When Wesfarmers’ managing Richard Goyder grimly predicted last March that the arrival of Amazon in Australia “will eat all our (retailers’)breakfasts, lunches and dinners” he would not have predicted his words would become so prophetic 12 months later.
A new survey released today by market research Nielsen has found that 75 per cent of Australians aged over 18 agreed they’d be interested in buying something from Amazon’s website, and 56 per cent said they are likely to buy.
Amazon promises a better range, cheaper prices (by as much as 30 per cent) and super-quick delivery. It’s all home delivered as Amazon has no plans to open actual bricks and mortar stores in Australia (as it has done in the US.)
Interestingly, food (Amazon Fresh) wasn’t high on respondents’ list of things they wanted to buy, while electronic goods, books, fashion and shoes all were.
Around 67 per cent of respondents said they were likely to buy electronics from an Amazon Australia site, 61 per cent books, 59 per cent clothing and 42 per cent shoes. Only nine per cent said they’d purchase fresh vegetables and seven per cent said they would buy meat. Although the numbers largely correspond with the number of Australians already buying groceries online.
The Nielsen study found that Amazon will be skewed to a younger, male audience; although actual statistics weren’t divulged.
Amazon’s arrival into Australia spells further grim news for the struggling fashion retail sector that’s seen major players such as Marcs, David Lawrence and kids’ retailer Pumpkin Patch all go into receivership in the past few weeks.
Adding to the misery, a recent Citigroup study found retailers such as JB Hi-Fi, Harvey Norman would be the biggest losers of an Amazon arrival in Australia, and, of course, the traditional chains such as Myer, David Jones and Target with predictions they could lose as much as 20 per cent of their profits to Amazon.
In late November, Justin Braitling, Watermark Funds Investment chief investment officer, was reported in The Australian Financial Review as having been briefed on Amazon’s plans for the Australian market. “We spoke to the guy rolling out Amazon’s business here in Australia and in his words: ‘We are going to destroy the retail environment in Australia’,” Braitling told the AFR.