Amazon Inc., has always managed to exceed expectations when it comes to customer satisfaction. But according to a recent survey by PYMNTS, dissatisfaction among an estimated 200+ million Amazon Prime members has hit a new low.
Amazon’s customer satisfaction is the stuff of legends with the e-retailer topping lists until last year. The number of Amazon customers who said they were “extremely” or “very satisfied” has fallen to 79% in 2022, according to a survey by investment firm Evercore ISI. A decade ago the score was almost 88%.
Amazon’s Customer Satisfaction Falls
The e-retailer is known for its customer obsession and constantly tries to improve its search results and merchandise. PYMNTS data also showed that Amazon continues to lead rival Walmart in overall consumer and retail spending. Despite the fall in Amazon’s customer satisfaction, it leads the US ecommerce market with almost 45% of market share, followed by Walmart with 5.4%.
Amazon continues to lead in non-essential spending as the ecommerce site offers a huge variety of bargains.
“Perhaps because ecommerce retailers such as Amazon offer detailed product information and reviews, consumers can confidently buy durable goods online without having to visit physical stores to get that information,” PYMNTS wrote in its report.
Amazon’s lead in the sporting goods, hobbies, music, and books categories has continued untouched. PYMNTS data shows that as of the fourth quarter of 2022, the company commands a 15% share of this segment, up somewhat from the same period in 2021, while Walmart has seen its share decline.
Walmart is also aggressively marketing its affordability and on November 15, it told investors that it is gaining ground in the grocery sector. However, it remains to be seen whether the growth is a result of prevailing market conditions or a more permanent one due to strategic marketing. Walmart CEO Doug McMillion revealed that the company will continue to offer good bargains and continue its hardline stance on pricing.
According to Consumer Intelligence Research Partners, Amazon has always been the gold-standard with regards to shipping and delivery time.
Amazon has seen its profit and growth forecast decline, as people grapple with biting inflation and an unstable economy. The survey results come close on the heels of the announcement that the company will be initiating job cuts in the coming weeks. Amazon reported a second quarterly loss in Q2, as slow sales affected its overall business combined with its bleeding investment in Rivian.
A spokesperson for the company however told The Wall Street Journal that Amazon’s customer service has been worked up in recent years, and people can easily find products on its site.
Amazon’s widening reach and side-effects
In a bid to increase its footprint, the ecommerce site paid $3.9 billion to acquire One Medical last summer. “Amazon Clinic will operate in 32 states and provide virtual care for more than 20 common health conditions, such as allergies, acne, and hair loss,” the company’s press release said. “We want to make it dramatically easier for people to get and stay healthy.”
Amazon’s widening tentacles made many industry watchers uncomfortable as they do not want one big tech company to have access to everything from their shopping habits to private healthcare details. The move might have led some subscribers to stop frequenting Amazon, as they worried about the possible repercussions of the ecommerce site’s access to private data.
Some Amazon users even told The Wall Street Journal that their experiences with the e-retailer have deteriorated in the past few months as shopping experiences have sometimes been stressful. A few shoppers reported that for a two-day delivery it took nearly a week for the parcel to arrive, while some popular products were not available on the site. This has forced them to check out alternative sites and take their business elsewhere.
Evercore ISI said in its report that Amazon’s expansion of sellers and search advertising “may have undermined the quality of Amazon’s marketplace.”
While the exact reason for Amazon’s fall from grace is not clear, it is evident that the retailer must focus on enhancing customer experiences and seek better feedback proactively, to avoid losing ground.
