In its bid to woo the Indian customer, Amazon resorts to ‘no questions asked’ policy

Harishankar bought a kindle from Amazon.in which turned out to be faulty and was pleasantly surprised when Amazon promptly delivered another kindle and did not even ask for the faulty device. In a similar experience, Poornima ordered a 32 GB memory card on Amazon, which was intercepted and stolen. Amazon’s customer services made sure she received a fresh memory card, with no questions asked.

These incidents are recent examples of how the e-tail giant chooses to treat its customers and responds to customer complaints with a no-questions-asked returns policy, which it claims is usually not the industry norm.

Several analysts and industry observers whom BusinessLine talked to are of the view that this far-sighted policy of putting the customer first is the right approach to building market leadership.

“Amazon is creating a superior customer experience by reposing total faith in its customers instead of being suspicious of their claims,” Harish HV, Partner at Grant Thornton India. “Happy customers are great brand ambassadors and will generate positive word-of-mouth, which will eventually make them a more popular brand. While it is safe to assume that 90-95 per cent of customers are honest, there may be a few cheats, which customer data will eventually throw up.”

Amazon believes that putting the customer at the centre of its universe has already catapulted it to market leadership in India. Firmly contesting a recent survey report by e-commerce advisory firm RedSeer Consulting, which places Flipkart as the most preferred and trusted e-tailing brand in India, a senior executive from Amazon.in said: “Amazon leads across all parameters including GMV (Gross Merchandise Volume), number of units sold and online traffic, as per third-party sites.”

Asked how Amazon could ignore huge costs incurred as a result of returns/rejects (constitute 20 per cent of all transactions), the executive said: “We take it on good faith, and focus on serving the customer rather than look at it as a cost-optimisation transaction. We believe the customer is always right and is telling us the truth unless we have information either through our systems or through other means by which we can ascertain for sure that the customer is wrong. Until then, we assume the customer is right.”

The e-tailer is focussing on three customer-engagement metrics. It tracks its active customer base to see who has bought what in the last 12, 6 and 3 months, whether it is seasonal or non-seasonal; tracks customer depth to see how many categories a customer purchases on average (If it’s just one, it is considered a poor customer depth metric). Lastly, it tracks repeat purchases to see if customers are buying again within 30, 60 or 70 days, and see how they can inspire distributed purchases throughout the year.

“Last year, Flipkart led with 45 per cent market share with Amazon trailing by 15-20 per cent. But lately, Amazon has almost caught up with Flipkart. They have a long-term approach to the market and are rapidly gaining ground,” said an e-commerce analyst who did not want to be named. Yet another analyst pointed out that Amazon has fewer promises and delivers more, enhancing customer experience, especially in delivery time.

The e-tailer said the general practice in the industry is of reporting GMV by calling out MRP or total amount customers paid. Amazon says it ignores MRP, taking into account the actual amount paid by customer after discounts, minus the returns/rejects and the GST on the product. “So comparing our GMV with competition is like comparing apples to oranges,” claimed the executive.

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