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Macy's Hits Union Obstruction as It Aims to Keep Pace With Amazon

By Howard Smith - Apr 30, 2021 at 4:15PM

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A Macy's employee union challenged the company for using a new mobile checkout app -- and won.

Amazon (AMZN 3.15%) continues to utilize its technology to gain more and more share of retail sales. In its first-quarter 2021 earnings report last night, the e-commerce giant said sales jumped 44% over the prior-year period. Other companies are trying to keep up, but iconic retailer Macy's (M -1.91%) plan to improve its competitiveness has run into some employee opposition. 

Three years ago, Macy's rolled out a new mobile checkout option to improve the customer experience by speeding up sales checkouts in its stores. The mobile checkout feature is connected to the Macy's app, and allows customers to pay on the app with their pre-registered credit card once they complete their in-store shopping.

Macy's flagship store in NYC

Image source: Macy's.

Amazon instituted its own speedy checkout tech with its Amazon Go feature for some Whole Foods grocery stores, eliminating the need for cashiers. But the union representing Macy's employees objected to the tech adoption, believing it could lead to lost compensation and jobs. Now, an independent arbitrator has ruled the company violated its bargaining agreement, and can not use the self-checkout feature in some departments where commissions are paid to employees, according to a CNBC report. In addition, Macy's must provide backpay to employees who would have earned commissions at stores that implemented the scan-and-pay feature.

Macy's is attempting to leverage its brick-and-mortar presence, attracting consumers who want a combination of an in-store experience and the ease of digital shopping.

Fernando Lemus, president of the union representing the workers that filed the grievance, said in a statement on the ruling, "As technology continues to advance in this industry, we were concerned this was just the beginning."

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