Resistance is futile: Here comes Amazon

Published on the 16/10/2017 | Written by Jonathan Cotton


Amazon launch in Australia

“You can't stop progress,” career politician Bill Heslop once said, and he was right...

…And when that progress takes the form of international retail juggernaut Amazon, Heslop’s advice goes double.

The eCommerce giant is launching in Australia soon, and not everyone is pleased: Dick Smith recently commented that Amazon will do “incredible damage” to Australian SMEs. Speaking to SmartCompany, Smith said that Amazon will make an “absolute fortune” here, the retailer will be “completely ruthless” when it arrives.

He’s right of course. Amazon dominates wherever it goes: 43 percent of all online retail sales in the US went through Amazon last year. The company’s UK revenue increased by more than 50 percent last year alone.

Here and now though, it’s all smiling faces as the multinational announced that it will host a free half-day event in Sydney to provide practical guidance for Australian businesses looking to sell in its new Amazon Marketplace platform. The lineup includes Amazon Australia country manager, Rocco Braeuniger, and head of Amazon Marketplace in Australia, Fabio Bertola, among others.

The event will focus on offering practical guidance for using the Marketplace platform to increase sales and reach new customers. So far over 500 Australian merchants have registered to do just that when the platform launches at a still undisclosed date.

Though the company is being cagey over the official launch date, it means business. It’s first bit of serious infrastructure, a 24,000 square metre fulfilment centre, is nearing completion in Dandenong South.

Amazon is playing down the ‘voracious corporate beast’ angle, saying the Marketplace represents a good opportunity for smaller Australian retailers struggling to find audiences.

“The internet and technology have the power to level the playing field between big and small businesses, empowering Australian companies, large and small, to grow their sales and their business online,” said Rocco Braeuniger, Australian Country Manager, Amazon.

“We look forward to enabling local businesses to make their products available to a wide audience, not only in Australia, but also worldwide.”

While established retailers certainly face a challenge with the giant’s arrival, it’s a great opportunity for savvy entrepreneurs hawking physical products to reach new audiences.

“For those who are selling physical products, Amazon provides a great opportunity to get these products in front of customers and we encourage businesses to take full advantage,” said Adam Mills, co-founder of Queensland tech startup KoalaSafe (a company selling child-safe internet monitoring devices online), who will be speaking at the summit.

The forthcoming arrival of Amazon is causing independently-minded businesses to both gnash teeth and hustle. This effect (‘The Amazon effect’?) in which online retailers outside of the Amazon umbrella try to strengthen their position through better systems, more attention to service and a renewed focus on point of sale is surely good news for customers.

Because there is certainly room for improvement. A survey of 270 SMEs and enterprise retailers plus another 1300 consumers (State of Shipping in Commerce conducted by Temando earlier this year) found a ‘continued gap between retailer capability and consumer expectation’.

For the customer, shipping is a highly salient element of the buying experience, with 65 percent of consumers having abandoned carts due to the high cost of shipping at some point. 59 percent of customers say that a negative shipping experience is enough to put them off from shopping with a certain retailer again.

2016’s PayPal Insights Report makes a similar point.

Like it or not, the Australian online retail landscape is about to become much more about best-in-show user experience, flexible shipping options and of course, competitive pricing. Whatever stops businesses from meeting customer expectations around those elements will likely stop them meeting the $22.23 billion Australian online retail market.

And make no mistake: The new customer standard is the standard that will be set by Amazon.

Register here for the Amazon Marketplace Seller Summit.

 

Questions or comments...

  1. Erich Gerber

    For all of the ones who are frightened by big players, it might be wise to remember to “Stay close to your friends, but closer to your enemies”

    Reply

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