business news in context, analysis with attitude

The Wall Street Journal reports that "for nearly three decades, Inc. has been defined by its obsession over customers. Recent information, however, suggests that consumer enthusiasm about the country’s largest online retailer 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."

Here's the money (no pun intended) quote from Guru Hariharan, described as "a former Amazon manager who is chief executive of e-commerce service provider CommerceIQ:"

“For 20 years, it was customer obsession at any cost.  Now, it’s customer obsession at the right cost.”

The Journal writes:  "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."

The Journal goes on to point out that Amazon "has remained the country’s biggest online retailer 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.

"Amazon 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 the company 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."

KC's View:

I read this story, and my first thought is that, if there are concerns within Amazon about slipping customer service scores, it suggests that it is a good time to start placing bets on the return of Jeff Bezos to the CEO job.

I've argued here that there's nothing wrong with some job cutbacks and some internal recalibration.  The warp speed propulsion that was prompted by the pandemic, followed by significant headwinds created by inflation and a recessionary mindset, pretty much mandated some rightsizing.  Plus, Amazon always has worked aggressively against a "we've always done it this way" mindset, and that applies when times are tough as well as when things are going well.

But … Amazon also always has had a big picture, long-game approach to business.  Damn the stock price, to hell with the analysts … just focus on the customer.

If that has changed, then it could be like changing a much loved recipe so the dish is very similar to what we've always loved, but not quite the same because the ingredients have been downgraded just a bit.  "Nobody will notice," the folks with the eyeshades often say, but the truth is that everybody notices, and the best customers care.  Deeply.