Amazon yesterday announced that customers have ranked the company #1 in the ACSI (American Customer Satisfaction Index) that was just released. Boasting a score of 86 from a survey of 10,000 customers to measure how they perceived quality and value in the retail space, Amazon is now practically wearing a garland of accolades.
After winning three Oscars for Amazon Studios’ work on Manchester by the Sea and being ranked #1 in the Harris Poll for “corporate reputation,” this is Amazon third big win in a very short period of time.
The awards and ranking are not only proof of Amazon’s excellence in several areas, but from a corporate goal perspective, it’s a validation of founder and CEO Jeff Bezos’ obsession with customers.
His response to the ACSI ranking: “Customer obsession is the very heart of our approach, and it’s energizing to see customers respond. Thank you to all our customers and big congrats to the entire Amazon team.”
The ACSI’s annual report for 2016 put Amazon at the top of the Internet retail segment. Costco came in first in the Specialty Retail Store segment, with a score of 83, while Dillard’s topped Department and Discount Stores, also with a score of 83.
Amazon’s ranking in this year’s ACSI is a follow-through on the past several years, where the company nabbed the top spot in Internet Retail. While that tells us a lot about the retailer’s commitment to and passion for customer satisfaction, this year’s results are a re-validation of that commitment and passion.
It’s not surprising that Amazon has been topping the ACSI benchmark in the Internet Retail space for several years now. The segment doesn’t pit Amazon against brick-and-mortar retailers, and it’s obvious that Amazon has very few serious competitors in the online retail space in the United States.
However, the fact that they have been able to stay on top despite the scale they’ve achieved over the past few years. And most of Amazon’s growth over the past year has been because of its Prime service. As stated by Jeff Bezos in the Q4 2016 earnings report (emphasis ours):
“Our Prime team’s customer obsession kept them busy in 2016. Prime members can now choose from over 50 million items with free two-day shipping — up 73% since 2015. Prime Video is now available in more than 200 countries and territories. Prime Now added 18 new cities, which means millions more members now get one and two hour delivery. New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more. And customers noticed — tens of millions of new paid members joined the program in just this past year.”
Despite hitting $136 billion in 2016 revenues, the company continues to grow at a breakneck pace. Their 2015 revenues came in at about $107 billion, which means a year-over-year growth of 27%. You don’t grow at such strong double-digit rates if your customers aren’t happy with your offerings.
By introducing things like voice shopping, Alexa integration into smart electronics products from other companies and piling on the benefits for Amazon Prime members, the e-tailer is really stretching the boundaries in every direction it can.
North America retail now accounts for nearly $80 billion ($79.785, to be precise) in revenues, and is still the largest earner for the company. AWS is slowly catching up, but there’s still a long way to go from the 2016 revenue figure of $12.219 billion. However, AWS is far more profitable than any of Amazon’s retail divisions, and will continue to bring the most money to the bottom line for the foreseeable future.
AWS is now essentially a new cash cow for the company’s retail expansion plans, which include entering the physical space with the Amazon Go “automated” stores that they’re testing out. In addition, it gives them the cash flow they need to keep the goodies coming to Amazon Prime, their original cash cow.
And with Amazon Alexa being the third monetary bovine in question, the online retail and technology major now looks all set to break a lot of sales and profitability records over the next several years.
SEE RELATED ARTICLE: Amazon’s Strategy for Growth – Prime, AWS and, Now, Amazon Alexa
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