Amazon's Crisis Of Trust


Greg Petro, Contributor, Forbes

Mar 8, 2019


Amazon has built its brand on being a trusted partner for retailers and consumers alike, a place where consumers feel they can find the lowest price and brands and manufacturers benefit from an open platform model that connects their goods and services with millions of consumers.


As more brands get wise to how partnerships are benefiting Amazon and allowing the retail giant to compete on customer experience, and as consumers encounter more expensive, less predictable features, Amazon may be facing a crisis of trust for the first time in its history.


Here’s why:


Price Creep


Price has always been a de facto differentiator for Amazon (second maybe only to convenience) when it comes to consumer benefits. But the cost of doing business with Amazon continues to increase, and it’s starting to wear on consumers.


Amazon raised the price of Prime memberships last summer for both monthly and annual members, resulting in a drop-off in membership. Last October, data reported that Amazon Prime memberships dipped from an all-time high of 47.8% of all U.S. consumers in April to 42.9% in August. Prime members on average buy $1400 a year on the site, versus non-prime customers who spend $600, according to a Business Insider story. The slowing of the Prime machine could also mean -  you guessed it -  price increases elsewhere.


This week, Amazon reported that it will be raising prices on more than 500 grocery items at Whole Foods, citing inflation and unrenewed contracts with unnamed vendors. For many consumers, this flies in the face of their original promise of lower prices and negates Amazon’s original price cut on nearly 500 of Whole Foods’ items just after the acquisition. A few short months ago, Amazon said it was “just getting started” on cuts.


It’s only a matter of time before these increases roll into other goods. Retailers have a golden opportunity right now to arm themselves with data that ensures they are offering customers the right products at the best price, to reinforce trust and build brand loyalty.


Price Flux ...


The Seller Trap ...


more, including links