Amazon Has a Problem: Consumers Don't Love It as Much as They Used To
Research shows decline in user satisfaction at the e-commerce empire, and analysts see link to search results, product quality
published : 23 Nov 2022 at 04:00
newspaper section: Business
writer: Sebastian Herrera
For nearly three decades, Amazon.com Inc. has been defined by its obsession over customers. Recent information, however, suggests that consumer enthusiasm about the largest online retailer in the U.S. has slipped.
The number of Amazon customers who said they were "extremely" or "very satisfied" with the company in a recent survey has fallen, measuring at 79% in 2022, according to investment firm Evercore ISI.
The number reached a low of 65% in 2020 during the pandemic but remains down from a peak of 88% almost a decade ago, the research shows.
Last year, customer satisfaction at Amazon declined to a record low on the American Customer Satisfaction Index, which tracks shopper approval at more than 400 of the largest companies in the U.S.
Amazon scored 78 out of 100, down from 86 out of 100 five years earlier and its worst performance since 2000 -- the year the index started tracking the Seattle-based company.
In 2020 and 2021, Amazon fell behind the shopping sites of Costco Wholesale Corp. and Nordstrom Inc.
Consulting firm Brooks Bell earlier this year also surveyed more than 1,000 Amazon customers in the U.S. and found that nearly a third of them reported regularly receiving products late or getting an item of low quality.
That is the first time the firm conducted the study.
Amazon has remained the biggest online retailer in the U.S. by a wide margin, with a loyal base of more than 200 million users globally who pay for Prime memberships, which offer subscribers fast shipping and access to Amazon's Prime Video streaming service as well as discounts at Whole Foods Market and other perks.
The company is also still a standard setter in shipping times and holds on to about 98% of Prime customers who have subscribed for at least two years, according to Consumer Intelligence Research Partners.
The survey results come as Amazon has seen growth and profit decline and has announced plans to cut jobs ahead of the holiday season, the company's most important period for sales.
An Amazon spokeswoman said customers are still highly satisfied with their experience, and the company has worked in recent years to improve how customers find products on its website.
Changes have included introducing a product comparison tool and updating its app to enable customers to more easily see the items and programs being searched.
The slip in the surveys could reflect a number of issues, including customer service concerns and frustration over search results, analysts and former employees said.
Amazon has boosted profit by expanding the pool of third-party sellers that use its platform and by embracing advertising whereby sellers pay to appear at the top of searches for certain products.
These two practices have affected the clarity of search results, said Guru Hariharan, a former Amazon manager who is chief executive of e-commerce service provider CommerceIQ.
"For 20 years, it was customer obsession at any cost," Mr. Hariharan said. "Now, it's customer obsession at the right cost."
The company's expansion of its pool of sellers and search advertising "may have undermined the quality of Amazon's marketplace," Evercore ISI said in its report, published this past summer.
The downturn in Amazon's ratings has happened as some other retailers have improved their e-commerce services in recent years.
The company is aware of some increased customer dissatisfaction and has worked to improve the experience of users on the site in part by employing algorithms more tailored to individual customers based on data such as past search results, according to current and former employees.
Doing so requires a balance between expanding listings to remain "the everything store" and curating shopping results.
The Amazon spokeswoman said the company created more curated selections in online store sections such as Whole Foods Market. And it spent almost $1 billion last year trying to combat counterfeiting, fraud and other abuse of its platform. Such tactics by sellers, as well as fake reviews, can affect search results.
Amazon says that metrics such as high user-ratings of its phone app show positive shopper feedback.
In interviews, some Amazon shoppers expressed disappointment with their shopping experiences at the company even as they continue to see it as an essential part of their lives.
Ken Higgins, 48 years old, said he has been an enthusiastic Amazon Prime member since the service launched in 2005, but several experiences with the company have left him frustrated.
Recently, he tried to repurchase a door spring from Amazon, but when he searched for the item, he couldn't find it, despite typing in the model number and finding it at other stores.
After a different search, for a baby walker, Mr. Higgins purchased one with Amazon's two-day shipping promise.
It took a week to be delivered, he said.
"Amazon is so big now, they have the power to say take it or leave it," said Mr. Higgins, who lives in Tallahassee, Florida. "It feels like they used to care more."
Jackie Guerrero, an Amazon customer in the San Francisco area, said she recently waited about two weeks for a watch she ordered, and then Amazon emailed her to say it was undeliverable without explanation.
It took her multiple tries to reach someone at the company to receive a refund.
"If you actually want to call and reach someone, it's really difficult," Ms. Guerrero said.
Amazon has taken steps to automate aspects of its customer service. At the same time, the company has over the years made it easier to return products through partnerships with stores and opening its own retail spaces.
The Amazon spokeswoman said the company consistently exceeds its goals of answering at least 80% of phone calls in 60 seconds or less and responding to 80% of chat support requests within 30 seconds or less.
Amazon's "two-day" shipping for Prime members lengthened to as many as six days during the height of the pandemic as the company dealt with a deluge of orders and supply-chain constraints, according to research firm NielsenIQ.
Those averages have fallen in recent months to around two days, although in some remote areas, deliveries have taken an extra day or longer, NielsenIQ research shows.
Amazon executives have said shipping times are stabilizing.
The company said its delivery promises fluctuate based on a variety of factors that include time of day, transportation capacity, regional demand and customer location.
- The wall street journal