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Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

Regular readers of MorningNewsBeat know that over the years, I have spoken enthusiastically of Amazon.com and its various products and services – including its entry into the grocery business. I buy a lot of groceries via Amazon’s website, and have heard some very good things about its Amazon Fresh offering in Seattle, which, by the way, has now been expanded so it covers pretty much the entire city, delivering both fresh foods and packaged goods in Amazon’s own trucks. (See story below.)

However, today I’d like to talk about a mistake that I think Amazon is making…a mistake that other companies should be careful not to duplicate.

One of my favorite features on Amazon’s website is its Subscribe & Save service, which allows me to place a standing order for a number of products, such as shampoo and laundry detergent. It amounts to automatic replenishment at the consumer level – I know how much we go through in our household, and I know that once a quarter I’m going to get a case delivered so that there is no chance we will run out. (I’ve chosen the once-a-quarter frequency, by the way…there are other options, depending on a shopper’s particular needs.) In exchange for them getting this standard order, I get discounts both for having placed the order on Amazon and for being part of Subscribe & Save…plus I get free shipping…and the final price is lower than any I could get elsewhere. And you can't beat the convenience.

As for Amazon’s part, it gets a highly loyal and completely locked in customer. It is highly unlikely that I’m going to shop anywhere else for any of these products, or that I’m going to try a competing product, and I’m sure that they get manufacturers to provide allowances based on provable and definable loyalty.

Except that in two cases in recent weeks, I’ve gotten an email from Amazon saying that they don't have my Subscribe & Save products in stock, and that I’ll have to wait another three months for the automatic replenishment that suddenly isn’t so automatic.

Now, I’m not sure what’s going on at Amazon, but this is a serious mistake. They’ve opened the door for me to try another online service for the same products, which I did with Alice.com. (I was happy with the ordering and fulfillment service at Alice.com, but wish they had an auto replenishment feature.) They even opened the door for me to use a – gasp! - brick-and-mortar store for these products. And, they’ve opened a window for me to try competing brands, which undermines the whole value proposition from the manufacturer’s point of view. (I was shocked, by the way, that they didn’t even try to offer me equivalent products…which would have kept me from looking beyond Amazon’s website. But they didn’t, and I did.)

Could it be that Amazon is having out-of-stock problems? Or that manufacturers are less committed to the program? Or that its vaunted merchandising systems aren’t what they used to be? Or that someone at Amazon headquarters simply isn’t paying attention? Or could it be some combination of all these things?

I’m not sure. But what I do know is that Amazon, which usually doesn’t miss a trick when it comes to identifying consumer preferences and buying habits and then doing everything possible to lock in shoppers for the long-term, blew it. They goofed.

Amazon isn’t in any imminent danger of losing me as a customer – I’ve been shopping on its site since March of 1997…so I have a long-term investment in the brand. But as a consumer and highly loyal customer, I’m not pleased.

From a business point of view, I believe that automatic replenishment down to the consumer level is a great idea that hasn’t been employed nearly enough by retailers. But it only is great idea if you deliver on the promise.

Amazon didn’t. It is a good lesson for every retailer and manufacturer.
KC's View: