Tag: Shopping and Retail

Posted on by

Virus Cases Rise, but Hazard Pay for Retail Workers Doesn’t

With coronavirus cases rising across the country, retailers are preparing for another rush from shoppers worried about new lockdowns and pandemic shortages.

But many retail workers, heralded as heroes during the first wave of the pandemic, are not being provided with the same level of bonuses and raises this time, even as the health risks for them increase. Even as some companies have announced new hazard pay in recent days, some industry observers say many retailers are not sharing enough of the profits they have earned during the pandemic with their workers, but are instead benefiting shareholders through stock buybacks.

Amazon, which said last month that its quarterly profit had increased nearly 200 percent, ended its $2-an-hour pay raise for workers earlier this year and then provided a pandemic-related bonus in June, but a spokeswoman said no new hazard pay was planned.

Walmart, which reported another big increase in quarterly sales on Tuesday, had paid a series of special cash bonuses, but the company has not raised wages broadly as a way to reward workers during the pandemic.

The grocery chain Kroger offered raises at the start of the pandemic and bonuses through mid-June, but those have ended. Employees nationwide have staged protests outside stores asking Kroger to reinstate the pay, especially given its booming business — sales are soaring, and it recently said its 2021 business results “will be higher than we would have expected prior to the Covid-19 pandemic.” This week, the company told workers that they would receive discounts at its fuel centers and a $100 store credit as a “holiday appreciation.”

On Wednesday, Lowe’s said in its quarterly earnings report that it had already paid more than $800 million in pandemic-related benefits to employees. At the same time, the company said it expected to buy back about $3 billion of its own stock in the fourth quarter, after spending about $1 billion on buybacks and dividends in the third quarter.

“We ask workers with the least to sacrifice the most, and they are not even getting compensated in return,” said Molly Kinder, a fellow at the Brookings Institution, who is preparing a report that ranks which largest retailers have been most generous to their workers during the pandemic. “The companies have the money to do this.”

Image
Credit…Andrew Spear for The New York Times

The issue of hazard pay for retail workers reflects the harsh reality of the pandemic economy — a case of shifting supply and demand. In March and April, when retailers were overrun with customers and workers were calling in sick or quitting, the companies needed to give incentives to employees to stay on the job.

But when the additional unemployment benefits, totaling $600 a week, expired at the end of July, many more Americans needed jobs, making it easier for retailers to attract and retain workers.

The public attention has also waned, as news media accounts of workers getting sick from the virus faded and focus turned to protests over police violence and the election. “The headlines have moved on,” Ms. Kinder said.

But the risks to retail workers have not. As the number of new infections hits daily records, retail workers must spend hours inside, dealing with customers who may refuse to wear masks or wear them incorrectly. A large part of this burden has fallen on female, Black and Hispanic employees, who make up a sizable proportion of retail workers.

The United Food and Commercial Workers International Union, which represents nearly one million grocery workers, said that 108 of its grocery workers had died as a result of Covid-19 and that more than 16,300 had been infected or exposed to the virus.

Some leaders in government have tried to step in and compensate retail workers for the risks they are taking. But efforts to include hazard pay for frontline workers in the various rounds of federal stimulus bills have all failed, including a proposal from Senator Mitt Romney, a Utah Republican.

Image

Credit…Charlotte Kesl for The New York Times

Calling it “Patriot Pay,” Mr. Romney had proposed that essential workers receive raises of up to $12 an hour from May through July. That was meant to make up for any difference between what workers would earn on the job and what they were receiving in additional unemployment assistance. Mr. Romney’s proposal was never approved, and Congress remains at a stalemate over a new round of stimulus.

There may be other issues preventing retailers from continuing to offer pandemic pay raises. Even temporary raises, ostensibly limited to the extraordinary circumstances of 2020, can set expectations for higher pay permanently. Some analysts say retailers opt for bonuses instead of raises because they can be given out at random and do not normalize higher pay.

But a few big retailer have increased wages. Best Buy, which offered “appreciation pay” to hourly frontline workers starting in March, raised its starting rate for U.S. employees to $15 an hour on Aug. 2, the day after the additional pay was set to end.

Home Depot said on Tuesday that it would transition from paying a temporary weekly bonus to associates in stores and warehouses to permanently increasing wages for its hourly frontline workers. It’s not clear how generous those raises will prove for each worker. The company, which noted that average wages varied across the country, said it would invest $1 billion on the raises on an annualized basis.

The momentum behind higher pay in the retail industry appears to have picked up during the pandemic. Unions representing retail workers say they feel emboldened to push for significant pay increases as they enter various contract negotiations over the coming year, bolstered by what they see as the shopping public’s new appreciation for low-wage workers.

Image

Credit…Jim Wilson/The New York Times

In Florida, where President Trump won this month, more than 60 percent of voters supported a measure that will raise the state’s minimum wage to $15 an hour from $8.56 by 2026. And multiple polls conducted during the pandemic show growing support among Democrats and Republicans to raise the minimum wage.

Pay bumps tied to the pandemic have been relatively modest, but raising wages a few dollars an hour can amount to a large increase in a retail worker’s take-home pay. Kroger gave a $2-an-hour pay raise from the end of March to mid-May and gave employees a bonus of $150 or $300, based on their part- or full-time status. In May, it offered a separate bonus of $200 or $400.

Ollie’s Bargain Outlet, a roughly 370-store discount chain that has seen its sales and earnings boom, said on a recent earnings call that it stopped its “premium pay” of $1.50 an hour for frontline associates at the end of the second quarter and would replace it with some type of monthly “discretionary bonus.”

Absent federal action, some states have allocated funds that they received as part of the giant stimulus package, known as the CARES Act, to frontline workers.

In Vermont, retailers are invited to apply for state grants that can benefit their workers who have stayed on the job during the pandemic. Companies like CVS and Shaw’s, a regional grocery chain, have signed up for the grants, according to the state. The employers pass the money through to the workers, acting only as conduits.

But some retailers — wary of being perceived as accepting aid in place of struggling businesses — have blocked their workers from accessing the money, baffling state lawmakers.

Image

Credit…Andrew Spear for The New York Times

Tim Ashe, president of the Vermont Senate, who proposed the grants, said it meant many local workers would go without a substantial check — totaling as much as $2,000.

“Imagine being told by your manager that corporate won’t fill out the paperwork that could get you $2,000,” Mr. Ashe said.

Dollar General, which reported $1 billion in operating profit in the second quarter, is one retailer that is turning down the state’s offer to compensate its employees for working through the pandemic. Mr. Ashe said the state official overseeing the program had told him that Dollar General “seemed completely uninterested.”

A company spokeswoman initially said Dollar General would not apply for the grants because “we believe these limited funds should support the small-business community,” but then said on Wednesday that the company was looking to apply.

Dollar General said on Tuesday that it had spent $73 million on employee bonuses and planned to spend an additional $100 million this year, twice what it had initially planned.

“To demonstrate our ongoing gratitude and support for our employees directly serving our customers and communities during this pandemic, we are proud to double our initial plans for second-half bonuses,” Dollar General’s chief executive, Todd Vasos, said in a statement.

By comparison, Dollar General spent $602 million repurchasing its stock in the second quarter and has authorized the purchase of an additional $2 billion in stock.

Walmart, which operates six stores in Vermont employing hundreds of workers, had originally declined to apply for the grants. Like Dollar General, Walmart initially told Vermont officials that the money should go to smaller businesses. But on Tuesday, a Walmart spokeswoman said the company had changed its mind.

Image

Credit…William Widmer for The New York Times

“After further discussions with local and state officials, we’re pleased to hear there was sufficient funding to provide bonuses to all small and medium-sized businesses in Vermont and that there are remaining funds for employees of larger companies,” the spokeswoman said.

In total, Walmart has spent $1.1 billion on bonuses rewarding its employees who worked during the pandemic. Full-time workers have received a series of three cash payments of up to $300 each. Walmart paid workers a bonus in September related to store performance, but has not indicated whether any additional bonuses related to the pandemic would be granted.

Read More

Posted on by

To Survive the Pandemic, Savile Row Cuts a Bespoke Strategy

LONDON — One morning in early November, a tailor on Savile Row took the measurements of a client 5,500 miles away with the help of a robot. The tailor, Dario Carnera, sat on the second floor of Huntsman, one of the street’s most venerable houses, and used the trackpad on his laptop to guide the robot around a client who stood before mirrors in a clothing store in Seoul. Mr. Carnera was visible and audible to the client through an iPad-like panel that doubled as the robot’s face.

“I’m just going to come a little bit forward,” said Mr. Carnera, moving the robot a few feet to the left.

He was collecting the roughly 20 measurements that are standard in a first Savile Row fitting, the initial step in the fabrication of a made-from-scratch suit that starts at about $8,000 and can reach as high as $40,000 for the priciest material.

“Twenty seven and a quarter,” said an assistant in Seoul, through a translator, holding a measuring tape.

This system, up and running since September, wouldn’t work without a pair of living, trained hands on the client. As robots go, Huntsman’s is primitive — essentially a camera and intercom on wheels. It doesn’t have arms, let alone the fingertips to find an inseam. The point of the gizmo isn’t to eliminate the need for the human touch. It’s to eliminate the need for Mr. Carnera to travel, which, because of the pandemic, he can’t.

This grounding is a fiasco for Savile Row tailors. They typically spend nearly as much time flying around the world, fitting clients, as they do cutting and sewing. For many houses, 70 percent of revenue comes from these overseas trunk shows. With tailors stuck in their shops, and London tourism in free-fall, the most famous men’s clothing street in the world is gasping for life.

“Our company lived through the Boer War, World War I, the Depression, World War II, recessions,” said Simon Cundey, the managing director of Henry Poole & Co., which traces its roots to 1819. “But through all of these crises, we could visit our customers and they could visit us. This is a tragedy on a different scale.”

Image
Credit…Tom Jamieson for The New York Times

The struggles started before the pandemic. The decades-long drift from formal wear has wounded a retail strip known for elegant, hand-sewn garments that take up to 90 hours to produce. Plus, the cultural cachet of the suit has waned. All Savile Row shops are associated with a Hollywood star who was a regular: Fred Astaire at Anderson & Sheppard, Charlie Chaplin at Gieves & Hawkes. Most died decades ago.

Covid has turned the Row’s challenges into a brush with the abyss. Even dandies are now trundling around their homes in Lululemon. The four months of business between the first and second lockdowns helped, but not a lot. Profit-sapping quarantines meant that tailors still could not fly to other European countries, Asia and the United States, as they typically do three or four times a year.

American Anglophiles are the street’s not-so-secret sugar daddies. New York, Los Angeles, and a few other U.S. cities account for roughly one third of all revenue on the Row, managing directors here say.

Fortunately, the biggest landlord on the street has pockets deep enough to afford some rent forbearance. Most of the Row is owned by one of the richest entities on earth: Norway’s $1.1 trillion sovereign wealth fund. It owns a majority of the Pollen Estate, a holder of prime acres of central London real estate for nearly 400 years.

