Is Amazon Losing Its Luster?
Amazon's marketplace brand is being tarnished by the day - and not just because of the media. It's because of the activities that happen on the platform. The end goal of creating a brand is to get a premium. A premium on what, though?
Lowered acquisition cost. (CAC) Instead of having to pay for every new user (advertising), people come to you because friends they trust use them.
Higher customer lifetime value (CLV). People trust your brand, so they come back. You don't have to convince them again.
Higher prices. If people know your brand is high quality or has a certain status, you can charge more then your competition for the same product which essentially is just a different label on the box.
Amazon has never focused on number 3. However, the benefits of Amazon being a premium internet brand is lower CAC and higher CLV. If customers continue to have bad experiences in certain categories where goods need to be authentic, or non-expired, or non-tampered, and the trust level is higher than a typical purchase, then your value proposition starts to degrade.
Trust could kill Amazon. And by that I mean Amazon could continue to become a site where you find good products, but it takes a ton of time to determine if this good is what you expect.
