Insights

Amazon’s Court Loss = Customer Experience Win

Amazon loses case and Customer experience wins

In an unprecedented ruling on Wednesday, the 3rd US Circuit Court of Appeals in Philadelphia has ordered against Amazon.com Inc. in a case where a dog collar was sold on its website that partly blinded a woman. The court ruled that customers can sue Amazon when they buy defective products from its platform, even if Amazon did not make those products.

This is the victory of ‘Customer Experience’ and it is the first time Amazon has lost a case like this. It should flip the panic button of various eCommerce giants to re-think upon their customer experience strategy.

Amazon’s Dream

“We want to be a place where customers can find and buy everything and our sellers are helping us get there…” -Chris Poad, Director, Amazon Business International at Amazon

Amazon aimed at being the one one-stop shop for the world. To achieve that dream, in the year 2000, Amazon launched its Marketplace. The solution allowed third-party sellers to use its technology to sell through it—where Amazon earns from each sale.

Today Amazon’s third-party marketplace is full of independent sellers hawking anything that can be sold. There are dedicated sites cataloging the unique and the absurd. And it is all good business for the behemoth. Amazon claims that 50% of its total unit sales come from third-party selection.

A Chink in the Armor

While the company makes a large profit by including third-party sellers in its business model, its policies and local laws have protected its stand of not being responsible when something goes wrong. While some situations can be corrected by replacements & refunds, in line with its much-touted “customer-first” strategy, it consistently maintains a no-liability position otherwise.

Over the years, encouraged by Amazon’s success, other eCommerce marketplaces have sprung up across the world. And they largely follow the same model, not accepting liability for the problems caused to customers by sales have gone wrong.

So while this court ruling is a great win for those fighting for the rights of customers, long before the court decided, Amazon had already lost the case in the court of its customers. And this is a big wake up call to all similar eCommerce marketplaces.

In today’s digitized world, ‘Customer Experience’ can decide the company’s success or failure.

Customer Experience is the Key to Business Growth

When a user buys something on an eCommerce platform like Amazon, they are not buying from platform, but on the platform. The platform company, Amazon, for example, would be selling on its marketplace as one of the many sellers. Usually, the platform auto-selects the lowest offered price since a single item for sale could be on offer by multiple sellers. And many of these sellers have their own source of products. Not all of them are genuine or the same quality.

Allowing a third-party vendor to use your platform to sell poor quality or counterfeit product brings the risk of tarnishing the brand identity you are trying to establish.

The reason it becomes difficult to deliver excellent customer experience after involving third-party vendors are:

1. Consistency

Consistency means delivering a great customer experience every time a consumer interacts with your company. And it includes addressing issues and scope changes that arise in a timely way.

Now, in the case of eCommerce platforms like Amazon, third-party vendors sell the products. After the sale of the item, the vendor deals with any issues related to the product quality. Frustrated customers in need of help, are talking to someone who isn’t an employee of Amazon.

Thus non-involvement of an eCommerce platform after the sale of product lowers the consistency of delivering excellent customer experience. Thus, it forces the customers to lose trust in it.

2. Shared Values

What values drive your organization? Your set values are your business’ USP and it attracts visitors to turn them into loyal customers.

Most of the third-party vendors lack the focus on a shared vision of what you’re trying to achieve. This lack of compatibility between vendors and the eCommerce platform hurts the sentiments of customers and they simply turn their back towards such brands.

Thus, to ensure consistency across brand channels, your brand must make sure that third-party vendors are aware of and contribute to your desired brand image.

Conclusion

One of the foundational goals of any Customer Experience strategy is to build a customer-focused brand experience. Customers expect a reciprocation of their loyalty. And that includes honoring the trust customers have placed in your brand when they shop on your platform.

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Abhay Vohra

About the Author

Abhay Vohra has more than 15 years of experience in the IT industry. Abhay started out with us as a Quality Analyst and moved onto the Business Analysis team, where he discovered his passion for Information Architecture, Wireframes, and User Experience. Now, he possesses an impressive experience in UX and has delved into User Research and Service Design. Abhay also happens to be a culture enthusiast and takes a keen interest in world cinema and literature.

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