The overseers of the fund know that if the celebrated houses of Savile Row close or scatter for cheaper premises, the street’s cachet will disappear, along with much of its value. This gives tailors here a rare kind of leverage. Which may be one reason there’s a lot of we’re-in-this-together talk from Julian Stocks, a Pollen Estate property director.

“The fund family are actually very long-term thinkers,” he said. “It’s not about that slightly American approach of ‘make a quick buck and move on.’ It’s all about sustainable growth and value over the long term.”

How long this generosity will last is a major preoccupation for owners and employees here. So is the broader question of whether the street can shake off its image as a fusty redoubt of old-school haberdashery. Many of the nearly 30 shops are attempting an update. Some are opening or expanding online shops that offer ready-to-wear lines. Others are selling bespoke doctor’s scrubs and pandemic masks. A few are experimenting with Zoom. So far, only Huntsman has built a robot.

“I was skeptical when I first heard the idea,” Mr. Carnera said. “I’m very traditional. I work with a pair of shears that are about a hundred years old. But the bottom line is that we had to do something.”

The “golden mile of men’s tailoring” is actually just over 150 yards long. Starting in the early 19th century, it was the unofficial couturier of the British Empire, the place where England’s military leaders, equestrians, barristers and aristocrats bought ceremonial finery for parades, hunts, dinners and coronations. Both the tuxedo and the bowler hat were invented here, and when the suit emerged as the uniform of capitalism, the street set the gold standard for craft and durability. Its history and reputation are stellar enough that the name has found its way into at least one language. The Japanese word for “business suit” is sebiro. (Say it out loud.)

Suits made here don’t simply fit in ways that feel uncanny. They are intended to perform the sartorial version of plastic surgery, fixing imperfections like pigeon chests, splayed feet, uneven arms, humpbacks and more. It’s a goal that can’t be achieved through math alone. A fitting on Savile Row is a handsy tango that lasts anywhere from 20 minutes to an hour, and there are three fittings in all. As tailors measure, they take notes, mental or otherwise, on physical quirks that no tape could capture.

The ability to meld numbers and observations is what is known in the trade as “Rock of Eye.” For years, Rock of Eye was assumed to be possible only when tailor and client were in the same room. Now, in the age of the coronavirus, Mr. Carnera thinks otherwise.

“He’s got a dropped left shoulder and a slight bow to his legs — quite erect posture,” he said of the customer in Seoul when the fitting ended. “I can see all I need to see.”

Other tailors are dipping a tentative toe into the online world. Kathryn Sargent, the first woman to rise to the title of master tailor, was recently cajoled into her first Zoom fitting by a husband and wife in Manhattan who were tired of waiting for their clothing.

“I was reluctant because a fitting is quite intimate, and I didn’t know if I could create that feeling on Zoom,” she said from her new shop on nearby Brook Street. “But they told me, ‘Kathryn, you need to lower your standards.’”

Image

Credit…Tom Jamieson for The New York Times

Phoebe Gormley, who co-owns the first bespoke, women-only shop on the Row, Gormley & Gamble, won’t be conferring with her clients over the internet. The degree of difficulty is too high.

“Men are more straight up and down, with or without beer bellies,” she said. Instead, she has sold tens of thousands of dollars worth of pandemic masks, some from leftover shirt fabric, and, more ambitiously, is prepping a new, socially distanced venture — an online store called Form Tailoring by Gormley & Gamble.

“Completely Covid-proof,” she said.

Richard Anderson, owner of a shop that bears his name, stuck to an in-person approach to sales in the months between lockdowns. He had designed a trio of casual blazers, and one afternoon, before he had to close his doors again, he modeled them in a mirror. They were identical in cut — one button, peak lapels, slightly padded shoulders — and sold in wool, suede and leather. The leather version was a shade of shiny, riotous red rarely seen on anything but fire trucks or Michael Jackson.

“We’ll put it in the window and it brings them in,” he said, eyeing himself in the leather. “We’ve done something similar before. A peacoat in an orange billiard cloth. No one bought it in the orange, but we put in the window and people bought it in blue and green.”

Set in the upscale Mayfair neighborhood in Central London, Savile Row is a three-minute walk from Regent Street, one of the busiest shopping boulevards in Europe. Somehow it still feels separate and secluded, like a private club you might miss unless someone pointed out the entrance. It’s a by-appointment destination that doesn’t get a lot of foot traffic. Customers range from royals to mobsters, plus plenty of financiers.

“I had this one customer, young guy, whose father brought him in,” Mr. Carnera said. “He insisted I make an inside pocket for his joints.”

Raised in southeast London, Mr. Carnera skipped college to start an apprenticeship at Anderson & Sheppard that lasted for three and a half years. During that time, he worked solely on jackets, though his duties also included sweeping the floor, making tea and enduring practical jokes, like being sent on errands to buy button holes.

He later learned the art of cutting patterns, which are made from pieces of brown paper that provide the blueprint of every garment. Unlike made-to-measure clothing, which starts with a jacket that a customer tries on and is then tweaked, bespoke begins with the customer’s own contours. Every house on Savile Row keeps its paper patterns, thousands of them, usually strung on a line. At a glance they look like animal pelts.

“This one is Gregory Peck’s,” said Mr. Carnera, after rummaging through a closet at the rear of Huntsman where patterns are kept in chronological order.

Savile Row is known for producing one-button jackets with roped shoulders that give men a slightly squared off look, a vestige of the street’s military roots. Every house, though, has its own aesthetic. Dege & Skinner cuts its trouser narrowly and makes wider-than-usual lapels. Owners of a suit made by Huntsman — jacket cut long and close to the chest, an equestrian silhouette — are said to nod in recognition when they encounter each other.

Image

Credit…Tom Jamieson for The New York Times

Most of the august, old houses are clustered on the “sunny side of the street,” namely the east. Many of the buildings opposite were constructed after World War II. Members of the Third Reich were once a source of income, but when the hostilities began, the street wasn’t spared. A few of the many bombs dropped on London during the Blitz landed on Savile Row.

Since then, successive generations of tailors have trickled in, each offering a jolt of the new. Like Edward Sexton, who showed up with his business partner, Tommy Nutter, in 1969. At the time, most houses kept their storefronts partially covered with drab fabric and speaking to the media was not cricket. If you had to ask what was behind those decorous scrims, you were encouraged to just move along. Mr. Sexton shocked the street by putting dazzling jackets in the window and attracted rock star clients. Three of the Beatles on the cover of Abbey Road are wearing suits he designed.

“Paul was the most conservative,” Mr. Sexton said. “John was more quirky.”

He sat one morning in late October in his newly opened store at 36 Savile Row, wearing an aqua blue, three-piece suit that was about 20 decibels louder than his voice, which registered just above a whisper. He’d worked for the last few decades out of a studio in Knightsbridge, and sounded somewhat ambivalent about returning to the street that launched him.

“It’s asleep now, and not because of Covid,” he said. “When I was here earlier with Tommy, it was really buzzing. There was an intelligence — the tailors spoke to each other, and they spoke tailoring. Today, there’s no sense of the needle in these places. They’re just showcases for brands.”

It doesn’t help that five storefronts are now vacant, just enough to make the place seem like it’s in distress. Pre-pandemic rents were high, demand for suits declined and Brexit hurt, too.

Image

Credit…Tom Jamieson for The New York Times

“Things were already starting to unravel before Brexit,” said Ozwald Boateng, one of a handful of “new bespoke movement” tailors who opened shops in the 1990s and early 2000s. “All of that international traffic that was coming through London, well, it’s going somewhere else now.”

Tailors with a “sense of the needle” aren’t necessarily in a hurry to open on Savile Row. Ms. Sargent knows the street is her natural milieu, but she gets along well with her current landlord on Brook Street and isn’t expecting a bargain if she moves back to the place where she learned the craft.

“It’s evolution, not revolution, on Savile Row,” she said. “It’s just been really expensive, and I can’t take on the added costs now.”

Some combination of high overhead and poor strategic choices have defeated some boldfaced names in fashion here. Lanvin and Alexander McQueen opened stores on the Row that have since closed. Pillars of the community have folded, too. Kilgour, French & Stanbury, which made the suit Cary Grant wore in “North by Northwest,” was acquired years ago by a Chinese investment company and closed in March, citing “challenging trading conditions.” (A pop-up shop on the Row is planned for December.) Hardy Amies, which opened in 1945 and designed costumes for Stanley Kubrick’s “2001: A Space Odyssey” as well as frocks for Queen Elizabeth, closed last year.

The space is now occupied by the flagship of Hackett, a company that is a relative whippersnapper at 37 years old. It started elsewhere in London and has dozens of stores around the United Kingdom and Europe.

In other words, it has some trappings of a brand showcase.

Huntsman seems an improbable site for high-tech innovation. The second floor has a bar, a dart board and huge ancient ledgers with handwritten notes in elegant script. They look like props for a film adaptation of a Dickens novel. Actually, they are the in-house accounting books. There are entries for dukes, earls and many pages devoted to Queen Victoria, whose purchases included “2 Striped waistcoats with sleeves” and “5 pairs Western Angolan trousers.”

The robot idea sprang from the ever-churning mind of Pierre Lagrange, a long-haired 58-year-old Belgian hedge fund manager who acquired the company in 2013. Part nerd, part swashbuckling capitalist, Mr. Lagrange rides a Harley and exults during an interview about the pink, wide-wale corduroy jacket he owns. (“Everybody says it’s amazing.”) He’s been pushing Huntsman to expand its audience and offerings, bolstering its website and opening a Huntsman satellite in a Manhattan apartment that once belonged to Tony Bennett.

When Covid shut down retail in March, he brainstormed with a manager and started thinking about physicians who perform remote-controlled surgery. If a robot can work on a kidney, he figured, why not a suit?

Image

Credit…Tom Jamieson for The New York Times

“I’ve always been a proponent of using tech in ways that let people focus on what they’re really good at,” he said, “whether that’s a hedge fund or in tailoring.”

The company had six robots built and christened all of them “Mr. Hammick,” a tribute to Colin Hammick, Huntsman’s much-revered and now-deceased head tailor. Five Mr. Hammicks are now in the United States and Asia. They are assembled in places convenient to customers, like their homes, by employees who live in the same country.

To date, the Hammick brigade has yet to produce a finished suit. But even before that proof-of-concept moment arrives, Mr. Lagrange is optimistic. Suits made on the Row for overseas customers take about a year from start to finish, largely because all three fittings require a visit, and those are spaced a few months apart. By relying on Mr. Hammick instead of planes, the whole process will take five months.

“I don’t know how fast we would have gotten here without Covid,” said Mr. Lagrange, of the machines. “Sometimes you need a crisis.”

