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A survey released by PYMNTS , which measures the level of satisfaction of American consumers, noted the decline in Amazon customer satisfaction , reaching one of the lowest levels in the retailer's history.

This blow to the company's leadership, which for nearly three decades has been defined by its obsession with customers, comes as no surprise to the retailer, which last year had its worst result in the index (78 out of 100), becoming its lowest point in history.

The index began tracking company data from the year 2000.

The report also showed that the number of Amazon customers who top benefits of using fusion database said they were " extremely satisfied " or " very satisfied " with the company dropped to 79% this year.

That number was slightly higher than during the pandemic (65%), but still below the company's peak 10 years ago, which already reached an 88% satisfaction rate.

Why is this happening and what lessons can marketers learn from this situation? Let's answer these questions in this article!

Even with falling numbers, Amazon continues to lead
Despite indices showing clear signs of growing customer dissatisfaction with the company, Amazon continues to dominate the retail scene, surpassing its biggest rival, Walmart , and leading with almost 45% of US e-commerce in the second quarter of the year.

One of the reasons experts give for Amazon's continued leadership in this market is the quality of the products the company offers.

According to PYMNTS, “ e-commerce retailers like Amazon provide detailed product information and reviews so consumers can confidently purchase durable goods online without having to visit physical stores to obtain this information .”

The company also held the leadership position in articles for:

sports, hobbies, music and books (56%);
electronic products and household appliances (54%);
health and personal care (43%).
It is a big challenge to remain the largest online retailer in the country, with more than 200 million users worldwide who pay for Amazon Prime subscriptions; a service that offers its subscribers:

faster product shipments;
discounts and access to first-hand promotions;
access to the company's streaming service.
PYMNTS data makes this leadership of Amazon clear, which, as of the fourth quarter of 2022, held a 15% share in this segment, slightly above the same period in 2021, while its competitor, Walmart, saw its share fall.

The study therefore shows that Amazon remains the top destination for American consumers, accounting for nearly half of all online transactions in the second quarter of 2021 and 2022 in the United States.

The pandemic was a key factor in increasing Amazon's dominance in online commerce.
Although Walmart has long dominated consumer retail spending share, that number has been declining over the years.

Amazon peaked at 8.1% in Q4 2021 in retail consumer spending, while Walmart fell to 8.2%.

In terms of total consumer spending, Amazon is slightly ahead of Walmart with a 3.1% share in Q2 2022 versus 3% for its main competitor.

These changes are very significant, as it was during the 2020 pandemic that Walmart fell and Amazon thrived as consumers began to make more purchases online, driving the company's growth over the past two years.

Another key factor for Amazon's growth and dominance in the online market is its extensive service capabilities, ease of payment, and vast resources related to product shipping logistics:

Amazon controls all shipping, ordering, packaging and delivery of its products, helping it position itself ahead of Walmart in the race to increase market share and more consumers online.
Some data can help to see the force that the pandemic scenario had in making this happen:

In Q1 2019, Amazon accounted for 8.7% of consumer discretionary spending, and in Q2 2022, this share reached 14%, having peaked (17%) during the pandemic in Q4 2020;
Amazon continues to gain ground in the furniture market, achieving its highest market share of 11.8% during the fourth quarter of 2020, while Walmart occupied 7.9%. As of the second quarter of 2022, Amazon's market share is 10%, while Walmart stands at 7.3%.
And once again, this market dominance is attributed to the growing consumer interest in online shopping, fueled by the pandemic, and also the convenience of the Amazon Prime service — for subscribers — which facilitates free delivery of various products to buyers.

Walmart also leads in some segments
While Amazon leads in some segments and in consumer discretionary spending, Walmart, which is known for its lower prices, continues to maintain its lead in the personal care and health segments.

In addition, it has a larger share in food and beverages, with a market share of around 15.6%, compared to 2% for Amazon, the leader when it comes to grocery sales.

Not everything is a bed of roses…
The results of this investigation come at a time when Amazon has just announced a wave of employee cuts and a hiring freeze that is expected to extend until 2023.

It is a fact that the pandemic has accelerated the widespread adoption of e-commerce and online shopping, favoring Amazon, but in 2022 the economy began to lose steam, reaching record levels of inflation in the US and causing a market crash.

…and Amazon customer satisfaction continues to decline
According to an Amazon spokeswoman, customers are not very satisfied with the experience the company offers. Among the various consumer complaints, customer service, for example, has been highlighted as an issue at the retailer.

While the company has worked in recent years to improve the way customers find products on the site, search results have also been frustrating for consumers.

This is because Amazon has increased the number of third-party sellers using its platform, adopting advertising to rank higher, which affects the clarity of search results.

“ For 20 years it was customer obsession at all costs, now customer obsession is for fair cost ,” said Guru Hariharan , a former Amazon manager and CEO of e-commerce services provider CommerceIQ.

According to the WSJ , some Amazon shoppers have expressed disappointment with their shopping experiences at the company, even as they continue to view it as an essential part of their lives.

One of those interviewed is Ken Higgins, 48, who has been an enthusiastic Amazon Prime member since the service launched in 2005, but several current experiences with the company are leaving him frustrated.

Recently, I tried to make a purchase on Amazon again, but when I searched for the item on the website, I couldn't find it, despite typing in the model number and finding it in other stores.

After a different search for a baby walker, she purchased one with the promise of two-day shipping, but delivery took a week.

“ Amazon is so big now that it has the power to say take it or leave it. It seems like they cared more before ,” said Higgins, who lives in Tallahassee, Florida.

Another WSJ interviewee, Jackie Guerrero, an Amazon customer in the San Francisco area, said she recently waited two weeks for a watch and then Amazon emailed her to say it was impossible to deliver, leading to several attempts to reach someone at the company for a refund.

The company is aware of this drop in customer satisfaction levels and has been working to improve the user experience on the site, creating more personalized algorithms, with the aim of obtaining more satisfactory search results for the consumer.

According to an Amazon spokesperson, the company spent nearly $1 billion last year to combat counterfeiting, product review, and other issues within its platform , and is also looking to exceed its customer service goals via chat, responding to 80% of chat support requests in 30 seconds or less, and phone calls, with a goal of answering at least 80% of phone calls within 60 seconds.

What can brands learn from this story?
No matter the size of your business, you can never take anything for granted when it comes to customer satisfaction. If your business has grown a lot in recent years, it's because your customers have helped you achieve it. Therefore, you should continue to give back to those people who are an important part of your brand's success.

Big companies like Amazon and Walmart seem to have so much power that they don't need to worry about individual customers. But as we've seen, it only takes a bunch of customer complaints for it to snowball into criticism.

So, yes, you need to care deeply about your customers’ experience!

Especially after the purchase, you want to make sure they feel respected and have a personalized experience. After all, you want them to come back for more purchases.

And we're not even talking about customer reviews. If you can create a customer experience so good that people willingly say amazing things about your brand, you're generating valuable content for yourself. And there's no better marketing than a recommendation from someone we trust.