Amazon Is Coming, But What Does This Mean For Retail Marketing In Australia?
Disruption is coming to the Australian retail market in the shape of Amazon – you might know it? In this opinion piece, Dentsu Mitchell’s national head of marketing and partnerships, Carla Bradshaw (pictured above), looks at the impact from a marketing perspective.
No doubt the launch of the ‘bricks and mortar’ Amazon will be a signification disruption for Australian retailers with an expected erosion of profit margins likely for many.
Time will quickly run out, with reports of their current recruiting of 100 roles in preparation of their planned invasion in September 2017, retailers and marketers need to plan now for what Amazon’s impact is likely to be.
Let’s recap on information released to date; the online giant sees grocery as an opportunity and is expected to launch its grocery business in Singapore and South East Asia at the same time as Australia.
It’s been reported Amazon will launch an Australian version of its online brand Amazon Prime Now first which provides members free shipping on a large range of products. Amazon Prime is a paid membership program, offering every day household items with free two-hour delivery.
Once established, the retail giant is expected to launch its Amazon Fresh product, an online grocery delivery service for an additional fee.
Amazon expects to generate the majority of its sales from online orders initially, followed by its stores, expected to generate similar revenue to an average Aldi store. Amazon is likely, initially, to focus on its more successful general merchandise categories; electronics and toys.
Amazon has indicated it will have distribution centres in each state as well as physical stores in regional areas to avoid high logistic costs. Stores will carry a mix of general merchandise and fresh produce.
Some facts on their current market position in the US. Amazon has $US1 of every $US2 of e-commerce sales and their market share is continuing to grow. E-commerce is set to reach 20 per cent of sales in the US in 10 years and by that time Amazon will account for 10 per cent of all US retail sales, according to data prepared by Watermark.
Also according to Watermark, prior to turning on its system in Australia, Amazon will price check everything before setting prices at a 30 per cent discount.
There’s no doubt Amazon’s presence in Australia will have a significant economic impact on the retail landscape, but online retailers should be mindful that online retail penetration as a proportion of total sales is only around seven to nine per cent locally.
If Amazon launches Fresh successfully it would have a significant impact on our supermarket retailers where margins are among the highest in the world.
Current economic indicators show Australia is ‘ripe for the picking’ for Amazon. We have household income growth currently slow, sluggish employment growth, lower disposable income, and the household debt to income ratio has soared to a record high over the past three years – Aussies have it tough right now and Amazon just might be the answer.
For our local retailers, there are a few immediate actions to cross check to make sure they can compete.
They need to ensure they are providing their customers with flexible, consumer centric delivery options. The two-hour delivery turnaround that Amazon will offer takes convenience to pretty much unprecedented levels for Australian customers and will set a new benchmark of expectation.
It’s more important than ever that it’s easy for customers to make their purchase, whether it’s in store or online. According to Shopify, 40 per cent of customers who start filling a shopping cart online complete their transaction. One-click buying will become the norm and make the checkout process less cumbersome – again, coming back to convenience for the customer.
Customers need to be incentivized to be brand loyal. This means tapping into the emotional connection and giving them a strong reason to come back time and again, beyond just convenience. Reward programs need to work across multiple channels and truly provide customers with ‘money-can’t-buy’ experiences that they won’t get elsewhere.
Amazon is coming, and its arrival will be one of the major game-changers for Australian retail next year. Retailers and their marketers need to be ready now to ensure they ride the wave of change, and don’t get wiped out.
Please login with linkedin to comment
Latest News
TV Ratings (18/04/2024): I’m A Celebrity Wins Prime Time And Key Demos
Aussie viewers can be a harsh lot at times. Only days after Ellie Cole bled her heart out, she has been sent packing.
Effie&co Launches New ConnectAsia Division To Help Aussie Brands Market To Asian Consumers Overseas & At Home
Not provided is advice on using chopsticks and not spilling ramen down your shirt.
Cashrewards Sets Out Stall For New CMO
Thinking of applying for the Cashrewards CMO gig? Here are some insider tips that, yes, are tantamount to cheating.
‘I Ask For The TV Industry To Stand Up And Defend Itself’ – Seven Boss James Warburton Steps Down
The Seven supremo heads for the exits after five years. Here's hoping the Spotlight team organised the farewell bash.
Poh! Jamie! Adriano! Paramount ANZ reveals its tasty plans for this year’s MasterChef
It's your fan's guide to this year's MasterChef! Although no tips on how to pronounce crudités or use a un fait-tout.
Dentsu’s iProspect Partners With MOOD Tea Ahead Of May Campaign Launch
We love a Mood Tea here at B&T. Although we do store old screws and nails in the International Roast caterer's tin.
Opinion: When Culture Starts Eating Itself: Navigating The Age Of Self-eating Nostalgia
Born boss David Coupland asks is adland going through a nostalgia period? But please, no repeats of Best Of Red Faces.
Who’s Going To Cannes?! The TikTok Young Lions Winners!
It's Aussie adland's next gen! They're off to Cannes with high hopes of bringing back a Lion & a foot-long Toblerone.
Adobe Launches Express Mobile App With Firefly AI
Want to be the coolest kid at Friday staff drinks but forgot your retro Nikes? This new Adobe wizardry may do the trick.
