Reuters Blogs

Shop Talk

Retailers, consumers and prices

February 20th, 2007

Watch out eBay — Amazon is coming

Posted by: Alexandria Sage
Tags: Uncategorized

amazon.jpgEBay may have the online auctioneering game covered, but it should be looking over its shoulder at competitor Amazon.com, according to a recent consumer report.

Online retailer Amazon.com is doing a better job at customer satisfaction, according to the American Customer Satisfaction Index released on Tuesday by the University of Michigan and ForeSee Results. That should be worrying for eBay as the two leading online businesses increasingly intersect, said the head of ForeSee results, Larry Freed.

The survey gave eBay a score of 80 to Amazon’s 87.

With more third-party sales of used goods on Amazon’s site, and eBay selling many brand-new and direct-from the retailer items, the lines between online auctioneers and retailers have become increasingly blurred, said Freed.

“EBay will need to bring more innovation to satisfy customers like more traditional retailers do,” Freed said. The report did acknowledge that eBay has limited control over customer satisfaction due to its business model of individual transactions between buyers and sellers.

Spending on loyalty programs with customers has crimped Amazon’s net profit in recent quarters. A discount shipping program, Amazon Prime, and spending on technology to make its Web site easier to navigate have proven expensive.

But some analysts say that Wall Street does not fully appreciate Amazon’s customer-service focus.

“Amazon is singularly focused on one extremely important constituent — its customer — and we believe that this attitude toward its business may be its most valuable hidden asset,” wrote Stifel Nicolaus analyst Scott Devitt in a research report earlier this month.

The survey results show that the online commerce segment, whether retail, auction, travel or brokerage sites, outpaces other segments when measuring customer satisfaction.

Barnes & Noble was the overall winner in the e-retail category with a score of 88.

4 comments so far

I believe it to be a classic example of strategy vs operational efficiency, as described in one of the classic artcles writen by Porter. Amazon is targeting another set of values than ebay, but i guess considering their business model being different from Amazon, a score of 80 still looks better.
Anuj Varshney
Baruch college

- Posted by Anuj Varshney

I guess e-commerce will be the way to go in a few years time. I haven’t tried it yet, though. I just shifted to Windows Vista and I’m quite worried that it’s not as secure as XP. I got rid of compatibility problems already courtesy of the drivers from http://www.radarsync.com/vista. Now if only somebody from Microsoft or a reputable PC magazine would categorically state that conducting e-commerce on Vista is absolutely safe.

- Posted by sonia

Amazon hold strong brand that can be enough to beat eBay.

- Posted by Bob

Amazon can takeover and have ebay forgotten at any given point. They just don’t feel the need to rush anything.

- Posted by Kinpo

Post Your Comment

*
To prove you're a person (not a spam script), type the security word shown in the picture. Click on the picture to hear an audio file of the word.
Click to hear an audio file of the anti-spam word