Amazon is moving in

What does this mean for Australian and New Zealand business?

7 Nov 2017

By 2021 Amazon is expected to make up 50% of the entire US ecommerce sector and it’s making big investments to expand globally. Rumour has it that its Australian business operations will start in time for Black Friday, just weeks away. This would inevitably hurt retailers already affected by the drop in retail spending. 

The all-devouring Amazon is set to take a $12 billion chunk out of the Australian retail sector within the next decade. That means a profound impact is imminent – particularly where department stores are concerned as, along with eBay, they are expected to be hit the hardest. However, other Australian retail outlets are not out of the woods. Amazon will compete on price and range, likely affecting electronics, apparel and sporting goods, too.

It’s not just Australian retailers under threat, either. With the Australian fulfilment centre in Melbourne, delivery to New Zealand consumers will become cheaper - and faster. Brokerage company Forsyth Barr believes Amazon is likely to expand into the New Zealand market either through establishing a strong online or physical presence with a fulfilment centre on the ground. Either way, New Zealand consumers will likely purchase more from Amazon as a result, which means Kiwi retailers will have yet another big international player preying on consumers looking for a bargain.

Amazon the Almighty?

When you think of ecommerce you conjure up images of Amazon or eBay. That’s because they’ve been setting the standard worldwide for years now. In fact, they practically invented the ecommerce we know today. 

Aside from their long history of dominance, their platforms are also innovative and highly customer or buyer centric. This is ultimately where their prowess lies along with delivering a large product range at great prices. But there’s more to it than that. Here are a few other elements that make Amazon particularly threatening:

  • Amazon Marketplace: An unrivaled source of secure income.
  • Amazon’s shopping app: Encourages mobile ecommerce. 
  • Affiliate Programme: Allows businesses to earn income by advertising Amazon products and its online retailers. 
  • E-business Self-publishing Platform: Designed to help writers sell their own books, movies and music online.
  • Online Order Fulfilment Programme: It’s highly sophisticated, making it attractive to online retailers.

Challenges for Amazon - Opportunities for Businesses

It’s not all good news for Amazon. There are many challenges that await them in Australia, which may put a damper on their expansion plans within and around Australian borders, at least initially. Firstly, Australia is a nation almost as large as the US but sparsely populated, which will drive up delivery costs. Secondly, wages in Australia are higher than in most developed countries, which could undermine their high-volume, low margin business model. For the opportunists among us, a slight shift in approach could create new opportunities to generate fresh waves of business. Let’s take a look:

1. Buddy up
There will always be strength in numbers. Co-operation and even collaboration between Australian retailers is an opportunity to outplay Amazon. 

2. Get intimate 
Does one size really fit all? By embracing innovation and personalisation you’ll soon find your business gaining the competitive edge. Convenience and competitive pricing is no longer good enough so it’s time to think outside the box or try going niche. 

3. Deliver flexibility 
In an economy where impatience and limited attention spans are the key drivers for change, it’s time to provide customers with exactly what they expect – flexible online delivery options, one-click buying, click and collect and more. By simplifying the checkout process, you will capture the trust and dependence of your customer. They want an easy life. Be the one to give it to them and they’ll keep coming back.
 
4. Nurture loyalty 
Cross-channel reward programmes and gift cards are more important than ever to build up customer loyalty online. Customers want to feel valued and a small gesture of appreciation will go a long way in ensuring they stick around.

Be part of the solution with Solutionists

Sometimes, the greatest inconveniences bring about the greatest changes. At Solutionists, we offer fully integrated, customer-centric and innovative ecommerce platforms that are designed around your specific business goals. Let’s get excited and work together to carve out alternative pathways.

In order to help retailers keep – and grow – their market share we’ve developed a unique offering that includes:

  • Strategic integration with Amazon marketplace
  • Creation of personalised yet customer-centric online shopping experiences that will readily stand up and compete with Amazon
  • Support for multi-freight providers to help them offer flexible delivery options
  • Conversion rate optimised checkout experience 
  • Seamless integration with ERP, CRM and POS systems to support in-store loyalty, gift card redemption online etc.

So, if you’re ready to take on Amazon, we’re ready to help you! All you have to do is get in touch by giving us a call.

Auckland +64 9 630 3074

Sydney +61 2 8355 7014

Melbourne +61 3 8579 1330

author:

Sina Braeuning

date published:

7 Nov 2017