Amazon Sees Backlash Among Prime Members
By Krystina Gustafson, CNBC
For today's demanding online shopper, free shipping isn't a nice thing to have, it's a must.
So when Amazon announced Thursday that it would raise the price of its Prime membership from $79 to $99, a Brand Keys survey found that shopper backlash may have been more severe than expected. According to the company's survey, which measures brand engagement and customer loyalty, Amazon's rating fell from 93 percent to 83 percent following the price increase.
"Based on immediate Prime member reactions, they may have underestimated the negative effects of the increase," said Robert Passikoff, founder and president of Brand Keys.
"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," he said.
Amazon has been ranked as the No. 1 online retailer since Brand Keys began measuring the category 16 years ago. But among the Prime audience, it is now ranked third, behind Ebay and Overstock.com, Passikoff said.
The survey was conducted among 1,050 Prime members from March 14 to March 16.
Amazon did not immediately respond to request for comment.