Some traditionalists here will be put off by what the mother of invention has wrought at Huntsman. Then there’s Mr. Stocks, the agent of the Pollen Estate, who is a fan of any innovation that adds vitality to the Row and keeps its character intact.

“Let’s face it, 10 years ago we’d be sitting here in suits,” he said, after settling into a chair in the spacious tearoom in the rear of J.P. Hackett, where we met for a pre-lockdown interview. “But the world’s moved on and we need to make sure that Savile Row moves with it. Because if you don’t, you’re dead.”

A few years ago, Pollen hired a PR firm for the Row. It has also pushed for improvements to the streetscape. The current priority is keeping tenants afloat. Many did not pay rent during the first lockdown and the estate is now speaking to all tailors about further support during lockdown number two. During the four months stores were open in the summer and fall, discounted rents were paid, and some paid no rent at all.

Plenty of managing directors here give the estate high marks for the way it has dealt with them during the pandemic and for the tenor of negotiations about rents in the near future. Others are less impressed. Life on the Row, they say, has been far too expensive for too long.

“My understanding is that they are now willing to talk and find solutions,” said Mr. Boateng of the Pollen Estate. “That’s good to hear, but given the number of empty stores here, the survival of the street is at stake. Some real, radical rethinking of approach is needed.”

The estate has extra motivation to keep mainstay tenants in situ. With historic preservation in mind, the local government imposed a singular restriction on some properties on the Row: If a space has been zoned for in-store tailoring, it can be rented only to shops with in-store tailors. Pollen couldn’t fill a vacancy with a Zara or a Topshop if it were so inclined.

Which it is not. Mr. Stocks acknowledges that this tailors-only policy hands tactical advantage to some tenants. But it also prevents the five other landlords that own properties on the Row from letting to chain stores that would make the place generic.

This is not merely a hypothetical. Eight years ago, Abercrombie & Fitch opened a kid’s store in an unrestricted retail space. This was especially appalling to many because the building had once been home to Apple Corps, the Beatles’ multimedia company. In 1969, when the band couldn’t figure out where to play the show that became its last, instruments were hauled upstairs and the group played on the roof.

Before Abercrombie opened its doors, a group of dapper protesters, organized by a magazine called The Chap, gathered outside the space holding placards that read, in a nod to John Lennon, “Give Three Piece a Chance.” The store opened anyway and has since closed.

Image

Credit…Tom Jamieson for The New York Times

Mr. Stocks is engineering more palatable additions. A bespoke shoemaker, Gaziano & Girling, moved in last year. A coffee shop called the Service opened in July, the first of its kind here. A made-to-measure shop for women, the Deck, debuted last moth.

“And we’d like to add the best leather goods, the best shirts, a watchmaker, male grooming,” he went on. “Make it a sort of bastion of men’s luxury — which it always has been, but in a broader, 21st-century sense.”

All of the Pollen Estate’s space on Savile Row is spoken for, so newcomers will move into the estate’s holdings nearby, on Old Burlington Street and Clifford Street. As it happens, one of Mr. Stocks’ newest tenants opened there in September, and he was eager to show it off.

Thom Sweeney, as the store is called, is a four-story townhouse with a spiffy new barbershop in the basement and two floors of clothing. The top floor has a full bar, leather sofas, a hearth filled with lit candles and a television playing a Sean Connery-era James Bond film.

To Mr. Stocks, this is the new model of hip, immersive retail — one he’d like shoppers to include in their image of Savile Row. The owners of Thom Sweeney, on the other hand, are happy to have a good 20 yards between them and the more famous street.

“We didn’t look at it,” said one of the owners, Thom Whiddett, about Savile Row. “We wouldn’t fit in there. The street has amazing tailors, but we didn’t want to pigeonhole ourselves.”

The idea was to open near enough to the Row to benefit from its prestige without getting saddled with its drawbacks. A number of tailors, on and off the street, lament the intimidation factor that keeps customers away. James Sleater of the nervily named Cad and the Dandy on Savile Row likened shopping on the street to beckoning a sommelier at a Michelin-starred restaurant. It could end up costing you so much you might not be inclined to do it. In a break with tradition, Cad puts prices on its website.

“Even if you can afford an Aston Martin,” Mr. Sleater said, “you want to know how much it’s going to cost you.”

Cad’s fondness for reinvention extends to online fittings. They have gone well enough for Mr. Sleater to call them “another string to our bow.”

Across the street, Ozwald Boateng sat in the office in his store and talked about lining up his first Zoom consultation. The prospect irked him. Last year, he unveiled his debut collection for women in a show at Harlem’s Apollo Theater, which he titled A.I. The name was a feint. The initials stood for “authentic identity.”

“I was really fed up with algorithms running our lives,” he said. “So I flipped the meaning. I was trying to say, ‘Keep your truth, keep your identity.’”

Eight months into the pandemic he’s realized that, like it or not, technology is the only end run for Covid-19 — and perhaps the only way his company can survive.

“The algorithms got me!” he said, laughing, with a hint of resignation. “Even here, the digital world has won.”

Read More

Posted on by

Amazon Faces E.U. Antitrust Charges

LONDON — European Union regulators brought antitrust charges against Amazon on Tuesday, saying the online retail giant broke competition laws by unfairly using its size and access to data to harm smaller merchants who rely on the company to reach customers.

The European Commission, the executive branch of the 27-nation bloc, said Amazon had abused its dual role as both a retail store used by scores of vendors, and a merchant that sells its own competing goods on the platform. The authorities accused Amazon of harvesting nonpublic data from sellers who use its marketplace to spot popular products, then copy and sell them, often at a lower price.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Margrethe Vestager, the commission’s vice president for digital issues, said in a statement. “Data on the activity of third party sellers should not be used to the benefit of Amazon when it act as a competitor to these sellers.”

The case, which has been expected for months, is the latest front in a trans-Atlantic regulatory push against Amazon, Apple, Facebook and Google as the authorities in the United States and Europe take a more skeptical view of their business practices and dominance of the digital economy. Last month, the Justice Department brought antitrust charges against Google, and Apple and Facebook are also facing investigations in both Washington and Brussels.

Many in Europe will be watching to see how the Amazon announcement is received by the incoming administration of President-elect Joseph R. Biden Jr., who is expected to pursue policies that limit the industry’s power. The Trump administration has criticized Ms. Vestager for aiming at American companies like Apple, even as it initiated its own investigations of the industry.

In the Amazon case, the announcement on Tuesday is still preliminary and is just one part of the regulatory process. Amazon now has a chance to respond to the charges. It can take many months, or even years, before a fine and other penalties are announced. The commission also could reach a settlement with Amazon, or the case could be dropped.

The European Commission said it has also started a parallel investigation of Amazon policies around its “buy box,” an important piece of real estate on Amazon’s website that makes it easy for consumers to quickly click to make a purchase.

Image
Credit…Olivier Hoslet/Agence France-Presse, via Pool/Afp Via Getty Images

The commission is studying whether Amazon gives preferential treatment for the buy box to its own products and those of other sellers that pay to use Amazon’s logistics services.

Amazon denied any wrongdoing and said it supports thousands of businesses in Europe.

In Brussels, Amazon has been gearing up for a legal fight. It has hired a team of lawyers and economists, including several who in the past were encouraging tougher enforcement against Google and Microsoft.

“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts,” the company said in a statement. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”

The case reinforces the European Union’s role as a leading tech-industry watchdog, even as past investigations of companies like Google have done little to diminish their power. Authorities in Brussels have argued that the biggest tech platforms unfairly use their power to box out competitors, though means like bundling products, charging high fees in app stores and hoarding data.

Ms. Vestager has raised alarms about the “gatekeeper” role of companies like Amazon, Apple, Facebook and Google. The companies have reached such a size, Ms. Vestager has argued, that they are essentially micro-economies, setting rules and policies with little transparency that determine the fate of millions of other businesses that have no choice but to follow along.

About 2.3 million third-party merchants around the world use Amazon to reach customers, including about 37 percent who rely on the company as their sole source of income, according to a United States congressional report published last month. In the European Union, Amazon has information on about 800,000 active sellers using its platform, covering more than 1 billion products, according to the European Commission.

Ms. Vestager has warned the biggest companies will only grow stronger without tougher antitrust enforcement and new regulations, blocking new companies and innovations from emerging.

Next month, the European Commission is expected to unveil a new package of laws that would represent one of the world’s most sweeping set of regulations of the tech industry. It could include rules prohibiting the self-preferencing of products and requiring the biggest companies to share data with smaller rivals.

In the Amazon case, European authorities spent two years investigating the company’s dual role as both a retail store and seller of its own goods.

Amazon argues that it only makes up a small sliver of the global retail market, but for many smaller merchants the company is the main gateway to online sales. Worries about Amazon’s power have only grown during the pandemic, as internet sales become increasingly vital to businesses grappling with lockdowns and lost foot traffic. Since 2015, e-commerce sales in the European Union nearly doubled to about 720 billon euros, or about $850 billion.

Sellers have long raised concerns that if Amazon sees a particular product doing well on its website, the company would create its own version, sell it at a lower price and then give it better placement on the Amazon website.

The European Commission said those concerns were supported by a review of data on more than 80 million transactions and 100 million products. Ms. Vestager said it showed how Amazon used the data from outside sellers to determine what computer accessories, kitchen tools or other products to introduce, as well as where to set prices and how to manage the inventory.

The real-time information Amazon collects includes order totals, number of visitors to certain products and a merchant’s revenue.

“This is a case about big data,” said Ms. Vestager. She said the investigation centers on Amazon’s behavior in France and Germany, where she said Amazon has a “dominant” position in the market.

Critics of Amazon cheered the European decision.

“Amazon, by using its very powerful position on e-commerce markets and its dual role as both retailer and marketplace, is making it more difficult for independent retailers to compete fairly,” said Agustin Reyna, director of legal and economic affairs at the European Consumer Organization, a group that has been urging regulators to act against Amazon.

Monika Pronczuk contributed reporting from Brussels.

Posted on by

Jobs Report Shows Gains but Vulnerability to New Coronavirus Surge

The American economy continues to heal from the devastating effects of the first wave of the coronavirus pandemic last spring, but a new wave of cases threatens prospects for sustained growth.

The Labor Department reported Friday that employers added 638,000 jobs in October, a figure that would have been larger without a drop in temporary census workers.

But the engines behind much of the gain — bars and restaurants, which added 192,000 jobs, and retailing, which picked up 104,000 — represent some of the jobs most at risk from a resurgence in coronavirus cases.

Public health experts have linked a return to indoor dining and drinking establishments with increased cases of Covid-19, and those businesses face renewed restrictions as the outbreak worsens. Cooler temperatures are already curtailing outdoor dining, a lifeline for restaurants in many parts of the country.

Similarly, if apprehensive consumers stay away from shopping centers, retail hiring could be curtailed as the year-end shopping season approaches.

