Low Prices vs Great Service – which will win in the battle for our wallets?

Can Jet break my Amazon habit? That’s what the new ecommerce site is aiming to achieve now they have finally launched. Their plan is to eventually charge a $50 membership that will give access to prices that beat their giant rival. For the moment those subscriptions are free, to encourage new members.

But Jet faces a long uphill battle. Amazon has been around for a couple of decades honing their business model, which famously reinvests an enormous amount of profit back into improving the business each year. They keep on investing vast amounts to ensure they stay the market leader.

I know that I personally am loyal to Amazon and that’s about more than price alone. I was struck when I read what the Amazon founder and CEO, Jeff Bezos, said about customer service: “The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to you. It just works.”

This captures the essence of what Amazon does nicely. Innovations such as one-click payment have entirely redefined ecommerce and made the online shopping experience pleasant and something that can take seconds – or be an enjoyable browse taking hours.

Amazon has long moved on from selling just books and movies. Their product range is now so vast it’s almost a one-stop-shop for anything. I know that it’s usually the first place I look, whatever I want to buy.

They have created a perfect balance where everything the customer wants is on offer and the customer service is so good that you almost never need to get in touch. The system just works. In the past 5 years, as a regular customer, I have only needed to contact them once and the fault that time lay with the courier.

Payment is simple, delivery is simple, and returns are simple. It’s a textbook example that shows how great service and service simplicity will drive repeat business. Customer loyalty is created because of the great shopping experience.

A rival, like Jet, may offer lower prices, but if they cannot match this kind of shopping experience – and even improve on it – then I won’t switch. If I won’t switch, perhaps many others won’t eitherAnd then there’s Amazon Dash, what will Jet answer that with?

Time will tell. Jet clearly believes that there is a more price-sensitive market that they can target, which means they believe that Amazon customers are less focused on price. Instinctively I think they might be mistaken, but who knows? Amazon itself will probably relish the competition, but with so many years honing the Amazon customer experience Jet has a big challenge ahead.


Photo by Sascha Kohlmann licensed under Creative Commons

This entry was posted in Current Affairs, Customer Service, Retail, Strategy and tagged , , , , , , , , . Bookmark the permalink.

1 Response to Low Prices vs Great Service – which will win in the battle for our wallets?

  1. Pingback: Will Fresh Ideas From Amazon Change UK Retail Forever? | Teleperformance UK

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