Eventually it will catch up with them. It may not be today, it may not be tomorrow but in 10 years time, I bet Amazon’s retail business will have declined.
People are not stupid and they learn. They will go to the place which works best for them and if Amazon stops working for them, they will go somewhere else.
One final comment is Amazon says one of its corporate values is customer obsession. On the retail side of Amazon, I am not seeing a lot of customer obsession. I am seeing a lot of short term thinking which gets Amazon more money today but will hurt their business in the long run. Here are some examples:
- Horrible content discover for books, movies and TV. Amazon just returns the results of a database query. It does not try to help you find content you will like. In TV shows, it lists each season as a separate show (web site, about 5-7 years ago).
- No way to distinguish between high quality non-fiction books and disinformation.
- Its book categories are very badly done. One example is I once went looking for computer science books. There were duplicates in the top 50 (i.e. one book listed more than once) and almost none of the books were computer science books. They were either “How to use technology X” books or “How to ace the programming interview” books. Some were also public policy books. This was about 10 years ago.
- Canceling Prime took too long and was far too hard. I will never subscribe again after I saw how they treated me when I unsubscribed. Note Netflix is easy to subscribe to and unsubscribe from.
It's not clear that they haven't profited more by having people retain prime through these patterns than they have lost through losing consumer trust.