Job openings have been weaker than expected as retailers gear up for the holidays, according to Daniel Zhao, senior economist at the jobs site Glassdoor. “This could point to more muted spending and hiring,” he said. And despite the recent gains, employment in the leisure and hospitality sector and among retailers is well below levels that prevailed before the pandemic.

Still, there was a notable bright spot in the October report: the unemployment rate fell to 6.9 percent from 7.9 percent.

“It’s better than expected, but we’re starting to see headwinds,” Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago, said of the report. “The drop in the unemployment rate is welcome news, but there are still over 11 million unemployed workers.”


Unemployment rate



By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics

After strong gains in the third quarter, the pace of economic growth has eased as federal relief measures enacted at the pandemic’s onset have begun to expire. Prospects of another round of aid have faded with Democrats and Republicans at odds over the size of the package.

The Labor Department report also underscored the uneven nature of the pandemic-induced recession and subsequent recovery, in which low-wage employees have fared far worse than more highly skilled workers.

In October, the unemployment rate for high school graduates stood at 8.1 percent, while joblessness among college graduates was 4.2 percent.

“Low wage-workers have just been decimated,” Ms. Swonk said. “They are most at risk of falling into the ranks of the impoverished.”

Indeed, even as the unemployment rate has come down, joblessness for many has become more prolonged. The Labor Department said the number of long-term unemployed — those without work for 27 weeks or more — grew to 3.6 million in October, an increase of 1.2 million.


Share of unemployed who have been out of work 27 weeks or longer



By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

One-third of all unemployed workers now fall into the long-term category, the highest share since 2014. That could also spell trouble ahead, because the long-term unemployed often find it more difficult to find work again even as jobs become available.

What’s more, the government reported the number of people accepting part-time jobs because full-time work was unavailable grew by 383,000, to 6.7 million, an indication of increasing desperation.

Millions of unemployed workers have had a harder time paying bills since an emergency federal program providing $600 a week in additional benefits expired at the end of July. Another set of federal jobless benefits will last only through the end of the year.

The Economic Policy Institute, a left-leaning research group, estimates that more than 30 million workers have lost jobs or had their hours or pay reduced in the coronavirus-related downturn.

With the Senate remaining in Republican hands, as election returns suggest, any further relief will probably be more modest than the multitrillion-dollar package that seemed likely if a “blue wave” had given Democrats control of Congress and the White House. As a result, Carl Tannenbaum, chief economist at Northern Trust in Chicago, has cut his estimate of growth next year by a full percentage point.

“The good news is that the U.S. job market is healing,” Mr. Tannenbaum said. “But full recuperation may take awhile.”

Unemployed Americans are gradually returning to the job market, with the labor force growing by 724,000 in October. The employment-population ratio, the share of adults who are working, rose to 57.4 percent from 56.6 percent in September — though it was still far short of the 61.2 percent recorded a year earlier.

Nicole Zappone of Naugatuck, Conn., is one of the lucky ones, after having returned to work in August following a harrowing six months of unemployment.

Image
Credit…Christopher Capozziello for The New York Times

“It was the worst part of my life,” said Ms. Zappone, 30, who took to reading novels by James Patterson and Michael Connelly to get through each day’s lonely hours. “I’ve been working since I was 14, and this was the first time I was laid off. And it was hard to comprehend.”

In years past, she had worked in a consignment shop and done babysitting and dog walking. Finding work had never been hard — until now.

Indeed, when she was let go as a substitute teacher in Waterbury, Conn., in March, she had no idea how severe the impact of the virus and the ensuing lockdown would be. By summer, she was applying for job after job on Indeed.com with no response.

“I felt like a failure, even though I knew it was beyond my control,” she said. “I can’t tell you how many jobs I applied for.”

When she got a nibble from a local information technology company for a public relations job, she couldn’t believe her luck. One week after a phone interview, she was hired for a 20-hour-a-week position that she hopes will become full time. She is working from home and has been in the office only once — to sign her contract.

“I love it,” she said. “I get to use my passion for writing and talk to people from all over the country.”

For others, regaining a job has been a bigger challenge.

Jodi Jackson, 57, worked as a buyer for J.C. Penney at the company’s headquarters in Plano, Texas, until she was laid off in April 2019. She has looked for a job as a buyer at other chains, with no success. And she has considered moving into another field.

Image

Credit…Zerb Mellish for The New York Times

“I could do sales, and I’ve tried to switch, but unless you know somebody, it’s hard to get an interview,” Ms. Jackson said.

“I was born to be a buyer,” she added. “I would buy screws and nails for Home Depot at this point.”

Ms. Jackson worked for the Census Bureau for three months, but that job ended last month. “I don’t live above my means,” she said. She sold her condominium in Ann Arbor, Mich., before moving to Plano in 2019, she said, and has mostly been living off the proceeds of that sale. (She collected unemployment benefits after her J.C. Penney layoff, and may do so again based on the loss of the census job.)

She took a temporary job as a cashier at Macy’s during the holiday rush last year. “It was only $9.45 an hour, which was a fraction of what I earned at J.C. Penney,” she said. “But I wanted to work and to be around people. And retail is something I know.”

Ms. Jackson has ruled out another holiday season at Macy’s because the pay is too low. And despite the industry’s worsening problems, she hasn’t given up hope. On Wednesday, a retailer based in Plano asked her to come in for a third interview next week.

“I feel really positive,” she added. “I’m going to get a job.”

Jeanna Smialek contributed reporting.

Posted on by

Boarded-Up Windows and Increased Security: Retailers Brace for the Election

Nordstrom, the high-end department store chain, said it planned to board up some of its 350 stores and hire extra security for Election Day on Tuesday. Tiffany & Company, the luxury jeweler, said “windows of select stores in key cities will be boarded in anticipation of potential election-related activity.” Saks Fifth Avenue said it was “implementing additional security measures at certain locations in the event of civil unrest due to the current election.”

In Beverly Hills, the police said they would take a “proactive approach” and close Rodeo Drive, a renowned strip of luxury retailers, on Tuesday and Wednesday, citing the likelihood of increased “protest activity.” The police, working with private security companies, said they would also be on “full alert” throughout Beverly Hills starting on Halloween and continuing into election week.

The nation is on edge as the bitter presidential contest finally nears an end, the latest flash point in a bruising year that has included the pandemic and widespread protests over social justice. Anxiety has been mounting for months that the election’s outcome could lead to civil unrest, no matter who wins. In the retail industry, many companies are not simply concerned about possible mayhem — they are planning for it.

In a show of just how volatile the situation seems to the industry, 120 representatives from 60 retail brands attended a video conference this week hosted by the National Retail Federation, which involved training for store employees on how to de-escalate tensions among customers, including those related to the election. The trade group also hired security consultants who have prepped retailers about which locations around the country are likely to be the most volatile when the polls close.

“I am 50-plus years old and I didn’t think I would live to see this,” said Shane Fernett, who owns a contracting business in Colorado Springs and has been stocking up on plywood to board up his retail customers. “You read about this in third-world countries, not America.”

For the retail industry, 2020 has been filled with bankruptcies, store closures and plummeting sales as tens of millions of Americans struggled with job losses because of the pandemic. Protests over police violence against Black citizens sent millions of people into the streets, demonstrations that in some cases devolved into the looting and burning of stores in a number of cities. Worries about unrest around the election have been fanned by President Trump, who has declined to say whether he would agree to a peaceful transfer of power if his Democratic challenger, Joseph R. Biden Jr., is victorious.

Protests flared again this week after Walter Wallace Jr., a Black man with mental health issues who was carrying a knife, was killed by the police in Philadelphia. That set off looting and clashes with the police in parts of the city. Citing the civil unrest in Philadelphia, Walmart said on Thursday that it was removing all of its firearms and ammunition from its sales floors across the country.

Image
Credit…Victor J. Blue for The New York Times

This year, businesses have already sustained at least $1 billion in insured losses from looting and vandalism largely set off by the killing of George Floyd by a Minnesota police officer in May, according to one estimate cited by the Insurance Information Institute, an industry group.

It is on target to be the most costly period of civil unrest in history, likely surpassing damages during the 1992 riots in Los Angeles and many of the civil rights protests of the late 1960s.

Keep up with Election 2020

The situation in 2020 has drawn comparisons to protests in the 1960s, but Derek Hyra, an associate professor in the School of Public Affairs at American University, said that recent unrest had been more geographically widespread, affecting a wider swath of businesses.

“Most of the rioting and burning in the 1960s happened within the geography of low-income Black spaces,” Mr. Hyra said. “In the 2020 unrest, more of it happened in downtown and affluent areas.

“It’s not just urban America,” he added. “The protests have been in the suburbs, they’ve been in rural areas.”

Protecting properties from potential damage is not a simple decision. Retailers can risk alienating their customers by erecting plywood, particularly if the anticipated unrest does not materialize.

“You are sending a message when you do that,” Stephanie Martz, general counsel of the National Retail Federation said. “You don’t want to necessarily engage in this kind of grim forecasting.”

Some large businesses are keeping their plans vague.

Target, with about 1,900 stores, said in a statement, “like many businesses, we’re taking precautionary steps to ensure safety at our stores, including giving our store leaders guidance on how to take care of their teams.”

Image

Credit…Maggie Shannon for The New York Times

A spokesman for CVS, which operates nearly 10,000 stores, said: “Our local leadership teams are empowered to take steps that they determine will best support the safety of our stores, employees and customers. This includes the option to board select store locations.”

The training offered by the retail federation was originally meant to help workers defuse tense situations around mask wearing by advising employees to make eye contact and speak emphatically, said Ms. Martz, the group’s top lawyer.

She acknowledged that there could be added danger for workers on Tuesday night because the police are likely to be stretched thin if there are protests. “People are so divided and it is such a tinderbox,” Ms. Martz said.

It is all a stark reminder of just how tense the country’s political situation is.

“Maybe in other countries, protest and chaos is more commonly understood around the transfer of power like a presidential election or a prime minister,” said Professor Hyra of American University. But in the United States, “there has been such a clear understanding that we live in a democracy and whoever wins the Electoral College, there is a peaceful transfer of power.”

Mr. Fernett, the contractor in Colorado, said he recently purchased a two-year supply of plywood and 2-by-4 planks at the request of fretful retailers.

Image

Credit…Hiroko Masuike/The New York Times

He is taking his own precautions. He has removed the name of his business, Jack of All Trades, from his company trucks, and is requiring that his technicians work in pairs next week for their own safety.

“Our local lumber yard asked what’s going on, why such a big order,” Mr. Fernett said. “I said, we think all hell is going to break loose. That’s why we are stocking up. I hope we don’t need to use it.”

Read More

Posted on by

A Korean Store Owner. A Black Employee. A Tense Neighborhood.

The crowd was growing impatient as Crystal Holmes fumbled with the keys to the store.

