Why are consumers are happy with Amazon’s services?

SERVQUAL (Service Quality) model or service quality gap model is applied to explore the gaps and recognize different factors that result in a difference between expected services by consumers and the actual services being provided by the company (Wang et al., 2015).

  • Delivery gap,
  • communication gap,
  • knowledge gap,
  • customer gap and, policy gap are the five gaps that are suggested by this model.

Amazon is a multinational giant which has its operations extended from e-commerce to cloud computing and artificial intelligence (Amazon, 2019). Amazon is one of the leading revenue generating business across the globe with a revenue generation of 232.887 billion USD in 2018. The business operations of Amazon would be analyzed for their service quality in this article on the basis of five dimensions of SERVQUAL model; tangibles, reliability, responsiveness, assurance and empathy.

Impact of Tangible dimension

This dimension outlines the equipment, physical facilities, communication material and personnel (Wang et al., 2015). Above all, Amazon is one of the leading internet-based company of the world based on revenue generation. While, Amazon’s operations started with being an online book store and then diversified to video and audio streaming, software, electronics, video games, e-commerce, artificial intelligence, cloud computing, etc. With more than 600,000 employees working for Amazon in 2018, this retail giant caters across the globe (Statista, 2019). Furthermore, employees are one of the key tangibles dimension of the company. The table below depicts the growth in Amazon’s number of employees since 2010.

YearAmazon’s global employee strength
2010 33,700
2011 56,200
2012 88,400
2013 117,300
2014 154,100
2015 230,800
2016 341,400
2017 566,000
2018 647,500

Table 1: Increase in number of employees of Amazon since 2010; Source: (Statista, 2019)

Furthermore, communication is another dimension and Amazon uses a number of platforms to communicate with its customers. It can be broadly divided into two categories; traditional and non-traditional media channels. Traditional media include newspapers, magazines, radio, telephone and television. On the other hand, non-traditional media include social media and search engine campaigns.

When Kindle was released, Amazon ran several full-page ads in newspapers and magazines across the world. When Alexa was launched, Amazon ran several TV ads across the world to educate consumers about its uses.

Reliability dimension

Reliability explains the ability of the company to provide accurate and consistent services to the consumers (Ciavolino & Calcagnì, 2015). Amazon has ensured quality products to the consumers by suggesting guidelines and protocols to its sellers. The organization also emphasizes on their robust customer relationship management (Amazon, 2019).

Furthermore, the vision statement of Amazon also outlines focus on customer experience by facilitating them with low price offers a broad selection of merchandise and convenience. Amazon delivers to its promises such as giving information related to inventory and on-time delivery. This tech and retail organization also focus on the significance of technology advanced analytics to identify the wants of its consumers.

Impact of responsiveness dimension on consumers

Responsiveness dimension of SERVQUAL model illustrates the willingness of the employees of the company to help their customers to have a better experience towards the products and services (Wang et al., 2015). Monitoring and addressing the feedback of customers to improve services is a priority at Amazon (Brainmates, 2019). Responsiveness is one of the primary differentiating factors of Amazon’s business.

Below are few of Amazon’s promises that elevate its service quality:

  • Free replacement of product in case of damage, at no extra cost to customers.
  • Regular customer surveys.
  • Redressal of customer grievances.
  • Updating the customer about the progress of their delivery.

Impact of assurance dimension on consumers

Assurance dimension underlines the knowledge of the employees which have helped the company to gain confidence and trust of its consumers. Amazon regularly conducts training and leadership development programmes for its employees and sellers to educate about its processes (Amazon, 2019).

Amazon had observed that the consumers of rural India, prefer making their purchases offline as they did not trust the assurances of Amazon. In case of damage, consumers believed that it wouldn’t be easy to hold the online retailer responsible. Amazon launched several initiatives such as Feet on Street, Chai Cart, Seller Cafes, Service Provider Network, Tatkal, I Have Space, Amazon Trained Ecommerce Specialists, and Seller Universities to educate its sellers. Consequently tied up with several local players such as Varkangee (business correspondent for companies like Jio and Amazon) and StoreKing (operates pick-up points for Amazon’s products in 1.4 lakh villages). All these initiatives form a part of ‘Project Udaan’ which was launched in May 2015 with the objective of expanding Amazon’s reach in rural and semi-urban India (Singh, 2017).     

Empathy dimension

This dimension of the SERVQUAL model explains the care and attention given by the company to its customers. Likewise, Amazon focuses on delivering its promises made to consumers (Ciavolino & Calcagnì, 2015). It ensures that the orders reach to their respective consumers within the stipulated time. The feedbacks and point of views are closely monitored and evaluated by Amazon to ensure that the consumers are satisfied with their purchase (Brainmates, 2019). Furthermore, the return policy of 30 days by Amazon has also helped the company to improve loyalty among its customers.

References

Jaideep Bhattacharjee

Research consultant at Project Guru
Jaideep is an engineer in marine engineering and was a part of the Mediterranean Shipping Company for a year.With expertise in the technical field, he is good with numbers and statistics and mostly uses SPSS.His expertise are in the field of marketing, human resources management, change management, strategic management and Finance. His strengths also lie in framing strong literature review and interpretation. Being an avid follower of Manchester United, he also takes interest in sports especially football, cricket and chess.

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