One can assume, that most people in the United States have heard or purchased from the online goliath, Amazon at some stage. Now it is Australia’s turn to do the same.
Amazon has big intentions to pursue the retail dollar in Australia in a big way. The company founded by Jeff Bezos, arrived into Australia with a soft launch last Thursday and the mystery and hype surrounding its arrival is something companies could only dream of. The expectation of a full retail presence over the coming months is among the most talk-about business ventures in the Australian retail market for decades.
It’s not about a price war. It’s about the lack of innovation among our larger retailers. The business models of our larger retailers have changed little over the years while Amazon is constantly innovating, updating its business model in response to new technologies and changing lifestyles.
Amazon’s presence is sending a strong signal throughout the retail industry to think differently and to innovate. That means, unless retailers start innovating and compete with cheaper, faster goods, we will be destined to see more store closures.
The US giant is expected to have a huge impact on the larger retailers and their margins – such as the Harvey Normans, Coles and Woolworths and JB Hi-Fis to name a few. Amazon understands the Australian shopper is paying more for pretty much everything – from computers and other electronics through to make-up and other day to day items. Amazon brings volume of purchasing to the table, like we have never seen before, bringing prices down to values one could only dream of.
According to reports, Bezos is expected to invest hundreds of millions of dollars over the next few years to undercut current prices by as much as 30 percent for books and movies to clothes and groceries in a move that will have local retailers rattled.
Amazon will certainly give retailers stiff competition.
Then there’s the home delivery. Australian retailers are viewed to be behind other countries when it comes to home delivery. Currently half the shoppers believe Australian retailers tarnish the online shopping experience with sluggish delivery turnaround times. Whereas, Amazon’s fast turnaround delivery service is expected to be a potential game changer.
We are experiencing a retail revolution in Australia and the arrival of Amazon is going to change the way we shop as we know it. So, there is no place for retail complacency. If precedent is anything to go by, this is only the beginning.
So what does this all mean to our bricks and mortar retail chains? Why don’t their brands typically get this much buzz?
Amazon’s influence in the media has been nothing but clever – turning news into marketing gold.
For starters, let’s just reflect on the Amazon Effect in the media (over the past few months) in Australia. The long-anticipated announcement about Amazon coming to Australia came in the form of a brief written statement.
“The next step is to bring a retail offering to Australia, and we are making those plans now.”
The statement from Amazon emphasised the long-term investment coming and the job opportunities flowing from that.
“We are excited to bring thousands of new jobs to Australia, millions of dollars in additional investment, and to empower small Australian businesses through Amazon Marketplace.
We are optimistic that by focusing on the things we believe customers value most — low prices, vast selection, and fast delivery — over time we’ll earn the business of Australian customers.”
Then Amazon went further to say, based on its track record in other countries, the US online retail marketplace will spend hundreds of millions of dollars over the next few years to establish its services in Australia.
Amazon’s campaign is undoubtedly reassuring the general public that the online retail giant, with all its innovations – is worth backing.
Underneath the press releases, the pitches and the occasional stunt is inspiring user-generated, sharable and engaging content.
What does this mean for retailers?
Retailers need to find new ways to turn that seemingly mundane business news into a glorious public relations campaign with shareable content that costs all few dollars to execute.
Also, retail brands need to constantly innovate and become omni-channel retailers where they seek to provide the customer with a seamless shopping experience – whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.
Half of Amazon’s victories so far in Australia are won before the game even begin, because Amazon is so good at picking the right game strategy. This is what sets Amazon apart and into a league of its own – otherwise known as the Amazon Effect.
Amazon’s entry into Australia has been a great mobiliser for new ways of thinking so, brace yourself, as we witness a retail revolution like we have never seen before.