The Amazon experience is unrivalled, but can it be sustained?by
Amazon's customer experience rankings are seemingly at an all-time high, yet recent trends suggest the retail behemoth's dominance in CX may be coming to an end.
Amazon is light-years ahead of competitors on customer experience, if you believe every study you read.
Take recent Conversity research data, which found that more than half (55%) of US consumers ranked the all-conquering retail monolith as offering the best customer experience. In comparison, Walmart was second on the list with a mere 11%, followed by Target, Best Buy and Ebay, with just 4%.
This isn’t a viewpoint exclusive to the US, either. Last year, the UK’s Institute of Customer Service ranked Amazon as having the ‘best customer experience of the decade’, receiving an average customer service score of 87.4 (out of 100) on the UK Customer Service Index (UKCSI) between January 2010 and January 2020 – more than its closest rival, by some stretch.
Brad Christian, global chief customer officer of Conversity, believes Amazon has rightfully been set as the gold standard of CX over the last 10 years.
"It has become ingrained in the consumer psyche as a company that prides itself on reliability, ease of use, speed of service, and high-quality customer service.
“These attributes breed loyalty, and given how important loyalty is to an existing retailer according to our research, consistency of service is one of the key reasons behind Amazon's dominance,” he explains.
However, despite its seemingly unfettered dominance, Christian also believes there are clear opportunities for other brands to knock Amazon off its perch.
"Amazon might be top notch in the eyes of customers for now, but other retailers have an opportunity to steal share with the right approach. Competing on price will always be important, but humanising the online purchase experience more effectively is where the real differences can be made."
So, can Amazon’s position of dominance really be challenged? The idea of ‘humanised experiences’ being the key to other brands usurping Amazon’s position as CX standard-bearer is one that has gained traction in recent years.
Whilst Amazon has seemingly shunned the human element of the experience it offers – as recent actions such as the mothballing of Amazon Mayday and the launch of human-lite Amazon Go stores might suggest – former head of customer experience for Genesys and managing partner for Xperiente, Musa Hanhan believes this is where other businesses must focus their attention.
“Empathy, anticipation, and authenticity are at the core of what creates memorable, genuine, and valuable experiences.
“We know advanced technologies are part of our daily lives, from smart devices to social media and beyond. That means our experiences are constantly changing, rapidly and instantaneously. Our expectations are influenced by the next new gadget or trend and we expect our human interactions to be the same. But we, as humans, were not born to be digitally connected 24/7 and consume information at the speed of light.
“Thus, designing the future of customer experience requires the delicate and balanced dynamic of blending technology and human interaction and behaviour. Doing so will enable us to create immersive experiences that are well integrated into the human experience and ones that both brands and customers embrace.”
Competing on price will always be important, but humanising the online purchase experience more effectively is where the real differences can be made
Sampson Lee, founder of Global CEM and long-time commentator on Amazon’s rise, also believes the retailer’s unrelenting pursuit towards frictionless CX, at the expense of a more human experience, could eventually be its downfall.
“It’s difficult to find competitors who rival Amazon on ‘fast and easy’. They continue to deliver ‘all pleasure, zero pain’ experiences with the cheapest prices.
“However, “Amazon is customer-centric”, as a statement, is valid only if we ignore the (potential) negative impacts brought by their unequalled technological power and aggressive expansion across multiple business domains: collecting our BIG Data and becoming a BIG Brother, and turning into monopolies in various industries. They would become too rich, too powerful and too big to fall. Are these not the critical concerns of any customer with a conscience?”
Indeed, there is now evidence that consumer conscience is seemingly starting to sway. Recent research from Sitecore suggests a large percentage of consumers are no longer willing to forego their concerns about the retailer’s contentious moral and ethical position in exchange for the ‘fast and easy’ experience.
In a survey of UK consumers, 32% revealed they felt extreme guilt after they’d shopped on Amazon, and were ready to move away from the service. Crucially, younger generations “harbour significantly more buyers’ remorse about their Amazon purchases”, with 44% of millennials most likely to feel guilty followed by 42% of Gen Z.
There is a caveat, however – 59% of those surveyed acknowledged they still had Amazon Prime membership and 46% said they visited Amazon first when shopping online, before checking search engine results. Conversely, Amazon saw a 70% increase in earnings in the first nine months of 2020 and a 200% rise in profits during 2020.
Yet a multitude of reasons for planning to curtail spending with Amazon were revealed in the study – including an acknowledgement about the company’s ‘poor employment practices’, a ‘desire to support independent retailers’ and a feeling that products purchased via Amazon were often of ‘low-quality’.
