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A Warning to Amazon

Here is a great opportunity for Amazon to do the expedient thing, or to be bold, break out and do the things that will set them apart from everyone else in their space. I will be watching very closely at how they integrate the acquisition of Zappos.

Zappos is an online retailer of shoes. If you have not bought shoes from Zappos, you are missing the absolute, unequivocal, undisputed best online shopping experience. This company does customer experience the right way. In fact, the first item on the list describing their company culture is “Deliver WOW through service.” They even have videos on their website with customers describing the service. (Disclaimer—the number of packages traveling between my home and Zappos might qualify me for a seat on their board of directors)

Along comes Amazon with the intention of acquiring Zappos. Don’t get me wrong, Amazon’s customer experience and customer service is fine. But, it is not exceptional and it is not nearly the differentiator that it is for Zappos. So, Amazon has some choices to make when they integrate Zappos.

Choice 1—Enjoy “synergies” (read as, reduce costs) by folding the Zappos business into the Amazon processes. This will be more efficient in the short-run for sure. It will also have the powerful effect of removing the very thing that has made Zappos so successful. It will make Zappos’ customer experience “satisfactory.” Not a lot of WOW in satisfactory.

Choice 2—Let Zappos operate on its own and don’t change a thing. OK, this is good for Zappos and its customers, but there is no real value added by putting the companies together. Shareholders and customers haven’t gained anything; the companies are just continuing like they did before the deal.

Choice 3—What if Amazon integrated the two companies the way that customers and shareholders would really like it to be done? What if the best processes of Amazon were maintained and transferred to Zappos and the best of Zappos were maintained and transferred to Amazon? Everybody wins!

I know it sounds obvious, but it never happens this way. Here’s why…the acquiring company, Amazon in this case, has too much invested in the way things are currently being done. The have money invested certainly, but the real rub is the amount of pride invested in “that’s the way we do it.”

So, let’s watch and see what approach Amazon takes. And I know what the press release says about their intention, but does anyone really take press release quotes seriously? Will they take the approach that rewards shareholders and customers? Will they take the approach that will make us say “WOW!” to the customer experience with Amazon like we currently do with Zappos?

Maybe Amazon should really understand what, in the eyes of customers, makes the experience at Zappos so good. Here’s a warning, Amazon. Don’t take the easy way out. WOW us!

About the Author

Phil Bounsall

Phil Bounsall

As president at Walker, Bounsall is focused on the development and execution of strategies and operating plans designed to enhance Walker’s position as a global leader in customer intelligence. Bounsall also works with Walker’s client service teams to help meet the needs of Walker’s clients.

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