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Amazon Is Tops With Consumers

12/20/2012 does many things right. Most are operational. When it comes to selection, order processing speed, price – Amazon is tough to beat.

One thing that Amazon does that has nothing to do with operations is it has earned consumers’ trust.

OC&C Strategy Consultants surveyed over 2,700 U.S. consumers in an effort to understand consumer sentiment toward 50 of the country’s leading retailers. ranked first in the Index overall and dominated most of the proposition dimensions rated by each consumer. The online retailer scored No. 1 in the following categories: Product Breadth, “Products That Are Suited To Me,” Value for Money, and Trust. In all other categories relevant to non-fashion online retail, namely Price, Product Quality and Service, Amazon placed in the top three.

December 18th I purchased a gift from the home department at 10:15 am. At 3:12pm I received an email confirming my order had been shipped – not processed, but shipped! I was blown away.

Perhaps the OC&C survey should be rating retail brands by their “blow away” factor. When was the last time you can honestly say you were blown away by service, price, quality or some other attribute important to your transaction with a brand? Unfortunately, my guess is it has been a long time.

Amazon has its challenges. The ever-present drive to be the lowest price on everything will take a toll on the company – if not simply in terms of margin, quality is often sacrificed. Additionally Amazon is seeking new revenue channels that are largely service related – such as cloud based services. Those also tend to be low margin. And surprisingly apparel continues to lag as a percentage of overall business (see below). There are many apparel brands that would love a $5bn business, but relative to $9bn in books, Amazon’s apparel sales appear tepid.

Putting those concerns aside it’s safe to say Amazon is on a roll. So far, retail e-commerce spending for the first 44 days of the November–December 2012 holiday season was $33.8 billion up 13% – and Amazon is getting a big chunk of that increase. Add in the shift to mobile commerce, showrooming and smartphone ownership growth and it’s safe to say Amazon will rate highly with consumers in 2013 as well.

PC Mag

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