Paige O’Neill, CMO, Sitecore, commenting on the research findings stated that “Amazon fatigue” is setting in with buyers, and that it may be post-COVID that we start to see consumer appreciation of the brand start to wane.
“There is an opportunity here for digital retailers to expand their share of the market but it won’t be an easy win. They’ll need to offer comparable levels of service and personalisation throughout the customer journey to topple the retail giant’s stronghold.”
Competitors rise to the challenge
There is a school of thought that suggests the digital transformation forced on many brands and retailers as a result of COVID has been the catalyst for them being more likely to pose a threat to Amazon in the near future, even if this is yet to fully translate into online sales.
“Just because Amazon dominates the online space now, doesn’t mean it will forever,” says the American Customer Satisfaction Index’s David Vanamberg.
“The pandemic has accelerated the shift to digital, and many businesses are changing with the times. Walmart, Amazon’s closest competition at just under 6% of the market, recently launched its own membership program – Walmart Plus – to challenge Amazon Prime.
“No one’s suggesting that Amazon will lose its stranglehold anytime soon, but it’s no longer the only horse in the race. And while the online giant’s sales are through the roof, changes in customer satisfaction do influence a household’s willingness to buy.”
Amazon's claim to be 'the Earth’s most customer centric company' is no longer valid as a fact or even an aspiration
Indeed, The American Customer Satisfaction Index (ACSI) is one ranking that has gone against the grain in recent years, with its respondents’ scoring of Amazon’s CX.
The ACSI’s 2020 Retail Report saw Amazon tumbling 7% in the ranking and finding itself firmly in the middle in terms of consumer appreciation, tying with five other companies – Staples, Best Buy, Target, eBay, and Macy’s – for the industry average. Seven online retailers currently outpace Amazon, with Costco, Nordstrom, and Etsy all square at the top with a score of 80.
“For me it is very apparent that Amazon's claim to be 'the Earth’s most customer centric company' is no longer valid as a fact or even an aspiration,” says Alex Mead, industry commentator and founder of Customer Service Experience Leadership & Transformation.
“Of course, it's easier to get find products, arrange delivery, and even get refunds, but their CX issues run deeper than that.
“Increasingly we’re seeing a lack of trust in the reliability of Amazon. Far too of often I receive emails from Amazon saying things like 'There has been an issue with your order. Your delivery MAY be late'.
“Many of their orders get stuck with the logistics providers they choose to use, but when things go wrong, or even missing, they now expect customers to have to chase up the status with these delivery companies directly, which is often impossible to do. Basically they are saying, despite ordering from us 'it's not our problem to ensure it's fulfilled as promised'.”
Hoisted by its own petard
Question marks over the company’s ethical and moral approach – including global tax avoidance concerns, the scarcely-believable wealth of its owner Jeff Bezos, issues related to workplace conditions and its hostile growth strategy – have dogged Amazon for many years, drawing much criticism.
Whilst Bezos is set to step down from his position as CEO of the company he founded, there remains an opinion that Amazon will continue to erode the trust of its customers if certain practices remain.
In a 2020 PwC survey, over 70% of consumers now saw trust as the most important factor when buying from a brand, and crucial to their overall experience.
“The early 'convenience' of Amazon was obviously a great attraction for customers for many years, but now most customers think about the wider aspect of their products and goods,” adds Mead.
“If the goods are coming from Amazon directly, we consider the working conditions of the Amazon employees in these vast warehouses, and if they are from third party suppliers, we definitely consider the impact of Amazon's commission.”
And it may yet be that Amazon’s sheer scale is the overriding factor in bringing an end to its dominance – both in terms of experience and in general.
In a WSJ article titled Amazon’s Size Is Becoming a Problem—for Amazon, Christopher Mims cited the company’s branching out and acquisition trail – which has in recent times included Whole Foods and the Washington Post, among other names – as being central to many issues that are starting to undermine the fundamental practices behind what has made the ‘Amazon experience’ so successful. It’s a belief that’s shared by others.
“Amazon's size and scale is actually now its Achilles heel,” states Alex Mead. “Other retailers can match their core principles of well-designed apps, slick delivery processes and strong return policies, but there are so many some opportunities beyond that.
“Knowing the name of the person that made the products, the salespeople spoken to, the customer service agent supporting you, and having direct interaction with the delivery driver on the day of delivery - all of these would be great experiences that would provide things Amazon can't.”
Whether or not this is enough to knock Amazon from its perch as CX frontrunner remains to be seen. But as recent evidence suggests, it may be that Amazon is the chief instigator in this act; with or without a levelling-up exercise from any of its rivals.
Chris was an Editor at MyCustomer from 2014 to 2022. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News.