Dozens of people were swarming the street around Western Beauty Supply, the Chicago shop where Ms. Holmes works. She had persuaded some of them to let her open the store so they could rob it without breaking the windows.

“She’s taking too long,” someone yelled. “Let’s go in and get it.”

Western Beauty Supply sells products like wigs, hair extensions and combs mostly to Black women. Most of the employees, like Ms. Holmes, are also Black, but the owner is a Korean-American man, Yong Sup Na.

When a few young men appeared outside the store earlier that evening in May, Mr. Na went out to speak with them. He offered some of them cash, and they walked away. At that point, Mr. Na told Ms. Holmes that he felt confident his business was safe. “They are not going to break into the store,” he told her.

A few minutes later, though, a larger group showed up. A woman snatched Mr. Na’s keys, but Ms. Holmes persuaded her to give them back. Then she ordered Mr. Na, her boss, to leave. “You don’t know what could happen,” she told him.

Even as Ms. Holmes tried to save the store from ruin that evening, when protests and looting followed the police killing of George Floyd, she understood what was causing the turmoil roiling Chicago and dozens of other cities.

“I understand where the rage is coming from,” Ms. Holmes, 40, said in an interview. “We don’t have any businesses in the community and we are getting killed by the police and killing each other, and we are just getting tired.”

In the years she has spent working for Mr. Na, customers have constantly told her that she should open her own store. But she has watched some Black women struggle as owners in the industry, and her priority has been keeping a steady job to support her family.

Outside the store, people in the crowd kept pushing for Ms. Holmes to let them in. But she couldn’t get the keys into the lock. Her hands were shaking too much.

Mr. Na, who is 65, grew up in South Korea in a home with an outhouse. He watched television by standing outside a neighbor’s window and peering in at the set. Mr. Na was in his late 20s when he arrived in the United States. He knew only one person, a friend from his village who had moved to Chicago.

Not religious but seeking to meet other immigrants, Mr. Na soon joined a Korean church. A few years later, a friend from the church bought a shoe store on Chicago’s South Side from a white man who wanted out.

“This man was upset that the Black people were moving into the neighborhood,” Mr. Na recalled in an interview. “Koreans didn’t care. This was an area that they could afford.”

Image
Credit…via Sandra Na

With no access to a bank loan, Mr. Na bought the store from his friend by using proceeds from the shoe sales. He paid $5,000 a month for 13 months. The business was straightforward.

“You were buying cheaply made goods at a low cost from a wholesaler,” Mr. Na said. “The customers were not snobby.” He also owned businesses that sold pagers, cellphones and clothing. The endeavors allowed him to pay for private school and then college for his two daughters.

Over the years, other Korean retailers told Mr. Na that beauty sales were a steady proposition, even in recessions. In 2007, he started his first beauty shop. He opened Western Beauty in 2014, on the city’s West Side, and started Modern Beauty in the South Side neighborhood of Bronzeville two years later.

The portion of the beauty industry that caters to Black women generates about $4 billion in sales a year. Much of those sales are rung up in small beauty supply stores, which are ubiquitous in predominantly Black neighborhoods. The stores seem like a natural answer to the numerous calls from policymakers and corporate America to create more Black-owned businesses after protests over systemic racism broke out this spring.

Yet fewer than 10 percent are owned by Black women, said Tiffany Gill, a history professor at Rutgers University. Instead, many of them are owned by Korean immigrants. Korean Americans also lead some of the largest wholesale distributors that import the hair products from China.

“These are two historically marginalized groups fighting over the same small slice of pie when there is so much more of the pie that neither has access to,” said Ms. Gill, the author of the book “Beauty Shop Politics: African-American Women’s Activism in the Beauty Industry.”

For years, Mr. Na worked seven days a week, from 7 a.m. to 9 p.m. His daughter Sandra, 33, remembers one night when her father didn’t come home. He had been rushed into emergency surgery to remove a shard of glass from his face after a scuffle with someone who tried to rob the store.

The Na family lived for a time in a Latino neighborhood and eventually moved to a largely white suburb north of the city. Ms. Na said her parents had insisted that she spend her summers learning Korean, working as a tutor and taking academic enrichment classes. Ms. Na and her sister, Jenny, visited the store only rarely when they were growing up and played with the register.

She said her father never talked about the “social and racial impacts” as a retailer on the South Side. Her father came from a generation that experienced poverty and hardships, Ms. Na said, and didn’t have the time to focus on much else except taking care of his family, which included sending money to his siblings back in South Korea.

As part of a younger generation faced with fewer of these pressures, Ms. Na said, she has had opportunities to think about issues of race from a different perspective.

“But everything for my dad was about survival,” Ms. Na said.

Image

Credit…Danielle Scruggs for The New York Times

Crystal Holmes grew up a world away from South Korea, in Chicago’s East Side. But like Mr. Na, she faced challenges from the start. She was raised mostly by her grandmother until she was a teenager.

“I knew I wanted better,” she said. “I always said I would never put my kids in the situation I was in.”

Ms. Holmes, a mother of two, worked for a time for a fried chicken chain, but switched to beauty supply stores when she found that many pay every week.

At the first store she worked in, the owner, a Korean man, was so impressed with her sales skills that he said he would help her open a store one day, Ms. Holmes said.

Then things soured. The owner accused her of stealing from him after he discovered the register short of cash, she said. She told him how one employee, who was also Korean, had insisted on taking turns on the register and had a gambling problem. But the owner didn’t believe her.

“I just walked out of the store,” she said. (A security tape later showed that she did not steal anything, according to Ms. Holmes.)

Many beauty supply stores have a reputation for being demeaning places for the Black women who shop in them. Ms. Holmes said she had been in numerous stores where employees followed customers or required them to check their bags at the door.

Image

Credit…Danielle Scruggs for The New York Times
Image

Credit…Danielle Scruggs for The New York Times

It’s not just small retailers. Until June, Walmart kept its Black beauty products in locked display cases. “You can’t treat everyone like a thief,” Ms. Holmes said.

Mr. Na’s stores are different, she said. Women are allowed to shop without being watched. She likes to walk the floor talking to the customers about their hair and offering them advice.

Ms. Holmes sometimes accompanies Mr. Na on trips to the wholesaler to pick up inventory. She is usually the only Black person in the warehouse. Once, she encountered another Black woman from a beauty shop in Wisconsin.

“I said, ‘What the hell are you doing here?’” Ms. Holmes recalled. “And she said, ‘What the hell are you doing here?’”

Still, there is tension. Some customers ask Ms. Holmes why she works so hard for a Korean owner. One woman said she was like a “slave.”

Ms. Holmes, who earns $14 an hour, was able to pay for three years of her son’s college tuition but could not afford his final year. Her son, now 26, plans to go back to school. But he lost his job at a downtown restaurant during the pandemic and has a baby on the way, so college may be further delayed.

Ms. Holmes also hopes her 20-year-old daughter, who has a 9-month-old son, can attend college eventually.

Mr. Na has been encouraging Ms. Holmes to start her own business one day and offering her advice on how to get started, like how much money she will need to save.

For now, Ms. Holmes appreciates the small perks of the job. How on a good day, the store can feel like a gathering place where women talk about their lives and swap beauty tips.

On many Sundays, Ms. Holmes opens and closes the store on her own. “Some customers see me by myself and say: ‘Where are the Koreans? Are they in back?’” When she explains that she runs the store on Sundays, “they are shocked,” she said.

“It’s mind-blowing to them that a Black woman is in charge.”

Image

Credit…Haruka Sakaguchi for The New York Times

Sandra Na has also wondered why Koreans dominate the sale of Black women’s hair products.

She acknowledges that Korean immigrant communities can be “insular,” and that her father, who speaks limited English, prefers to do business and associate with other Koreans because it is easier.

But other forces are also at play. Ms. Na said her father had been shaped by his parents’ experience living through the Japanese occupation of Korea and then the Korean War. That left him with a shared feeling of grief and loss, which Ms. Na said is often referred to as Han.

It helps explain, she said, why her father typically hires Korean managers in stores where most of the employees are Black.

“Han creates a level of trust among Koreans,” Ms. Na said. “That trust goes back decades.”

Since the protests, many business leaders and public figures have sought to address racial disparities with more investment. Square, the payments company led by Jack Dorsey, the billionaire founder of Twitter, has pledged $100 million to financial firms supporting Black communities. Senator Elizabeth Warren, Democrat of Massachusetts, has proposed a $7 billion federal fund for Black entrepreneurs.

But the struggles of Black women in the beauty supply industry show that some barriers to success are more complicated.

In interviews this summer, Black women who own beauty shops in Dallas, Buffalo and Sacramento said they were consistently denied accounts with major Korean-owned suppliers. One of the women said that as soon as she had sent over a copy of her driver’s license, the supplier stopped returning her calls.

These rejections, the women said, prevent them from stocking the most popular hairpieces, forcing their customers to shop elsewhere.

While Mr. Na is a retailer, not a distributor, he said he was aware of some of the challenges Black female proprietors faced in obtaining products.

He said Black owners were often unable to rent or buy stores that were physically large enough to allow them to work with the big suppliers.

“It has nothing to do with racism,” Mr. Na said. He acknowledged that if Black women gained a larger footing in the beauty supply industry they could seriously challenge Korean businesses.

“It is competition,” Mr. Na said. “Eat or be eaten.”

Image

Credit…Danielle Scruggs for The New York Times

In the end, the group didn’t wait for Ms. Holmes to let it in. The looters smashed the window and barged inside.

Mr. Na walked across the street, sat in his car and looked on as his store was ransacked.

Like many Americans, Mr. Na had watched the footage of a Minneapolis police officer kneeling on Mr. Floyd’s neck in horror. He wondered if the unrest would ever stop and whether he should bother to rebuild.

“I feel like racism is something that will never go away,” he said.

After the looting, Ms. Holmes returned to the store to clean up. Some people from the neighborhood were surprised to see her helping Mr. Na. A few customers were angry she would not let them take some of the products that had been knocked off the shelves.

“Why are you on their side?” she remembers one Black person asking her. “Why aren’t you riding with us?”

Ms. Holmes said some people were too quick to judge. “They are on the outside looking in. They don’t know the person I work for. He’s a good man.”

Image

Credit…Sandra Na

When Sandra Na drove to Chicago from Brooklyn, where she lives with her husband, she was struck by the level of destruction at Western Beauty Supply and Modern Beauty. A cash register that contained no money was smashed, the glass in the display case had been shattered, and dozens of bottles of hair solutions had been dumped on the floor.

She believes most of the looters were seizing on the chaos wrought by the protests over the killing of Mr. Floyd to steal desirable products, she said. A range of businesses across the city were destroyed that day, including pawnshops, grocery stores and Walmarts. Some of the damaged stores were Black-owned.

Ms. Holmes said she agreed that the crowd wanted only to steal merchandise from Mr. Na — not to make a statement that his store was not Black-owned.

