Amazon: bent on driving a better customer experience

While Amazon didn’t hit analysts’ expectations with its Q4 earnings, it remains steadfast and on target when it comes to providing exceptional customer service and creating a better-than-ever retail customer experience.

That’s the message Amazon leaders drove home in between providing insight on income, revenue, profit and operating costs across its expanding portfolio of businesses.

“We have a lead in this space [ecommerce], and we don’t take that for granted and want to serve customers better each year,” Amazon CFO Brian Olsavsky told analysts and shareholders during Amazon’s Q4 earnings call Thursday.

“We’re very happy with customers’ reaction in Q4 and bottom line results we had,” he added.

But industry watchers are not so happy with Amazon’s quarterly results. In fact, its stock price dipped about 13 percent following the financial news.

“The growth story that investors were looking for… clearly Amazon has not been able to live up to the hype,” Adam Sarhan, chief executive of Sarhan Capital, told Reuters.

The news comes just one day after reports of Amazon investigating the creation of a new streaming subscription-based music service that could present Spotify and Apple Music with their biggest competitor to date.

During the question and answer portion of Thursday’s earnings call, analysts peppered Olsavsky and Harden with inquiries regarding operational costs and its plans regarding logistics services. The street had been hoping for an average profit of $1.56 a share, but Amazon delivered short, with net income of $482 million, or $1.00 per share.

Net sales didn’t fare as well as expected either, though a 21.9-percent increase isn’t something to dismiss. The $35.75 billion in net sales is a healthy jump over 2014 Q4’s $29.32 billion. Analysts, though, were hoping for $35.93 billion, which was smack in the middle of Amazon’s earlier forecast of $33.5 billion to $36.75 billion.

Last year, however, marked the first time Amazon hit the $100-billion company mark, and it would have been even higher if not for variable currency fluctuations during the year.

But that didn’t seem to impress analysts much either.

“By comparative retail standards, Amazon’s level of profitability is still painfully weak,” Neil Saunders, head of retail analyst firm Conlumino, told Reuters. “For every dollar the company takes, it makes just 0.75 of a cent in profit.”

Yet Amazon appears pleased with its results and the direction its legacy and new business lines are taking given growth with Amazon Web Services, its Prime and content delivery segments.

“Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass $100 billion in annual sales and serve 300 million customers,” said Jeff Bezos, Amazon founder and CEO, in a release regarding the earnings. “And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like Day 1.”

Prime, noted Phil Harden, Amazon’s director of investor relations, achieved a 51-percent increase compared to a year ago.

“We are grateful to our customers and we have our heads down and bent on driving a better customer experience,” he stated.

In regard to mobile consumer activity during the past holiday season the Amazon executive did not provide specifics on traffic or mobile shopping versus desktop activity. But it is obvious Amazon’s happy with how its app is performing.

“It continues to be a tailwind for business. We are working hard to make it easy to buy on mobile and focused on convenience factor and the mobile app is very, very convenient,” said Olsavsky, adding, “We are pleased with what we saw.”

Tags: Amazon customer experience cx UI user experience