Published on Jan 9, 2018

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Amazon has landed in Australia, and it’s not all bad news


Amazon opened its digital doors in Australia just weeks before Christmas.


Worth over half a trillion US dollars, the company has consistently altered purchasing habits wherever they set up shop. The recently trialed ‘Amazon Go’ is a checkout-free supermarket where you simply swipe your smartphone and go.


With all the worry and hype around Amazon arriving on our shores, you would be forgiven for thinking they are about to take over the world.


Yet, according to Roy Morgan, there are both bad and good things about the company moving into the $300 billion Australian retail market.


Amazon is interested in converting existing retail brand online shoppers into Amazon online shoppers. Roy Morgan data shows that in the last quarter, 54% of Australians over 14 years of age bought something online. These are people already comfortable with shopping online, who will hand over credit card details or who have PayPal or other secure payment setup. That is a ready-made customer base for Amazon.


Roy Morgan also identified a number of companies with customers also shopping at Amazon, including David Jones (30%), Zara (28.2%) and Officeworks (25.2%).


Amazon was also identified as hard to beat on price, even for large Australian retailers, with Australian retailers typically bearing high overheads that result in low net profit-margins.


The good news


Roy Morgan suggest that Australians still value local shopping. The era of authenticity and social connection has brought with it a desire to experience real interaction.  That might mean consumers are shopping at the local supermarket or spending more money on restaurant and café experiences.


For producers, Amazon also provides another platform to sell goods and to get products out to a wider consumer base.


All in all, the point made by Roy Morgan is, don’t try to compete with Amazon on price.


Instead, differentiate yourself by capitalising on human experience:

  • form relationships with your customers. Take the time to understand what customers want or need, and do your utmost to provide it
  • have well-trained staff who are engaged in providing a great customer experience from the moment customers walk in the door through to handling returns and complaints
  • if you don’t already have a seamless online presence then there is no time like the present to get started and make sure your social media and website presence are consistent, interesting and frustration-free for the consumer
  • if you don’t have an online store, look into the practicalities of starting one
  • make your store easily navigable, immaculately clean, and just a little bit mysterious.