What Costco Overtaking Amazon in Customer Satisfaction Means to Marketers
Now that the first quarter of 2019 is over, there’s one company (in particular) that has a few of us as confused and contemplative as the iconic business baboon. Hint: This retail giant is no longer No. 1 in customer satisfaction.
Let’s see if you can guess which industry giant we’re talking about with these clues.
Which company saw the following recent headlines?
- ________ $140 billion divorce: What you need to know.
- ________ pulls out of planned New York City headquarters
- Costco tops ________ as the new king of Internet retail
If you chose Amazon and/or Jeff Bezos — then you’re right! Alexa is so proud of you!
The online shopping giant had a busy Q1, and it seems that the drama will continue through this year. Our team wanted to take a look at a few moves Amazon made that will have the biggest impact on retail, shopping and e-commerce, moving forward.
Amazon to Close Pop-Up Kiosks
Remember in 2014 when Amazon began opening its tech kiosks in failing malls? Well recently, Amazon announced it would be closing all 87 of its pop-ups that were littered across local malls, Kohl’s and Whole Foods stores.
This is important for a few reasons.
- All of Amazon’s brick-and-mortar concepts (Amazon Go, Amazon 4-star, etc.) are experimental.
- Their purpose is to collect data on new/existing customers to better hone its approach.
- By taking small steps in and out of physical retail, Amazon can refine its strategyand avoid large, and potentially costly, mistakes.
Costco Tops Amazon as the New King of E-commerce
According to the latest "Retail and Consumer Shipping" report from the American Customer Satisfaction Index, Costco took first place in the Internet retail category. This ends Amazon’s decade as the frontrunner in this category.
Taking a closer look, here’s what this means for e-commerce marketers and the overall retail industry.
- Despite the 2017 Whole Foods acquisition, Amazon still faces deep competition from retailers (Costco and Walmart) that have successfully cornered the grocery industry.
- Costco’s success with annual membership growth and renewal could be a guidepost for how Amazon utilizes its Prime memberships in the future.
- Connecting online and in-store experiences to keep customers happy online and coming back to warehouses will define the future of commerce.
Amazon Pay Integrates With Worldpay
Worldpay processes transactions worth roughly $1.2 trillion per year — making it one of the largest payment technology providers on Earth. And recently, Worldpay announced it will be offering Amazon Pay as part of its payment and shipping options to its customers.
This headline was mostly overshadowed by the fact that Fidelity National Information Systems spent $43 billion to acquire Worldpay. Regardless, Amazon’s partnership with Worldpay is notable for a few reasons.
- This helps Amazon bring in more transactions under its Amazon Prime subscriptions.
- This move allows Amazon to layer on further services into the mix of merchants.
- Third-party merchants could be added to extend its retail footprint even further.
So What Do All of the Headlines Mean to Marketers?
AMAZON, 1998: hello we sell books but online
AMAZON, 2023: please return to your Primehouse for your nightly Primemeal, valued Primecitizen
— professor keenbean from the richie rich movie (@KrangTNelson) June 16, 2017
What we’ve realized is that reading these headlines is like a game of chess. Each move Amazon makes is part of a bigger strategy to extend its reach beyond online shopping and into physical stores. It’s no surprise that Amazon wants to dominate brick-and-mortar retail — it’s just taking its sweet, methodical time doing it.
What do you think? Will we all be living in an Amazon-dominated world as early as 2023?
If you’re like me, tracking all these moments will have you primed and ready for the Jeff Bezos world leader biopic. You’ll be streaming it off your Amazon Fire AR glasses, while hanging out with your holographic Alexa.