Amazon's struggles with its Fresh grocery service show a huge liability for Prime

REUTERS/Jonathan Alcorn

A worker walks past Amazon Fresh delivery vans parked at an Amazon Fresh warehouse in Inglewood, California.

• Amazon Fresh customers have reported issues with the service to Business Insider.
• The negative experiences have impacted their view on Amazon as a whole, the customers say.
• The reveals how the interconnectedness of the Prime ecosystem is Prime's greatest strength, as well as one of its biggest liabilities.

Amazon's struggles with its Fresh grocery service is having an impact on customers' views of Amazon as whole.

Though the company is known for its stellar customer service and reliable shipping of online shopping orders, customers told Business Insider that its Fresh service could use some work.

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Business Insider spoke with more than a dozen Amazon Fresh customers who said they had experienced issues with the service in places like Los Angeles, New York, and Washington, DC. These customers complained of poor-quality and even spoiled produce, orders being packed incorrectly or illogically, canceled or late deliveries, and regularly missing items.

Customers also say these negative experiences with Fresh have colored their perception of Amazon and Amazon Prime as a whole, even if they are otherwise happy with the service.

"I feel like Amazon now has two very distinct divisions, in my mind," Heather Fishel, a customer in Los Angeles with issues of destroyed items in her Fresh orders, said. "While I love Amazon Prime and even Prime Now ... I don't know what is going on with Amazon Fresh. But it really leaves a bad taste in my mouth, because there are other companies that do grocery so much better."

Some customers now say the spell has been broken and they are trusting Amazon less for other kinds of purchases.

"The troubles we've had over the last few months have loosened the grip Amazon had on me," said Gillian Fritzsche, a customer in Brooklyn, who said she has consistent issues with items missing from her orders. "I used to go to Amazon first to look for things, now I check others."

Fritzsche said her experience has led her to become wary, and she said she is "instinctively trusting Amazon less."

Amazon has built its Prime services, of which Fresh is a part, in an interconnected way. The free 2-day shipping is the gateway, which then leads to other services like Prime. The services are designed to keep customers happy and within Amazon's gated community of shopping, when working together successfully, and one good experience with one service can lead the customer to try and see if there's as good an experience with the next one.

But when there's a breakdown in service, that interconnectedness becomes a liability, rather than an asset. Customers may begin to view all of the company's services through the lens of the issues they have with one service, coloring the perception of the entire company.

That's how Amazon Prime's strength can become one of its biggest liabilities.