Royal Mail and Amazon

From the fifth century AD, and for around a hundred years thereafter, bands of Germanic settlers left their villages in Fresia and Jutland and headed to the coast. Once there, they pushed their clinker boats into the cold waters of the North Sea and made for Britain.

These bands made landfall all over the place, from Southampton to Scarborough. They would have had little sense of the wondrous civilisation they were founding: Inter Milan would one day play in Southampton (2016, 2-1); Britney Spears would one day perform in Scarborough (2018, with Pitbull opening).

Before they seeded such a civilisation, these Germanic settlers (they'll come to be known as the Anglo-Saxons) would first have to deal with the indigenous Britons - around a million people, who looked like the Gauls/Celts of mainland Europe, and who had seen the Romans arrive (55BC) and then flee (c.400AD).

The Anglo-Saxons did indeed deal with the Britons. Within a few hundred years of their arrival, the Anglo-Saxon minority had utterly dismantled the cultural and political structures of the indigenous Brittonic majority.

Place names became Anglo-Saxon. Burial traditions became Anglo-Saxon. The population's DNA became Anglo-Saxon. Brittonic culture was pushed to the margins, surviving as the dominant culture only in Wales, Cornwall, Devon, parts of the North West and some channel islands.

You can trace the borders between Brittonic and Anglo-Saxon kingdoms through the DNA of present-day inhabitants. The DNA of people in North Wales and Devon is less Anglo-Saxon-y than that of people in Somerset, Shropshire and Cheshire.

(Rubén Tarrío)

By the time that the written historical record restarts in the 8th century (with the economy finally large enough to sustain idle communities of monks, who do lots of writing) whatever difference there had once been between Briton and Anglo-Saxon has, for the most part, been erased.

How? No-one's quite sure given the near complete absence of contemporary written sources, but here are some theories that I half-remember from university, all of which sit on a spectrum of coercion:

• Big love-in: a large number of Anglo-Saxons came over. There's lots of intermarriage and cross-cultural mixing. The indigenous Britons somehow adopt the language and rituals of these Germanic immigrants. Maybe the Anglo-Saxons were cooler?
• Peaceful elite: a small number of Anglo-Saxons came over. However, they were able to establish themselves as an elite without expelling or exterminating Britons. A bit like the Normans a few hundred years later.
• Small warband: a small number of Anglo-Saxons came over. They were more warbandy than glad-handy.Through force, they established themselves as an elite and all but enslaved the remaining Brittonic population in an apartheid-like regime.
• Big warband: a large number of Anglo-Saxons came over. They expelled and exterminated the Britons, establishing a fairly homogenous Anglo-Saxon society.

make this relevant, please

The story of the Britons and the Anglo-Saxons is useful for understanding the story of Royal Mail and Amazon. It reminds us that there are two ways in which a newcomer is able to change a given market.

First: the newcomer leaves its mark by dominating that market itself (i.e. by establishing its own market share). Think of this as the Anglo-Saxons themselves comin over 'ere.

Second: the incumbents model themselves on the newcomer.

Amazon's growing market share is obvious. What we hear less about is the second process: the ways in which the incumbents are modelling themselves on the newcomer, the ways in which they are Amazonifying.

“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

Let's look at Royal Mail, because I haven't yet interviewed anyone from any other delivery companies.

what is Amazonification?

The golden rule is that consumer convenience comes above all else: buying products should be easy.

Easy is not necessarily cheap. eBay sellers often sell the same products for less.

Easy is not necessarily about choice. It's quite hard to find particular products on Amazon when you have to wade through half a page of sponsored products.

Instead, easy means being able to find quickly a cheap product with a 4+star rating, and for that product to be delivered to you in a scandalously short time.

Amazon's promise of convenience is thus a logistical promise: our supply chains and last-mile logistics are so efficient that we will get you that product quicker than anyone else, and we will turn a profit doing so.

And the other characteristics of Amazonification flow from this promise of convenience through efficient logistics. For example:

1. The reliance on data as a means of predicting consumer behaviour (so that you can pre-emptively allocate resources), and as a means of monitoring the processes of your staff (so that you can refine those processes);
2. Employment contracts that allow work to be quickly given and quickly taken away; efficiency means having no more workers than you need;
3. The removal of the concept of ordinary working hours. If customers will accept deliveries late on Sunday evening, then Amazon will run last-mile delivery shifts until late on Sunday evening.

Of course, all of this only works if: (i) you take your lame ideas about the dignity of labour and stakeholder capitalism and remove them from your brain; and (ii) you first establish a stonking market share by using another of your businesses (Amazon Web Services) to subsidise the expansion of your logistics divisions.

Photo by Hannes Egler on Unsplash

Royal Mail: parcel pushing

The indigenous Britons at Royal Mail must start acting like Anglo-Saxon Amazon or be consumed by it. Let's handover to our postal worker, who had his first appearance in this newsletter last week.

(Amazon warehouses?) I mean that's something we refer to near enough every day, because we're all now changing things, which is fine...