Still, Ms. Na said she recognized that some people might begrudge small businesses like her father’s stores. “I have a hard time thinking there isn’t resentment there,” she said. “You see an outside ethnic group capitalizing on your people.”

As painful as it was to see her father’s shops destroyed, Ms. Na said she was heartened that the broader protests had spurred efforts to address systemic racism. “The attention is there,” she said.

Video

The moments when a crowd broke into Modern Beauty in Chicago.

Mr. Na was able to reopen his business with insurance money, government grants and more than $94,000 in donations from a GoFundMe page his daughters set up. In August, though, he temporarily boarded up his stores after a police shooting in Chicago set off a fresh wave of protests and looting.

Back at work, Ms. Holmes said a few customers had told her again that she should open her own store.

She’s hoping Mr. Na will help her get started. Mr. Na, who is planning to retire in the next few years, said he had been considering ways he could do so.

“One day I’ll have a store, and you come shop with me,” Ms. Holmes tells customers. “Just wait.”

Read More

Posted on by

Black Products. Black Shoppers. Black Workers. But Who Owns the Store?

The crowd was growing impatient as Crystal Holmes fumbled with the keys to the store.

Dozens of people were swarming the street around Western Beauty Supply, the Chicago shop where Ms. Holmes works. She had persuaded some of them to let her open the store so they could rob it without breaking the windows.

“She’s taking too long,” someone yelled. “Let’s go in and get it.”

Western Beauty Supply sells products like wigs, hair extensions and combs mostly to Black women. Most of the employees, like Ms. Holmes, are also Black, but the owner is a Korean-American man, Yong Sup Na.

When a few young men appeared outside the store earlier that evening in May, Mr. Na went out to speak with them. He offered some of them cash, and they walked away. At that point, Mr. Na told Ms. Holmes that he felt confident his business was safe. “They are not going to break into the store,” he told her.

A few minutes later, though, a larger group showed up. A woman snatched Mr. Na’s keys, but Ms. Holmes persuaded her to give them back. Then she ordered Mr. Na, her boss, to leave. “You don’t know what could happen,” she told him.

Even as Ms. Holmes tried to save the store from ruin that evening, when protests and looting followed the police killing of George Floyd, she understood what was causing the turmoil roiling Chicago and dozens of other cities.

“I understand where the rage is coming from,” Ms. Holmes, 40, said in an interview. “We don’t have any businesses in the community and we are getting killed by the police and killing each other, and we are just getting tired.”

In the years she has spent working for Mr. Na, customers have constantly told her that she should open her own store. But she has watched some Black women struggle as owners in the industry, and her priority has been keeping a steady job to support her family.

Outside the store, people in the crowd kept pushing for Ms. Holmes to let them in. But she couldn’t get the keys into the lock. Her hands were shaking too much.

Mr. Na, who is 65, grew up in South Korea in a home with an outhouse. He watched television by standing outside a neighbor’s window and peering in at the set. Mr. Na was in his late 20s when he arrived in the United States. He knew only one person, a friend from his village who had moved to Chicago.

Not religious but seeking to meet other immigrants, Mr. Na soon joined a Korean church. A few years later, a friend from the church bought a shoe store on Chicago’s South Side from a white man who wanted out.

“This man was upset that the Black people were moving into the neighborhood,” Mr. Na recalled in an interview. “Koreans didn’t care. This was an area that they could afford.”

Image
Credit…via Sandra Na

With no access to a bank loan, Mr. Na bought the store from his friend by using proceeds from the shoe sales. He paid $5,000 a month for 13 months. The business was straightforward.

“You were buying cheaply made goods at a low cost from a wholesaler,” Mr. Na said. “The customers were not snobby.” He also owned businesses that sold pagers, cellphones and clothing. The endeavors allowed him to pay for private school and then college for his two daughters.

Over the years, other Korean retailers told Mr. Na that beauty sales were a steady proposition, even in recessions. In 2007, he started his first beauty shop. He opened Western Beauty in 2014, on the city’s West Side, and started Modern Beauty in the South Side neighborhood of Bronzeville two years later.

The portion of the beauty industry that caters to Black women generates about $4 billion in sales a year. Much of those sales are rung up in small beauty supply stores, which are ubiquitous in predominantly Black neighborhoods. The stores seem like a natural answer to the numerous calls from policymakers and corporate America to create more Black-owned businesses after protests over systemic racism broke out this spring.

Yet fewer than 10 percent are owned by Black women, said Tiffany Gill, a history professor at Rutgers University. Instead, many of them are owned by Korean immigrants. Korean Americans also lead some of the largest wholesale distributors that import the hair products from China.

“These are two historically marginalized groups fighting over the same small slice of pie when there is so much more of the pie that neither has access to,” said Ms. Gill, the author of the book “Beauty Shop Politics: African-American Women’s Activism in the Beauty Industry.”

For years, Mr. Na worked seven days a week, from 7 a.m. to 9 p.m. His daughter Sandra, 33, remembers one night when her father didn’t come home. He had been rushed into emergency surgery to remove a shard of glass from his face after a scuffle with someone who tried to rob the store.

The Na family lived for a time in a Latino neighborhood and eventually moved to a largely white suburb north of the city. Ms. Na said her parents had insisted that she spend her summers learning Korean, working as a tutor and taking academic enrichment classes. Ms. Na and her sister, Jenny, visited the store only rarely when they were growing up and played with the register.

She said her father never talked about the “social and racial impacts” as a retailer on the South Side. Her father came from a generation that experienced poverty and hardships, Ms. Na said, and didn’t have the time to focus on much else except taking care of his family, which included sending money to his siblings back in South Korea.

As part of a younger generation faced with fewer of these pressures, Ms. Na said, she has had opportunities to think about issues of race from a different perspective.

“But everything for my dad was about survival,” Ms. Na said.

Image

Credit…Danielle Scruggs for The New York Times

Crystal Holmes grew up a world away from South Korea, in Chicago’s East Side. But like Mr. Na, she faced challenges from the start. She was raised mostly by her grandmother until she was a teenager.

“I knew I wanted better,” she said. “I always said I would never put my kids in the situation I was in.”

Ms. Holmes, a mother of two, worked for a time for a fried chicken chain, but switched to beauty supply stores when she found that many pay every week.

At the first store she worked in, the owner, a Korean man, was so impressed with her sales skills that he said he would help her open a store one day, Ms. Holmes said.

Then things soured. The owner accused her of stealing from him after he discovered the register short of cash, she said. She told him how one employee, who was also Korean, had insisted on taking turns on the register and had a gambling problem. But the owner didn’t believe her.

“I just walked out of the store,” she said. (A security tape later showed that she did not steal anything, according to Ms. Holmes.)

Many beauty supply stores have a reputation for being demeaning places for the Black women who shop in them. Ms. Holmes said she had been in numerous stores where employees followed customers or required them to check their bags at the door.

Image

Credit…Danielle Scruggs for The New York Times
Image

Credit…Danielle Scruggs for The New York Times

It’s not just small retailers. Until June, Walmart kept its Black beauty products in locked display cases. “You can’t treat everyone like a thief,” Ms. Holmes said.

Mr. Na’s stores are different, she said. Women are allowed to shop without being watched. She likes to walk the floor talking to the customers about their hair and offering them advice.

Ms. Holmes sometimes accompanies Mr. Na on trips to the wholesaler to pick up inventory. She is usually the only Black person in the warehouse. Once, she encountered another Black woman from a beauty shop in Wisconsin.

“I said, ‘What the hell are you doing here?’” Ms. Holmes recalled. “And she said, ‘What the hell are you doing here?’”

Still, there is tension. Some customers ask Ms. Holmes why she works so hard for a Korean owner. One woman said she was like a “slave.”

Ms. Holmes, who earns $14 an hour, was able to pay for three years of her son’s college tuition but could not afford his final year. Her son, now 26, plans to go back to school. But he lost his job at a downtown restaurant during the pandemic and has a baby on the way, so college may be further delayed.

Ms. Holmes also hopes her 20-year-old daughter, who has a 9-month-old son, can attend college eventually.

Mr. Na has been encouraging Ms. Holmes to start her own business one day and offering her advice on how to get started, like how much money she will need to save.

For now, Ms. Holmes appreciates the small perks of the job. How on a good day, the store can feel like a gathering place where women talk about their lives and swap beauty tips.

On many Sundays, Ms. Holmes opens and closes the store on her own. “Some customers see me by myself and say: ‘Where are the Koreans? Are they in back?’” When she explains that she runs the store on Sundays, “they are shocked,” she said.

“It’s mind-blowing to them that a Black woman is in charge.”

Image

Credit…Haruka Sakaguchi for The New York Times

Sandra Na has also wondered why Koreans dominate the sale of Black women’s hair products.

She acknowledges that Korean immigrant communities can be “insular,” and that her father, who speaks limited English, prefers to do business and associate with other Koreans because it is easier.

But other forces are also at play. Ms. Na said her father had been shaped by his parents’ experience living through the Japanese occupation of Korea and then the Korean War. That left him with a shared feeling of grief and loss, which Ms. Na said is often referred to as Han.

It helps explain, she said, why her father typically hires Korean managers in stores where most of the employees are Black.

“Han creates a level of trust among Koreans,” Ms. Na said. “That trust goes back decades.”

Since the protests, many business leaders and public figures have sought to address racial disparities with more investment. Square, the payments company led by Jack Dorsey, the billionaire founder of Twitter, has pledged $100 million to financial firms supporting Black communities. Senator Elizabeth Warren, Democrat of Massachusetts, has proposed a $7 billion federal fund for Black entrepreneurs.

But the struggles of Black women in the beauty supply industry show that some barriers to success are more complicated.

In interviews this summer, Black women who own beauty shops in Dallas, Buffalo and Sacramento said they were consistently denied accounts with major Korean-owned suppliers. One of the women said that as soon as she had sent over a copy of her driver’s license, the supplier stopped returning her calls.

These rejections, the women said, prevent them from stocking the most popular hairpieces, forcing their customers to shop elsewhere.

While Mr. Na is a retailer, not a distributor, he said he was aware of some of the challenges Black women proprietors faced in obtaining products.

He said Black owners are often unable to rent or buy stores that are physically large enough to allow them to work with the big suppliers.

“It has nothing to do with racism,” Mr. Na said. He acknowledged that if Black women gained a larger footing in the beauty supply industry they could seriously challenge Korean businesses.

“It is competition,” Mr. Na said. “Eat or be eaten.”

Image

Credit…Danielle Scruggs for The New York Times

In the end, the group didn’t wait for Ms. Holmes to let it in. The looters smashed the window and barged inside.

Mr. Na walked across the street, sat in his car and looked on as his store was ransacked.

Like many Americans, Mr. Na had watched the footage of a Minneapolis police officer kneeling on Mr. Floyd’s neck in horror. He wondered if the unrest would ever stop and whether he should bother to rebuild.

“I feel like racism is something that will never go away,” he said.

