Jeff Kagan: For Shoppers, Amazon.com Prime Day was a Flop

Jeff Kagan |

Amazon_Prime.jpg

Christmas in July has always been a retailers and customers dream. Amazon.com, Inc. (AMZN) tried it this week with Prime Day. Unfortunately, this first Amazon Prime Day was a flop for too many customers. But even though the dream turned into a nightmare for many, how did Amazom.com do?

It will be interesting to see what Wal-Mart Stores, Inc. (WMT)  says about their experience to see their results. I have a feeling Christmas in July is coming, and these are very early days in the process. Hopefully that will mean it will get better for the shopper because while this first Prime Day was a great idea, it fell flat on it’s face.

Prime Day Autopsy: What Went Wrong?

We have to look at Prime Day from several different perspectives. When I say Prime Day was a flop, I mean from the customer perspective, as so many complained loudly on social sites and in the media. This is not to say everyone had a problem. People who did get the limited sales items are likely delighted.

The problem today is Amazon.com is too large, too well known, has been around too long and has too many customers to screw up this badly. This is the kind of screw-up companies had in the 1990’s when Internet shopping was still young. This PR disaster would cripple other companies. However, with Amazon.com, I don’t think this will be a long-term problem beyond the initial burst of customer complaints, which is overloading social media.

If any company keeps screwing up like this, it will have a long-term impact, even on Amazon.com. However, I think this one will pass, especially if Amazon gets better as time goes on.

Today, customers love Amazon.com too much, and they know Amazon.com loves them to, as much as any retailer can love a customer. Amazon is strong in the minds and hearts of the marketplace. This will buy the company the ability to let this be a close call and not a direct hit.

So I don’t think this will have a long-term negative impact on the stock price or value to the customer in the marketplace unless it continues. I believe customers will complain, but will ultimately give Amazon a free pass on this screw-up. That said, there is a limit to customer goodwill.

Building a quality relationship with customers and investors is always a long-term process. Amazon.com may get investor complaints from time to time, but generally speaking, customers love them. Plus, they are continuing to roll out new technology and ideas to make shopping easier. Consider the apps on smartphones and tablets.

Amazon.com changed the book business, then the retail business, and now they are changing the entertainment business. This is a company that tries so many different ideas and wins with quite a few of them. They have a better track record than most competitors.

A Bad Day for Customers, A Good Day for Amazon?

Amazon.com has become a brand name that so many think of as a quick and easy way go get whatever they need. Prices are not a bargain like they used to be, but it does give customers a vast and easy shopping experience online.

It will be interesting to see what customers are looking for at this time of year. Unlike the holiday shopping season when we look for gifts, I get the strong sense that this time of year customers are shopping for themselves.

We don’t yet know how successful Prime Day was for Amazon.com in terms of sales and new sign-ups for their Prime service. However, I am sure this was a big win for the company.

Let’s hope the next Prime Day is better…much better.

Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 70.62 -0.05 -0.07 4,768,640
AMZN Amazon.com Inc. 739.07 -4.58 -0.62 2,948,571

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