retail news in context, analysis with attitude

Reuters reports that it has conducted a survey concluding that Amazon packages "ordered by its Prime members regularly arrived late during the holidays ... reflecting the strain on the logistics network that transformed the company into an e-commerce powerhouse." According to the story, "Customer satisfaction with Prime is extremely high - 96 percent are happy with its two-day shipping service, the survey revealed. But the results raise questions for Amazon as it expands and takes greater control of its shipping system."

But while 96 percent of customers are happy, the survey indicates that "10 percent of about 1,700 Amazon shoppers who chose the two-day shipping option said packages ordered between Nov. 1 and Dec. 31 did not arrive on the expected day."

Amazon questioned the methodology of the survey and said that the results seemed "suspect."

The Reuters story says that "one of Amazon's chief concerns is it does not have control of the entire delivery from warehouse to consumer, said former employees who spoke on condition of anonymity. For years, the company has been testing ways to take more control of the last mile, those ex-employees said. Those steps include building its own local delivery fleet and using the trucks designated for its Amazon Fresh grocery service to deliver orders."
KC's View:
Not my experience, but then again, maybe I'm just in the 90 percent.

What I think is interesting is the fact that while only 90 percent of Prime customers got their packages on time, 98 percent of them are satisfies. I think that says a lot about the way Amazon customers feel about the company - it delivers on its value proposition more often than not.

One other point. It is worth noting that while some retailers farm out the fulfillment process to Instacart and like services, Amazon is trying to bring more of it home because "one of Amazon's chief concerns is it does not have control of the entire delivery from warehouse to consumer." Amazon understands that to build and maintain the kinds of customer relationships it needs to survive, it has to control as much of the process as possible ... which is the exact opposite of what some other retailers are doing.