E-commerce towns, and why Bezos needs to be the next Baťa
Spend an hour or two on pretty much any motorway in the world and you will inevitably drive past an e-commerce distribution centre. Sometimes they are branded in accordance with the contracting logistics company; sometimes they are branded by the e-commerce company itself; and sometimes they are branded by the landlord. Whoever owns and brands them takes the same approach; they are huge metal boxes filled with goods ready to go out or, at least, ready to be ordered.
In the case of many consumer e-commerce companies, these distribution centres and warehouses are rather dispiriting places to be. Packers and pickers are on low wages – sometimes on zero-hours contracts – with very few employee benefits (some might even be self-employed, with even fewer benefits). They are monitored to the minute, and productivity failings, such as the basic human need of taking a piss, are simply seen as employee attitude problems which are recorded and dealt with.
Although these centres are highly efficient and the online brands that run them offer low prices as a result, there is clearly an ethical dimension here which, for many retail shoppers, is simply not known about – or simply ignored in the light of a consumer benefit of superior price and convenience. As Michael Franti once said, dehumanising the victim makes things simpler. This is borne out in a recent poll for Imperica where, in voting for one choice in a quadrant of love/hate company/service selections regarding Amazon, the clear winner was "Hate the company, love the service".
Indeed, it was Amazon who were recently in the market for a location, for their second HQ. 238 cities across North America have been whittled down, with Amazon expected to announce the winning location by the end of the year. Cities have gone to extraordinary lengths – with extravagant advertising campaigns and tax breaks – to tempt Amazon to set up there. But, remember: this is an HQ, a nerve centre, which remains far removed from a cold, outsized shed off the M1. For that place, things won't change.
To see how we could bring the top and bottom of e-commerce retail – so to speak – together, we need to go back to the 19th century.
The Baťa family founded their eponymous shoe company in 1894. After a slow start, the business picked up when Tomáš Baťa travelled to Massachusetts in order to study mass production. Demand for Bata shoes picked up as mass production was taken up: prices fell and quality improved.
It was the First World War which, ironically, caused the Bata Shoe Company to develop a corporate concept which it became famous for. Demand for its shoes from armies across Europe helped the company to grow, a driver of growth which stopped after the war had ended and went in reverse gear as Czechoslovakia entered a period of deep post-war recession. To keep the company going, the retail price of the company's shoes was cut in half – and employees took a 40% pay cut. However, to prevent employees from facing hardship, Baťa found ways of offering food and clothing to them at half price. This, somewhat by necessity and accident, developed a business model which became globally successful. Tomáš Baťa's commercial acumen straddled a deep knowledge of what customers want (Bata was the first well-known proponent of psychological pricing – where prices are .99 rather than rounded up) and what his employees wanted, both in terms of their human needs and what they could offer to the company.
As post-recession demand picked up, Bata took on more employees in the company's home town of Zlin. The Bata factory became more of a vertically-integrated industrial park: everything from the leather tannery to making the shoeboxes happened in one place, as did growing food for the workers. Zlin became the first Bataville, with the company later adding houses and even a hospital for its workers.
The term "Bataville" was taken literally. As the company grew, it set up these vertically-integrated towns across the world: Batawa in Canada, Batapur in Pakistan, and Batadorp in the Netherlands are just three of a global network of Bata-built towns for Bata shoe-producing employees. In the UK, a Bataville was created in east Tilbury, on the banks of the Thames in Essex.
In Tilbury, Bata had its own school, clubs, farm, cinema, tennis courts, swimming pool, and a college where teenage children of Bata employees could take an apprenticeship in the practice of shoemaking. You didn't need to leave the Bata Estate for anything. It was a convenient, somewhat Utopian dream of a job for life whilst being looked after in a system which one could only describe, in the nicest possible way, as an institution.
Tomáš Baťa died in a plane crash during the construction of the Tilbury estate, and later, the Batavilles were mothballed as consumer demands changed. But that doesn't mean that it's a dead idea.
Imagine a town focussed on e-commerce. Where website development, technical services, order processing, distribution, picking and packing were all integrated into one place. People could start as pickers and work their way up to be Node developers, or Kubernetes managers. They would be able to investigate problems immediately and in-person. Ideas of how to further optimise processes and supply chains would flourish, as the processes would all literally be there. There would be pastoral care, learning opportunities for all generations, and an environment where employees would put in the hours and effort, but also be encouraged to keep active and healthy.
In short, people would be looked after. People who are looked after are productive, have greater job satisfaction, and are able to see where their careers can go, and flourish. Such 'e-commerce towns' could even be built around complimentary small companies or even startups, instantly offering an ecosystem – a true, physical ecosystem – which businesses such as WeWork aim to create. This one would be more real.
It's not impossible. It has been done. A Czech family full of ideas, enthusiasm and care for their people showed the world the way.
Jeff Bezos, over to you.
Paul Squires is the Publisher of Imperica.