If you’ve spent any time on the Amazon website or app in recent days, you likely know that this week marks Amazon’s annual shopping bonanza: Prime Day.
No, I’m not hawking a Prime Day promotion for my new book Winner Sells All about the Amazon/Walmart rivalry (though both Amazon and Walmart have matched each other by knocking 24% off the hardcover price). Prime Day is interesting to me this year for another reason — because, as an Amazon executive once put it, “Nowhere is our customer obsession put on display more than it is on Prime Day…a day in which every part of the company comes together to serve our customers.”
Customer Obsession is the first of Amazon’s 16 Leadership Principles. These principles, or LPs as Amazon employees refer to them, are perhaps the most lionized company mottos in the modern business world. They’ve inspired a series of top business books, and a slew of companies trying to adopt them with the hopes of achieving some of the business world success that Amazon has. (I wasn’t sure whether to laugh or cringe when I once heard an executive at a past employer remark “Disagree and commit” during one contentious meeting.)
Customer Obsession is one that Amazon founder Jeff Bezos has stressed repeatedly over the past three decades. This is how Amazon describes it:
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
For all of the valid scrutiny of Amazon’s labor practices and how it treats the third-party merchants that sell through its site, I long believed and respected this ideal of customer obsession. And I consistently heard from current and former Amazon employees during many years of reporting on the company that they tried to live this motto in their day-to-day work.
But as one of the journalists who has covered Amazon the closest over the past decade, it’s become clear to me that Amazon’s customer obsession is dissolving, creating not only a risk to Amazon’s future success – but also a monumental opening to rivals. Yes, even as the company continues to host Prime Day.
This, I want to be clear, is not a gut feeling. This is a relatively straightforward account of judging Amazon by its actions. Below, you’ll find a non-exhaustive timeline of those actions. And in a nod to Amazon’s Leadership Principles, I’ll work backwards from the present:
June 2023
The Federal Trade Commission sues Amazon, alleging that the company’s website design dupes some customers into signing up for the Prime membership program (and also makes it too hard to cancel a Prime membership).
Two things can be true. Yes, many people love their Prime membership. But it can also be true that Amazon’s tactics have been unbecoming of a supposed customer-obsession company, even if they never are ruled to be illegal.
April 2023
The Information reports that Amazon has started charging customers fees for some types of returns that were previously free. Amazon helped birth the expectation of free returns for just about any online purchase, but has now started pulling back as part of a broader cost-cutting spree under Jeff Bezos’ successor Andy Jassy.
January 2023
Amazon raises the free delivery threshold on Amazon Fresh grocery orders for Prime members in the US from $35 (or $50 in New York City) to $150. Years earlier, while Amazon began charging Prime members a new $9.95 delivery fee for Whole Foods deliveries, Amazon Fresh deliveries remained free with a low order minimum. But as I reported in my new book Winner Sells All, Amazon Fresh appeared to raise the individual prices of grocery items beyond inflation rates between 2021 and 2022, seemingly instead of adding a delivery fee. But then in 2023, Amazon drastically increased the free-delivery order threshold for Amazon Fresh anyway.
November 2022
The growth of sponsored ad listings on Amazon continues. The sponsorification of the Amazon product search experience has been a years-long evolution, but I marked this evolution on the timeline based on when I published a Vox feature article on the topic.
It is true that many brands and manufacturers pay retailers for special placement on shelves in the brick-and-mortar retail world. But the difference to me is that Amazon’s customer obsession has long implied a better way to display and surface products to shoppers. Maybe it would come through Amazon’s “organic” search algorithm. Maybe it would result from the creation of “Amazon’s Choice” labels.
Instead, Amazon essentially outsourced the curation of the increasingly unwieldy Amazon shopping marketplace to the highest-bidding brand or reseller. That doesn’t feel like a customer-obsessed decision, however profitable it is for the company (or my friends at agencies that help brands advertise their goods on Amazon).
September 2022
Prime members in a wide range of geographies across the US complain that they no longer have access to two-day delivery speeds as promised. A former Amazon corporate employee who led data analysis work in logistics and transportation divisions found significant Prime shipping slowdowns in one-third of the counties across Amazon’s home state of Washington. At the time, Amazon denied widespread issues with Prime delivery speeds when I asked them about the complaints. Just a few months earlier, the company had raised the annual price of a Prime membership from $119 to $139.
October 2021
Amazon begins charging Prime members a $9.95 fee for deliveries from Whole Foods stores. For years, these deliveries were “free” for Prime members following Amazon’s 2017 acquisition of the organic grocery chain.
Late 2020
Employees working at some Amazon Books stores allege that their managers often signed customers up for free trials to services like Prime and Audible without getting their full consent first, according to reporting I conducted for my book Winner Sells All. "A consistent pattern like this does real damage to a brand's reputation and business," one store employee wrote in an email to management at the time. "But more to the point, it is unethical; to trick or defraud a person into receiving something they didn't choose is wrong and shouldn't be something we allow or condone at Amazon."
You probably get the idea.
Some may wave away a few of these decisions as the right business moves, or no different than what Amazon’s competitors might do. Others might point to faster delivery speeds on Prime orders where they live as a sign of a still-customer obsessed company. But Amazon has long stood out in the minds of shoppers by going above and beyond its rivals in every imaginable way – not just in one or two. And the Amazon of recent years simply no longer does.
Great analysis.