Shipping Times, Unhappy Customers, and Amazon’s Scramble To Get Back On Top
In the past month, Amazon shoppers have made almost one million negative seller reviews. That’s more than double the typical amount. Amazon’s impressive worldwide shipping infrastructure was crippled by the spread of COVID-19, and their essentials-only policy drove customers elsewhere.
You can account for lost revenue in the skyrocketing numbers of Amazon’s top competitors. Target’s online sales shot up by 141% in April. Walmart saw a 71% increase in the same time. Even Etsy saw an 80% increase in sales in April. But even though Amazon is struggling, don’t let these numbers fool you: what they’re struggling with isn’t a lack of business. It is too much business.
Too Much Business
In pre-COVID times, Amazon was known for putting up unbelievably high numbers. Before the outbreak, Amazon sales accounted for 42% of all online spending in the United States.
However, by mid-April, with the virus in full swing, that number had fallen to just 34%.
Is that number still impressive? Absolutely. Made all the more impressive by the fact that Amazon reported a 26% increase in total sales compared to last year.
But there’s clearly more money going around in that market than there used to be. The scary thing for Amazon is that out of all that new money being poured into ecommerce, they’re not seeing as much as we might expect. The numbers are up, but is Amazon’s control of the market slipping?
Well, as long as they can keep the loyalty of their customers, it shouldn’t be an issue.
Uh oh: what does a massive spike in negative reviews say about customer loyalty? Snap Supply posted a blog in April about how nearly 500,000 negative reviews had been posted since lockdown orders went out for a majority of the country in March.
This translated to a 3% increase in negative reviews overall compared to statistics from April 2019. During this time period, 9% of all Amazon reviews were negative.
Considering the magnitude of Amazon’s operation, such an increase is striking.
So the fact that in the time since, almost one million additional negative reviews have been left is almost jaw dropping. In May of 2019, 345,000 negative reviews were left. In 2020: roughly 945,000 negative reviews were left. This represents a 170% increase.
Why would so many people be compelled to leave negative reviews? It would seem that Amazon’s response to the COVID outbreak -- and the way it limited consumer choice, alienated independent sellers, and added to the already overstressed USPS, causing fulfillment struggles -- is the culprit.
It’s not all bad for Amazon. It just wouldn’t make any sense otherwise: total sales were way up. But with more sales comes a higher chance for error, particularly in such strange times. Add increased order volume, and Amazon’s inability to make good on it, to the list of reasons for their million new negative reviews.
So even amid a sales boom for the whole ecommerce market and a sales increase of 26% over last year, factors like this massive increase in negative reviews and a hugely increased number of sales going to the competition is forcing Amazon to play catch up.
Playing Catch Up
In an interview with the New York Times, John Ghiorso, who runs an agency which helps brands run their Amazon businesses, called Orsa Pacific, described the situation like this: “They eliminated their own competitive advantage they had built over 20 years.”
However, Amazon is gunning to regain this advantage by bringing back daily deals, introducing a new “Summer Sales” event, and engaging in toxic strategies like product dumping.
Given so many recent controversies, will Amazon be able to fight their way back to their old, prestigious status? Mr. Ghiorso is hopeful. “Now they are getting it back pretty quickly,” he told the New York Times with regards to their former “competitive advantage.”
In the meantime, customers continue to leave negative feedback -- sometimes in odd or unexpected ways.
Is Amazon’s “Magic” Fading Away?
Amazon’s business model relies on customers believing that what happens between the moment when they click the “buy now” button and the day they receive their item is magic. Any inconvenience along the way, including shipping slowdown caused by the worst global pandemic in recent human history, breaks this illusion and drives customers away.
But seeing things like ecommerce as “magic” has the unfortunate effect of subconsciously making customers view any online business as a faceless mega corporation like Amazon.
Speaking from experience, independent businesses like Snap Supply couldn’t be further removed from the cold automation of Amazon. We see each other every day -- when there’s no lockdown -- and work hard to provide customers with the best possible experience. The work we do to get you the highest quality part in the lowest possible time has a certain magic to it, but it’s hardly the algorithm-governed, automated “magic” of Amazon.
Perhaps recent events have broken the spell, and online shoppers will begin to recognize other businesses as equally viable, though at the same time, fallible. The virus has affected all of us in many different ways. Maybe it will change the way we see ecommerce.