Brand Audit – Amazon

Amazon has long been heralded as one of the world’s top brands, however data suggests perception of the brand has taken a hit in the wake of the tax avoidance scandal and claims it is treating sellers unfairly.

The steady stream of criticism the Amazon brand has faced in recent months is starting to take its toll.

YouGov’s BrandIndex reveals Amazon’s Buzz score – a net balance of the positive and negative things people have heard about the brand – currently sits at 8.6 (10 May), a drop of 24.2 points from the 32.8 registered seven months ago (11 October) when it was dragged into the tax avoidance debate.

The company’s overall Index score – which takes into account how consumers rate the brand in terms of impression, quality, value, reputation, satisfaction and whether they would recommend it – hovered around 55 points in the days prior to the tax accusations but crashed in the following months to reach 39.7 last week.

Amazon has always been viewed a star brand, placing highly on annual lists such as Interbrand’s “Best” and Brand Z’s “Top 100” rankings. But the world’s largest online retailer has come under repeated fire from politicians and pressure groups for accusations it has been avoiding tax payments. It reached tipping point when executives were hauled in front of MPs (12 November) to answer the allegations and criticised for not being able to provide a definitive explanation.

The resulting public outcry pushed its Buzz score down 28.1 points to a low of -7.9 within the four weeks after the hearing.

In addition to tax avoidance allegations, Amazon was slammed by John Lewis chief executive Andy Street last November who claimed it is driving UK-based retailers out of business by using its tax status to undercut them on price. The negative stories followed the business into the new year after it hiked fees of up to 70 per cent for marketplace traders in the UK last month.

The troubles have had a noticeable impact on Amazon’s individual Index metrics, which have all posted double-digit drops between last October and now. Its Reputation score – which measures whether someone would want to work for the brand – has fallen12.4 points to 29.7 during this period, while its Recommendation metric has sagged 14.5 points to 43.5.

Despite the declines, the overall perception of the online retailer looks relatively positive particularly when compared to high-street rivals Argos and WH Smiths have fared over the same period. The Amazon brand has also continued to perform. It posted a 22 per cent year-on-year rise in sales for the quarter, suggesting that any damage to its brand as a result of ongoing troubles is likely to be short lived.

As much as the Amazon brand has been hit, it would be a brave call to say it is permanently damaged when customers have been so keen to keep paying for its services.

Methodology: Marketing Week looked at YouGov BrandIndex measures from 11 October 2012 to 10 May 2013, using a one week moving average of data.

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