ThinkNewsBrands & IMAA Extend News Publishing Education In Brisbane
Industry duo takes its publishing roadshow to Brisbane. Was disappointed no male attendees were wearing walk socks.
B&T Chats With Wavemaker’s Provocative Pioneers On Their Cross-Pacific Sojourn
B&T TV heads to Wavemaker's Sydney digs to interview two staffers from its New York & LA digs. If that makes sense?
HoMie & Champion Launch “Give One. Get One” Campaign Supporting Youth Homelessness Via Town Square
Much like the fête's prized chutney wears a blue winners sash, so too should this top initiative from HoMie & Champion.
Thinkerbell Takes Us Back To Summer In Latest Work For XXXX
This beer ad wants to take you back to summer! Just minus any chance of a shark attack on your morning bus commute.
Cannes Lions Unveils 2024 Programme Featuring Queen Latifah, Jay Shetty & P&G’s Mark Pritchard
Are you one of the lucky ducks heading to Cannes in June? Check out the headliner acts you'll be queueing hours to see.
Scroll Media Recruits Costa Panagos From Twitch
Costa Panagos set to bring South American flair to the Scroll offices. Assuming that he is, indeed, South American.
Year13, Microsoft & KPMG Australia Launch AI Course For Gen Zs
Born around the 2000s? Need to amp up your AI creds? This guide's for you (although it's not really that age specific).
General Motors Snares Heath Walker From Scania
Do you rage about oversized American cars on our roads? You need to bail up Heath Walker at parties & industry events.
VML Launches New “Envoyage” Brand For Flight Centre
VML unveils new brand for travel operator Flight Centre. Alas, no sign of those paid actors pretending to be pilots.
Subaru Places Media Account Up For Review
Subaru puts media up for review, as adland journos get set for mandatory "agency drives off with..." headline.
TV Ratings (17/04/2024): Contestants Faced With Harsh Realities As Alone Australia Heats Up (Or Cools Down)
Alone still doing the business for SBS. Overly long train journeys not doing the business, but they persist anyway.
Ben Fordham Loses Number One Spot As Ray Hadley Celebrates 156th Ratings Win
The radio numbers are in! Discover who's off for a boozy lunch today & who's waiting for the dreaded HR death knock.
Gourmet Ice Cream Brand Connoisseur Launches New “Thrill Your Senses” Iteration, Via SICKDOGWOLFMAN
Rattling the old "truth in advertising" adage comes this ice-cream spot full of noticeably thin people.
Paramount’s Global Sales Boss: ‘Australia’s Converged Model Is A Blueprint For How I’d Like All Of Our Markets To Be’
Paramount's global sales boss gives local sales ops the thumbs up. Didn't weigh-in on the Lisa Wilkinson debacle.
TikTok Starts Testing Its Instagram Rival In Australia
In exciting news for piano playing cats & brattish pranks in shopping centres, TikTok unveils its Insta rival plans.
Man Wrongly Named By Seven As Bondi Killer Hires Lawyers
Struggling to save for a house deposit? Why not get wrongly identified by Sunrise!
Smartsheet Appoints Indie Agency Sandbox Media To Its Media Account
Can't stand your colleagues? Like to dob them in when they miss a deadline? These work management platforms are ideal.
Boss Not Letting You Come To Cannes In Cairns? Use This Business Case To Convince Them!
Stingy boss won't spring for a ticket to Cairns? Add this to your persuasive argument repertoire. Or grovel.
Alt/shift/ Brisbane Builds Portfolio With Ausbuild Creative, PR, Content & Social Account Win
The Brisbane comms/PR agency lands constructor Ausbuild. Also hoping for a discount on its new glass conservatory.
Young Guns Versus The Old Guard: Who Adds More Value to Our Industry?
Cannes In Cairns poking this hornet's nest in a lively debate. Just so long as the oldies can get up the stairs.
70% Of Aussies Don’t Have Green Power Plans ENGIE Says In Major Brand Campaign Via HERO
Are you the notorious "light leaver on-er" in your flatshare? Quell any infighting with this green energy news.
PrettyGood Launches Offering Brand & Media Solutions For Australasian SMEs
B&T applauds the charitable nature of this new agency. Although we'd hate to see it impact any Chrissie present sends.
A Blunt End: Dolphins Medicinal Cannabis Sponsorship At Risk
Yes, it's another NRL drug story. Yet, thankfully it doesn't involve coke in Kuta during the off-season.
Slew Of New Creative Hires At Leo Burnett Australia
Ahhh, all black! The outfit of choice for agency creatives, David Jones staff and everyone in Melbourne.
Under Armour Unveils Local “Live in UA” Campaign
American apparel brand set for yet another tilt at the Aussie market, as Nike declares "we'll see about that".
Pepsi Launches New Look, Refreshing Classic Fashion Staples Via Special PR
Are you always the bridesmaid, never the bride, as the old saying goes? How do you think Pepsi feels?
Pure Blonde Returns To A Place Purer Than Yours In New Campaign Via The Monkeys
B&T's always been a huge fan of the 'drink yourself thinner' diet plan. So big thanks to Pure blonde, vodka & tequila.