During the coronavirus pandemic, Amazon could be a savior for shoppers. But the online retailer may be failing its "Day 1" survival test.
Three years ago, Amazon CEO Jeff Bezos opined on the importance of having a startup mentality if a business is to stay competitive. Losing this “Day 1” perspective marks the beginning of the end.
When companies lose their hunger and thirst for excellence, Bezos explained in a letter to shareholders, they find themselves in “Day 2.” This is where decay begins to fester; death is where this “excruciating” road ends.
Day 2 is stasis. It’s followed by irrelevance. Followed by excruciating, painful decline. Followed by death.
How does a titanic corporation keep that “Day 1” culture alive? Bezos says the secret lies in “delighting customers.”
There is no question that Amazon is playing a critical role in delivering vital supplies to those locked down in their homes.
But the online retail giant’s list of unhappy customers has rapidly ballooned as the world grapples with a health crisis. The company has made a series of missteps that would have been unthinkable just a few weeks ago.
One of Amazon’s most compelling selling points is the Prime program that offers customers expedited shipping times. A surge in demand has strained the company’s supply chain and left Prime subscribers feeling shortchanged.
Amazon suddenly has legions of disappointed Prime subscribers who are feeling shortchanged. These customers don’t have a quarrel with Amazon prioritizing essential items like groceries and medical supplies. But they are livid that delivery times are longer than ever.
And these aren’t just small inconveniences. Some customers are witnessing delays of as long as a month for Prime deliveries of in-stock items.
The shipping delays have persisted even after Amazon began hiring thousands of additional workers. The whole point of the Amazon Prime program was to win customer loyalty. These delays risk causing customers to turn their eyes elsewhere.
This could be a costly mistake for Amazon, given the large number of Prime subscribers in the U.S. In 2019, Amazon Prime ended the year with 112 million users.
Worse still, some customers are unable to shop for the items that Amazon has marked as essential products.
For subscribers conditioned to purchase anything they wanted on Amazon, the bubble has burst. Jeff Bezos had better hope they are not treated any better elsewhere.
So massive is the deluge of orders that Amazon is temporarily suspending the onboarding of new online grocery customers. These new shoppers will join a wait-list as the company struggles to serve existing users.
This is a wasted opportunity for Amazon. These desperate grocery shoppers cannot wait for the online retailer to solve its problems. These lost customers will turn to competitors, and they may never come back.
No doubt the coronavirus pandemic is overwhelming businesses and governments alike. But Amazon’s shortcomings are becoming visible at a time when its customers need it the most.
The dreaded “Day 2” may have finally arrived for Jeff Bezos.