After the looting, Ms. Holmes returned to the store to clean up. Some people from the neighborhood were surprised to see her helping Mr. Na. A few customers were angry she would not let them take some of the products that had been knocked off the shelves.

“Why are you on their side?” she remembers one Black person asking her. “Why aren’t you riding with us?”

Ms. Holmes said some people were too quick to judge. “They are on the outside looking in. They don’t know the person I work for. He’s a good man.”

Image

Credit…Sandra Na

When Sandra Na drove to Chicago from Brooklyn, where she lives with her husband, she was struck by the level of destruction at Western Beauty Supply and Modern Beauty. A cash register that contained no money was smashed, the glass in the display case had been shattered, and dozens of bottles of hair solutions had been dumped on the floor.

She believes most of the looters were seizing on the chaos wrought by the protests over the killing of Mr. Floyd to steal desirable products, she said. A range of businesses across the city were destroyed that day, including pawnshops, grocery stores and Walmarts. Some of the damaged stores were Black owned.

Ms. Holmes said she agreed that the crowd wanted only to steal merchandise from Mr. Na — not to make a statement that his store was not Black owned.

Still, Ms. Na said she recognized that some people might begrudge small businesses like her father’s stores. “I have a hard time thinking there isn’t resentment there,” she said. “You see an outside ethnic group capitalizing on your people.”

As painful as it was to see her father’s shops destroyed, Ms. Na said she was heartened that the broader protests had spurred efforts to address systemic racism. “The attention is there,” she said.

Video

The moments when a crowd broke into Modern Beauty in Chicago.

Mr. Na was able to reopen his business with insurance money, government grants and more than $94,000 in donations from a GoFundMe page his daughters set up. In August, though, he temporarily boarded up his stores after a police shooting in Chicago set off a fresh wave of protests and looting.

Back at work, Ms. Holmes said a few customers had told her again that she should open her own store.

She’s hoping Mr. Na will help her get started. Mr. Na, who is planning to retire in the next few years, said he had been considering ways he could do so.

“One day I’ll have a store, and you come shop with me,” Ms. Holmes tells customers. “Just wait.”

Read More

Posted on by

Customers Still Like to Shop in Person, Even if They Get Only to the Curb

When the pandemic forced Dick’s Sporting Goods to close its hundreds of stores in March, the retailer hustled to set up curbside pickup within two days. Its initial attempt, though, was just this side of a children’s lemonade stand.

“When you drove up, there was a sign in the window with a phone number, and people used the landline to call the stores and they’d deliver it out,” Lauren Hobart, president of Dick’s, said of the “very scrappy” operation. Email and text alerts would come later.

Scrappy or not, curbside pickup not only rescued Dick’s sales during the lockdowns, it has also emerged as many retailers’ best strategy for long-term survival in the e-commerce age. And what started as a coronavirus stopgap is likely to have a permanent impact on the way people shop, along with giving them a new reason to continue to visit beleaguered physical stores.

The popularity of curbside pickup reveals that the future of retail is not just more packages piling up on people’s doorsteps. Beyond satisfying the need for contactless shopping in the pandemic, it taps into Americans’ desire to drive to a store, a pull that can be just as strong as, or even stronger than, the convenience of home delivery.

“Americans are used to their cars and actually do like stores, so this is kind of a hybrid where you’re getting the best of both worlds,” said Oliver Chen, a retail analyst at Cowen.

As of August, about three-fourths of the top 50 store-based retailers in the United States offered curbside pickup, according to Coresight Research, an advisory and research firm that specializes in retail and technology. Anything from a sweater to a book is now as easy to pick up as a sandwich.

Image
Credit…Amr Alfiky/The New York Times

Target said its curbside sales grew more than 700 percent in the last quarter, while Best Buy reported nearly $5 billion in online revenue in the second quarter, a company record, and said 41 percent of that had come from curbside or in-store pickup.

The rise in curbside pickup, part of a larger surge in e-commerce sales, has implications for preserving retail jobs, though workers’ duties are likely to transform. It is also helping to keep brick-and-mortar spaces relevant when thousands of storefronts have emptied out as more customers move online.

Curbside allows certain big-box retailers to convert their stores into mini e-commerce fulfillment centers, while avoiding the money-losing step of shipping goods to homes.

By driving to the store to pick up an online order, “the customer takes the last mile,” Mr. Chen said, referring to the typically expensive final step in package deliveries.

The rising popularity of curbside coincided with Amazon’s struggles with its vaunted supply chain and usually seamless home delivery system in the early months of the pandemic. As people rushed to place orders for everything from toilet paper to backyard swimming pools, Amazon dealt with out-of-stock items, price gouging and delayed or inaccurate shipments.

That was a boon for chains like Dick’s, Best Buy, Target and Walmart, which harnessed the merchandise in their thousands of stores to new effect especially as summer began.

“Amazon struggled a bit at the beginning like everybody did, because, boom, when the demand came, it was so great it hit the whole system and kind of overwhelmed it,” said Walter Robb, a former co-chief executive of Whole Foods and executive-in-residence at S2G Ventures, a venture fund focused on food. “Those that have been able to be agile on their feet with these digital offerings have made some gains.”

But nowhere is the shift more significant than at big-box chains that also sell groceries. The 700 percent growth in Target’s Drive Up offering has spurred the chain to add fresh and frozen groceries to the service and create up to 12 additional parking spaces for pickup at stores. It has announced plans to double the number of store employees dedicated to in-store and curbside pickup services during this holiday season. The retailer has even included product samples in orders.

Image

Credit…Amr Alfiky/The New York Times

Walmart, with about 4,700 stores in the United States, was one of the earliest chains to offer curbside pickup, with a focus on groceries. Curbside orders are part of an overall boost in its e-commerce sales, which accounted for 11 percent of the chain’s revenue in the quarter that ended July 31, up from 6 percent a year earlier.

It’s helping the retailer keep pace with Amazon online, though the gap between the two remains large. Mr. Robb noted that Amazon seemed to be expanding its own physical footprint — through its ownership of Whole Foods and a partnership with Kohl’s — to match Walmart on curbside.

The drive-up service is giving Walmart and other chains another significant advantage — the ability to make a profit on online orders, where the economics are notoriously difficult. Target has said that its order pickup and curbside services at stores cost the company about 90 percent less on average than fulfilling orders from a warehouse.

On a $100 curbside order, the labor costs of picking the groceries reduce Walmart’s profit by $1.50 while still leaving $3 in profit, estimated Edward Yruma, an e-commerce analyst at Keybanc. By comparison, Walmart loses money on its traditional e-commerce sales, in which customers order online and the products are shipped to their home, Mr. Yruma said. In its recent second-quarter-earnings report, Walmart said that it had “significantly reduced losses” in its traditional e-commerce business.

Walmart now employs 74,000 workers across more than 3,000 stores to pick groceries on orders and then take them out to customers’ cars. Five years ago, there were fewer than 1,000 of those jobs. But during the pandemic, filling those roles was a big driver behind Walmart’s hiring boom, which increased the company’s 1.5 million-person work force by 14 percent.

That is a significant number for the nation’s largest private employer, particularly at a time when the economy has been shedding jobs.

But some retailers are not hiring more employees to pack online orders — they are simply adding these tasks to the workers’ workloads without increasing their pay. In fact, many retailers have ended the raises and bonuses that workers were receiving in the early months of the pandemic, a decision labor groups have criticized because workers now face both heavier workloads and the threat of contracting the virus in the store.

Image

Credit…Amr Alfiky/The New York Times

“If you are having an increase in sales and in productivity, the workers should share in that benefit,” said Marc Perrone, president of the United Food and Commercial Workers union, representing tens of thousands of grocery store workers. “Right now, the owners of these companies are the only ones benefiting.”

Labor experts and Wall Street analysts also predict that the job of picking items off the shelf and taking them to a customers’ cars can easily be done by machines, which means that the boom in jobs may be fleeting.

Even now, that work is highly automated. Workers fulfilling curbside orders at Walmart use a hand-held device that indicates the order in which they should pick each item, for maximum efficiency.

“They can sometime feel like robots,” Mr. Perrone said.

A recent report by the Labor Center at the University of California, Berkeley, and the nonprofit Working Partnerships USA predicted that workers would come under new pressure as stores began to resemble Amazon warehouses, and noted that “stock clerks’ jobs seem destined for more radical change than any of the other major retail job categories.”

“On the store floor, they also will be more frequently prompted by ‘alerts’ to replenish stock,” the report said. “As with cashiers, this could make stocker jobs more varied and interesting, but in combination with new ways of tracking work, it also could result in jobs that are surveilled, closely watched, sped up and stressed.”

Jean-André Rougeot, chief executive of Sephora Americas, said that on a recent visit to Walmart, he saw more employees pushing carts for pickup orders than he did shoppers. He anticipates that people will return to Sephora’s stores to touch and try its beauty products, but acknowledged that the pandemic would transform how people shopped and received goods.

Image

Credit…Amr Alfiky/The New York Times

“Every grandparent in America knows how to use Zoom now because that’s how they spoke to their grandkids for the last six months, so it’s not just young people,” Mr. Rougeot said. “The whole population has become much more comfortable with technology and the ability to order things differently.

“There’s a whole group of consumers that literally discovered e-commerce during this period,” he added. “These people, because of Covid, started to do that, and I don’t think you can put the genie back in the bottle.”

Contact Sapna Maheshwari at sapna@nytimes.com and Michael Corkery at michael.corkery@nytimes.com.

Read More

Posted on by

Pasta, Wine and Inflatable Pools: How Amazon Conquered Italy in the Pandemic

NAPLES, Italy — Ludovica Tomaciello had never shopped on Amazon before being trapped at her parents’ house in March during Italy’s coronavirus lockdown. Bored one afternoon scrolling TikTok, she spotted hair scrunchies that she then tracked down and ordered on Amazon.

When the package arrived, she was hooked. She soon signed up for Amazon Prime and turned to the site to buy a tapestry and neon lights to decorate her bedroom; halter tops, jeans and magenta Air Jordan sneakers; and a remote to wirelessly take selfies for Instagram.

“My mom was like, ‘Can you stop this?’” Ms. Tomaciello, 19, who is pursuing a language degree, said while at a cafe near her home in Avellino, about 20 miles east of Naples. When stores reopened in May, Amazon remained her preferred way to shop because of the convenience, selection and prices, she said. One friend even asked her to use it to discreetly order a pregnancy test.

Image
Credit…Gianni Cipriano for The New York Times

Amazon has been one of the biggest winners in the pandemic as people in its most established markets — the United States, Germany and Britain — have flocked to it to buy everything from toilet paper to board games. What has been less noticed is that people in countries that had traditionally resisted the e-commerce giant are now also falling into its grasp after retail stores shut down for months because of the coronavirus.

