Amazon customer satisfaction gets a boost, but why?
Piper Jaffray upgrades Amazon's customer service rating, partly because of its Kindle and new accompanying iPhone app, and partly to catch up with the e-tailer's success.
Amazon snared an upgrade from Piper Jaffray Monday based on a customer service survey and e-commerce innovations such as the Kindle and its associated iPhone application. However, the reasoning behind the upgrade is debatable.
In a research note, Piper Jaffray analyst Gene Munster acknowledged that he was fashionably late to the Amazon party. That hint indicates that this Amazon upgrade is really about Munster playing catch-up. Munster is upgrading Amazon shares to a "buy" from a "neutral."
Here's a look at Munster's reasoning:
Amazon's customer service. Piper Jaffray surveyed 300 online shoppers and found that 81 percent are satisfied with Amazon's customer service. That's down from 84 percent in December. Ninety-four percent of Amazon users would recommend it to a friend.
Munster finds that Amazon remains the premier e-commerce destination, a finding that's not surprising. And then he cites this Amazon poll on customer satisfaction.
Europe unique users are off to a strong start in the first quarter.
Amazon can gain market share and continue to innovate. Munster reckons that Amazon can even miss earnings estimates and stay in Wall Street's good graces. Sure, it can.
The Kindle could be disruptive. Munster writes: "People don't know that they want it. We estimate it will account for about 2 percent of sales in CY09, and 4 percent in CY10."