(Reuters) - Amazon.com Inc packages ordered by its Prime members regularly arrived late during the holidays, a Reuters/Ipsos survey shows, reflecting the strain on the logistics network that transformed the company into an e-commerce powerhouse.
Customer satisfaction with Prime is extremely high - 96 percent are happy with its two-day shipping service, the survey revealed. But the results raise questions for Amazon as it expands and takes greater control of its shipping system.
Amazon said the survey was flawed and disputed its findings.
The $99-a-year service was launched a decade ago with the guarantee of standard, reliable two-day shipping on online orders. Prime has since become the cornerstone of Amazon's growth - and a testing ground for new services ranging from TV and video to delivery-by-drone.
Amazon said U.S. Prime memberships increased 50 percent last year. Analysts reckon that the largest U.S. online retailer now promises standard two-day shipping to what amounts to nearly one-third of U.S. households.
In the Reuters/Ipsos poll conducted last month, 10 percent of about 1,700 Amazon shoppers who chose the two-day shipping option said packages ordered between Nov. 1 and Dec. 31 did not arrive on the expected day.
Greg Greeley, head of Prime, said the Reuters figures on delay sounded "very suspect" and that Amazon monitors the issue very closely.
"Our internal data shows significantly better results," an Amazon spokeswoman added, without providing specific figures. "But any miss is an error and we continue to work very hard to ensure fast, reliable and accurate delivery for customers."
The survey figures reflect the complexity and high cost of shipping orders from distribution centers to customer's homes -the so-called "last mile."
"As Amazon keeps raising the bar, it keeps raising the business risk for itself because the last mile is a messy place," said Bhaskar Chakravorti, senior associate dean for international business and finance at Tufts University's The Fletcher School.
Satisfaction rates could erode if the late shipping problems continue, said Hayley Silver, a vice president at e-commerce researcher Bizrate Insights. “Some customers will remain Prime members because they love the other aspects Prime offers them. Some may not because on-time delivery was the most important thing to them,” she said. Others will simply order earlier, Silver added.
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(Reuters) - Amazon.com Inc packages ordered by its Prime members regularly arrived late during the holidays, a Reuters/Ipsos survey shows, reflecting the strain on the logistics network that transformed the company into an e-commerce powerhouse.Customer satisfaction with Prime is extremely high - 96 percent are happy with its two-day shipping service, the survey revealed. But the results raise questions for Amazon as it expands and takes greater control of its shipping system.Amazon said the survey was flawed and disputed its findings. The $99-a-year service was launched a decade ago with the guarantee of standard, reliable two-day shipping on online orders. Prime has since become the cornerstone of Amazon's growth - and a testing ground for new services ranging from TV and video to delivery-by-drone.Amazon said U.S. Prime memberships increased 50 percent last year. Analysts reckon that the largest U.S. online retailer now promises standard two-day shipping to what amounts to nearly one-third of U.S. households.In the Reuters/Ipsos poll conducted last month, 10 percent of about 1,700 Amazon shoppers who chose the two-day shipping option said packages ordered between Nov. 1 and Dec. 31 did not arrive on the expected day.Greg Greeley, head of Prime, said the Reuters figures on delay sounded "very suspect" and that Amazon monitors the issue very closely."Our internal data shows significantly better results," an Amazon spokeswoman added, without providing specific figures. "But any miss is an error and we continue to work very hard to ensure fast, reliable and accurate delivery for customers."The survey figures reflect the complexity and high cost of shipping orders from distribution centers to customer's homes -the so-called "last mile.""As Amazon keeps raising the bar, it keeps raising the business risk for itself because the last mile is a messy place," said Bhaskar Chakravorti, senior associate dean for international business and finance at Tufts University's The Fletcher School.Satisfaction rates could erode if the late shipping problems continue, said Hayley Silver, a vice president at e-commerce researcher Bizrate Insights. “Some customers will remain Prime members because they love the other aspects Prime offers them. Some may not because on-time delivery was the most important thing to them,” she said. Others will simply order earlier, Silver added.SPEED MERCHANTS
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