More parcel-y: Royal Mail is being drawn into Amazon's orbit by the decline in the number of letters being sent:

We make more money from letters. Because each letter is worth the stamp money. But each parcel has to be handled by so many different people. Loaded. blah blah. A letter goes through the machine, comes out, postman delivers it. But the parcel has to go through a depot, then through a tracking system, then it's loaded, and then it has to go into the van, come to another depot, then when it gets here it has to be scanned in, it has to be loaded, and then it has to be carried. There is not as much money in it. The letters are dying out. They are concentrating on parcels.

Data: Royal Mail is equipping itself with tools that can provide additional data. It is also adopting the kind of nudge techniques that Amazon uses in its processes - a worker is reminded that the company knows they are not working:

The PDA units, the handheld guns, they've got the locations on all day. If them guns sit still for more than 15 minutes, they start vibrating. The management can look at it [the data]. I don't know whether they do to the extent that Amazon do, but we're going along that wavelength. It will come in soon.

Working hours: Royal Mail is removing the concept of ordinary working hours:

We already know Amazon, DPD, Hermes, they're all on top of their drivers. They've been given a set time that they've got to do this. At Royal Mail, they'll tell you, "it's got to be done by this time, but if you don't, cool". No one's gonna screw their face up. But if Amazon is doing it, then you know full well, we're going to be doing it. We suddenly seem to be sort of trying to play catch up here. I don't think it's worrying. But we will be doing it soon. They're bringing in working on Sundays soon. But they're making it for the part timers and if you want to opt-in. It's not a permanent fixture for us.

Flexible contracting: Royal Mail is hiring delivery drivers (separate from posties) on temporary contracts:

They're bringing out separate packet drivers for our depot. Whereas we used to take out all sorts of packets, now... any great big packets, or what they call is a above shoe size box, the drivers will take them for you.

Where will this end?

It's not unreasonable to imagine Royal Mail soon making its workers wear watches that can track heart rates, stress levels, calories burned, walking speed. Perhaps they'll put black boxes in the vans, tracking acceleration speed etc. All this stuff exists already.

Expect posties on flexible contracts.

It's not very Postman Pat-like, but these are the kind of micro-improvements to productivity and cost reductions that will allow Royal Mail to compete in the hyper-modern world of last mile logistics.

I think it's time for a gritty reboot of Postman Pat...

conclusion: is this bad?

Some concluding thoughts:

people like driving for Amazon

In December, we heard from a chef, who mentioned that lots of his peers left cheffing to drive delivery vans. He said that they were happy - more autonomy, less stress, better hours, away from the physical gaze of the boss. When we slag off Amazon for its poor working conditions etc., we should remember that the more realistic comparison is between jobs at Amazon and other low skill, low pay jobs (I know that doesn't make it okay!).

good management is key

You can collect lots of data about your employees without them feeling like their autonomy is threatened. Football clubs, for example, have been doing this for years. And, in the hands of a good manager, it can be a good tool for early intervention: if you see that a postal worker is working below their average pace for several days, this allows a good manager to step in, put an arm around them, and see if anything's the matter.

the bias towards the measurable

There's the problem that I've mentioned previously when writing about the police. In a data-driven culture, management may place greater importance on the things that can be measured easily, giving less weight to the aspects of postal work that are harder to quantify.

For instance, the average pace of a postal worker out on their walks is easily measured by wearable technology. The quality of the postal worker's interactions with the public is less easy to measure (e.g. how pleasant were their "hullos"?). These interactions are critical aspects of Royal Mail's brand - a friendly, reliable delivery company. Beware the data myopia!

Amazon without the bad stuff

Is there a third way between Amazon and the old nationalised Royal Mail? A delivery company that is efficient, techy and cheap, but which does not treat its workers poorly.

In many ways, Royal Mail has done all the hard stuff. It has a physical presence everywhere, ideally suited to last-mile logistics. It has loyal staff. An excellent brand.

Crucially, it has a monopoly on the delivery of letters that is profitable. This can be seen as its Amazon Web Services equivalent. It has its own (anti-competitive!) money-printer that it can use to subsidise capital improvements. As long as people keep sending letters!

If Amazon is broken up, and if employment law in this country is tightened, then Royal Mail suddenly looks less like a washed-up has-been, crushed by the weight of its pension obligations. Instead, it looks like a vision of the future - responsible data-driven stakeholder capitalism.

unrealistic beauty standards

The trouble with Amazon is that it isn't a delivery company. At root, it's an e-commerce company that does its own delivery. It's not competing with Royal Mail in the same way that, say, DPD are.

Yet, because Amazon does so much delivering, it has defined our expectations for how delivery companies should operate in the modern world.

Royal Mail and other delivery companies are trying to Amazonify themselves, but - to use a crass example - it's the equivalent of teenage girls crash-dieting to make themselves look like celebrities. It won't work because the celebrities have had plastic surgery and appear in edited photographs. They have had money pumped into them, just as Amazon's logistics network has money pumped into it (from AWS, from other parts of its business). Amazon's delivery services are loss-leading by design (i.e. not covered by the postage that Amazon charges) - other companies don't have that privilege.

Bonus round: here is a fascinating deep dive into Amazon's reported accounts. Amazon once used its hugely profitable Amazon Web Services division to subsidise the expansion of its e-commerce divisions. It seems this is no longer the case, as it has worked out a number of different ways of turning a profit - e.g., opening up its platform and infrastructure to 3rd party sellers, and its offering of sponsored products.

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