Internet retailer Amazon is facing a backlash from customers after it announced its intention Thursday to increase the price of its Prime shipping service by $20, from $79 to $99 per year, with CNBC quoted as saying that “shopper backlash may have been more severe than expected.”
The move has been panned by customers and Amazon lost the top spot for online retailers on the latest Brand Keys customer satisfaction survey, a slot that Amazon has ruled for 16 years since Brand Keys created it.
Amazon dropped from 93 percent to 83 percemt after the price rise, and this drop moved it from first to third — behind online auction site Ebay and Overstock.com
Amazon’s premium prime service gives shoppers free two-day shipping for a multitude of goods, access to its digital streaming library of 40,000 movies and TV episodes as well as a loan library of half a million kindle books. It has long been considered by many as one of the best shopping deals on the web, especially for heavy users of Amazon. Despite still offering a swath of services for the new $99 price point, the price rise has gone down very badly with customers.
Founder and President of Brand Keys Robert Passikoff explains, “Consumer expectations are always on the increase, and when it comes to online retail, they operate in a ‘what-have-you-done-for-me-recently?’ paradigm. Price increases weren’t what prime members were expecting. Based on immediate prime member reactions, they may have underestimated the negative effects of the increase.”