The Prime Issue With Amazon

Amazon’s e-commerce sales in the U.S. are expected to reach a staggering $258.2 billion this year, up nearly 30 percent from a year ago. If Amazon can reach these numbers, they will own nearly half of the U.S. e-commerce market by the end of 2018. As the numbers show, Amazon is as we would say–very Irresistible. But we saw this week that when they stumble they have a long way to fall.

For the last few weeks, Amazon aggressively marketed “Prime Day”. It was projected to break records again, surpassing the tens of millions of Prime members who shopped the discounts last year. Wall Street expected higher sales and a higher share price for Amazon as a result. Projections for their sales was up to $3.4 billion within a 36-hour window, but the glitches that occurred on Monday put those numbers in jeopardy.

Right around 3 p.m. ET, when the Prime sales were supposed to start, people received error pages with the “dogs of Amazon” and were unable to reach the site. Some users successfully added items to their cart, only to receive an error message when trying to check out and complete the purchase. Others say the Deals page and Shop all Deals button both disappear. Shares of Amazon fell off immediately, falling about 1 percent in after-hours trading.

It took Amazon about an hour to respond and when they finally did, they acknowledged that people that were having problems, but said, “Many are shopping successfully”. Not much of an apology for some customers.

Around 7:30 p.m. ET on Monday night, we checked our live I-Factor® tool and it showed us that people were still angry. We collected 1356 tweets on Amazon in just  60 seconds. Their positive I-Factor was 46, while Papa John’s (who is having its own major PR crisis right now without the Irresistibility of Amazon) was above Amazon with a 48.

Unfortunately for Amazon, the Prime Day glitch brought a ton of attention to another bad story.  On Monday, nearly 1800 Amazon workers in Spain went on strike and thousands of more in Germany walked off the job on Tuesday. This after hundreds of Amazon workers in Italy and Germany went on strike in November saying they were under high pressure to create more and more in less time. They are striking for better working conditions, pay, and health benefits.

Ironically, on the same day, Jeff Bezos officially became the richest person in modern history, topping a net worth of $150 billion. Senator Bernie Sanders used Prime day, and the news of Jeff Bezos’ salary, as an opportunity to host a “CEOs vs Workers” panel where he spoke with employees from Amazon, Disney, McDonald’s, American Airlines, and Walmart to address the wealth of corporate executives and the wages and treatment of companies’ workers. He tweeted about it relentlessly. There were wide calls on social media to boycott Amazon, and because of the Prime Day glitch, exponentially more people saw the posts (including me) than would have before.

We have seen this before.  One slip up can set off a massive chain of events and cause a brand’s Irresistibility Scores to tank. Will Amazon suffer the same struggles as another brand that took a dive with consumers, Chipotle. We’ll be paying attention to see what happens next.

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