The shift has been particularly pronounced in Italy, which was one of the first countries hard hit by the virus. Italians have traditionally preferred to shop in stores and pay cash. But after the government imposed Europe’s first nationwide virus lockdown, Italians began buying items online in record numbers.

Even now, as Italy has done better than most places to turn the tide on the virus and people return to stores, the behavioral shift toward e-commerce has not halted. People are using Amazon to buy staples like wine and ham, as well as web cameras, printer cartridges and fitness bands. At one point, orders of inflatable swimming pools through the site were so backlogged that some customers complained.

Image

Credit…Gianni Cipriano for The New York Times

“The change is real, the change is deep, and the change is here to stay,” said David Parma, who has conducted surveys about shifting consumer behavior in Italy for Ipsos in Milan. “Amazon is the biggest winner.”

North America is Amazon’s largest market, accounting for about two-thirds of its $245.5 billion global consumer business. But the Seattle-based company has been targeting Europe and other new markets to grow.

Amazon entered Italy in 2010; its first sale in the country was a children’s book. But the company had only muted success over the next decade. Fewer than 40 percent of Italians shopped online last year, compared with 87 percent in Britain and 79 percent in Germany, according to Eurostat, a European Union government statistics group.

Image

Credit…Gianni Cipriano for The New York Times

Amazon was hampered in Italy by a lack of widespread broadband and poor roads for delivering packages, especially in the south. Italy has the oldest population in Europe, and many people are also wary of providing their financial details online. E-commerce accounts for only 8 percent of retail spending in the country.

“There were some structural issues that we had to face,” said Mariangela Marseglia, Amazon’s country manager for Italy. “Unfortunately, our country was and still is one of those where technological understanding and tech culture is low.”

The turning point was the pandemic. Mr. Parma said 75 percent of Italians shopped online during the lockdown. Total online sales are estimated to grow 26 percent to a record 22.7 billion euros this year, according to researchers from Polytechnic University of Milan. Netcomm, an Italian retail consortium, called it a “10-year evolutionary leap,” with more than two million Italians trying e-commerce for the first time between January and May.

Hurdles remain for Amazon. Small and midsize businesses are an integral part of Italian society. They make up roughly 67 percent of the economy, excluding finance, and about 78 percent of employment, which are higher than E.U. averages, according to E.U. statistics.

In Gragnano, a hilltop town near the Amalfi Coast with a 500-year history of pasta manufacturing, Ciro Moccia, the owner of La Fabbrica della Pasta, said Amazon was a “dangerous” monopoly that could destroy businesses like his that rely on conveying the quality of a product.

Image

Credit…Gianni Cipriano for The New York Times
Image

Credit…Gianni Cipriano for The New York Times

But during the lockdown, his company had no choice but to sell on Amazon after many stores shut. Standing above the family’s factory recently, where semolina flour was mixed with spring water and pressed into 140 different pasta shapes, Mr. Moccia said, “I am very worried.”

His son, Mario, 24, who tried for years to get his father to sell more online, said he saw it as an opportunity.

“If you are not on Amazon, you don’t have the same visibility,” he said.

Amazon’s success has drawn scrutiny. Unions have also criticized Amazon’s labor practices, including staging a multiday strike in March over virus-related safety policies. Italian regulators are investigating it for price gouging during the pandemic. In 2017, Amazon agreed to pay €100 million, or roughly $118 million, to settle a government tax dispute.

Ms. Marseglia said Amazon was “a lifeline for customers” in the pandemic and provided a new way for businesses to reach people online.

Amazon has rushed to keep up with demand. It plans to open two new fulfillment centers and seven delivery stations in Italy. It also is aiming to hire roughly 1,600 more people by the end of the year, pushing its full-time work force to 8,500 from fewer than 200 in 2011.

“We are accelerating the rhythm with which we make investments and hire new people,” said Ms. Marseglia, who is originally from Puglia in southern Italy.

With unemployment about 9 percent nationwide — and closer to 20 percent in areas of southern Italy — many are eager for Amazon to expand.

Image

Credit…Gianni Cipriano for The New York Times
Image

Credit…Gianni Cipriano for The New York Times

When Francesca Gemma graduated from college in 2016, Amazon was the only company hiring in her area. She now works at an Amazon fulfillment center picking hundreds of products from the shelves every hour so the goods can be shipped to customers.

“On the first day, the muscles of my legs felt like I had done a marathon — I couldn’t climb up the stairs,” she said. “It’s not for everyone, but it’s a job.”

Ms. Gemma, who is also a representative for Cgil, a national labor union, inside the center, said orders had skyrocketed during the lockdown and remained high. But she said that besides some bonuses she received at the peak of the emergency, Amazon did not provide warehouse staff much else to share in its success.

“Nothing remained for workers,” Ms. Gemma said, adding that her work has become more monotonous because of the enforcement of the sanitary protocols.

Amazon said it paid higher-than-average wages for warehouse work.

Amazon has made an effort to win over Italians. Parents are encouraged to shop on its website through a program that can steer a percentage of their purchases to their children’s school.

Image

Credit…Gianni Cipriano for The New York Times

In Calitri, a village of 4,000 people in southern Italy, Amazon sponsored a Christmas festival last year as part of a marketing campaign to show it could reach even the most isolated areas. It paid for a Christmas tree in the town square and provided gifts to children. The mayor hoped it would lead more artisans and farmers to sell through the site.

But Luciano Capossela, a jeweler in Calitri, helped organize a protest of the Christmas festival with other shop owners, who closed their stores for the night and blacked out their windows.

He has watched as the community has embraced Amazon. One customer recently texted him a screenshot of a wristwatch for sale on Amazon, asking if Mr. Capossela could match the price. When he said the Amazon price was lower than what he could get from a distributor, the customer never replied.

Image

Credit…Gianni Cipriano for The New York Times
Image

Credit…Gianni Cipriano for The New York Times

“If we keep going this way in 10 to 15 years, we will only have Amazon and everything else will no longer exist,” Mr. Capossela said. In an area where depopulation is so bad that some property is for sale for just 1 euro, he said last year’s protest was meant as a warning: “A village with couriers and without shops.”

He pulled up a picture on his phone taken the morning after the Amazon festival. It showed that the Christmas tree had blown over in a storm.

“It was God’s will,” he said.

Posted on by

Beyond TikTok, Walmart Looks to Transform

Walmart’s planned investment in TikTok is being called “transformative.” Another analyst predicted the deal could “redefine retail” across the industry. “It is a bigger-picture opportunity,” said Oliver Chen, a retail analyst at Cowen.

Known for its homogeneous big-box stores in rural and suburban America, Walmart has turned more than a few heads with its newly announced multibillion-dollar stake in a video app that is synonymous with the fun digital lives of young people.

As in the early days of many tech investments by large corporations, the details of how Walmart will use TikTok are fuzzy. But one thing is clear: Walmart now has something that its rival Amazon does not. It can engage with consumers not just when they are buying something on the retailer’s website, but while they are creating and consuming viral videos.

The retailer could, for example, embed advertisements in the user-generated videos with links to the Walmart website or siphon data from the site’s tens of millions of users to glean their shopping habits based on the content they posted.

The intrigue surrounding the plan by Walmart and its co-investor in TikTok, Oracle, has been heightened by the geopolitics of the deal, which President Trump threatened to block if China retains any ownership in the company.

But away from the world stage, Walmart has been making a series of moves that are already transforming the company and, by extension, the broader U.S. retail sector.

Most have involved groceries, a mundane business that seems a far cry from TikTok videos. But it has helped Walmart gain one advantage over Amazon, particularly during the pandemic. Online grocery pickup, which allows customers to order their food online and retrieve it outside the store, is at the center of this strategy.

This month, Walmart announced a new subscription delivery service, Walmart+, which some have billed as the company’s answer to Amazon Prime. For $98 a year and minimum orders of $35, customers can have unlimited deliveries to their homes.

On Tuesday, UBS analysts predicted that Walmart+ would have 10 million subscribers by the end of 2021. Amazon Prime, which costs $119 a year, has about 150 million subscribers.

Walmart’s service is centered on using most of its 4,700 stores as miniature e-commerce warehouses. Because the stores are close to customers’ homes, that shorter delivery time should reduce costs for Walmart and keep food fresher.

Amazon has been offering similar services from its Whole Foods stores, but does not have nearly the same footprint as Walmart.

“You see Amazon following behind Walmart on this,” said Edward Yruma, a retail analyst at KeyBanc Capital Markets.

Image
Credit…Rozette Rago for The New York Times

Driven by online grocery sales, Walmart’s overall e-commerce sales nearly doubled in the latest quarter. It may be difficult to keep growing at that rate, though, as other large grocers like Albertsons and Kroger start to ramp up their online ordering and curbside grocery pickup.

Success in online grocery has led to more hiring, which is significant for Walmart, the nation’s largest private employer. The company’s head count had been relatively steady for several years. But the pandemic has required more help, as shoppers have come to stock up amid the lockdowns.

Walmart has increased its work force by 14 percent since last year, according to Drew Holler, head of human resources at Walmart’s U.S. stores.

Last week, the company announced that it was overhauling management roles in its supercenters, a move that has big implications for how many of its 1.5 million employees are paid and promoted.

Some jobs overseeing traditional in-store departments are being phased out, while other store employees in departments like bakery and automotive care are receiving raises.

“We are repositioning our stores for what we think the future of retail is going to look like,” Mr. Holler said in an interview.

To that end, some analysts say, Walmart should be investing in the stores and e-commerce infrastructure rather than spending billions on investments like TikTok.

Scott Mushkin, founder of the consumer research firm R5 Capital and a longtime Wall Street analyst, said Walmart should be focusing more on automating its online grocery process to reduce costs or even bolstering its fresh food offerings.

Even with the subscription fees for Walmart+, Mr. Mushkin and other analysts calculate that the retailer will lose money on each home delivery.

“Maybe TikTok is a magic wand,” Mr. Mushkin said. “But why blow money on a deal like that when they could be investing in automation in the grocery-picking process?”

Image

Credit…Eduardo Munoz/Reuters

Other analysts say the Walmart+ offering, after much fanfare and anticipation, will never be able to compete with Prime, which has no minimum order and includes streaming entertainment.

The major Walmart+ perk is a 5-cent-a-gallon discount at affiliated gas stations.

“It is not as powerful as what we imagined,” analysts at Morgan Stanley wrote in a research note this week. In June, before the details of the services were announced, the investment bank had predicted that as many as 20 million people could sign up within a few months and that Walmart’s stock would soar in value.

In a statement this weekend, Walmart said TikTok would be “an important way for us to expand our reach and serve omnichannel customers as well as grow our third-party marketplace, fulfillment and advertising businesses.”

The proposed investment in TikTok sounds rather vague, but many analysts said they were willing to give Walmart time to work out the details.

“The future of retail is community engagement where users are creating content,” said Mr. Chen, the Cowen analyst. “Walmart is taking a very proactive stance.”

Read More