haptic feedback, much like a smart phone, to guide their hands to the correct item on the shelf. The patent proposal has raised concerns about employee surveillance.

Why It Matters: Whole Foods is the first brick and mortar business Amazon has acquired. There has been much speculation about how a company known for distribution would run a retail environment like a grocery store. In addition to showing how Amazon’s policies translate to real-world storefronts, this new stocking system provides a glimpse at the future of retail. As brick and mortar stores continue to close and file bankruptcy under the crushing weight of online retailers, the policies Amazon uses with Whole Foods will likely guide how brick and mortar businesses function in the digital age.

More About The Scorecards: How Whole Foods uses ‘scorecards’ to punish employees – Business Insider