Taming the anaconda: Aussie businesses can beat Amazon at the e-commerce game
With Click Frenzy kicking off tonight and amid warnings over the state of Australian e-commerce Mark Troselj says there are some simple things local businesses can do to beat international pure-plays like Amazon at their own game.
Warnings by GroupM’s digital boss last week that Amazon has the potential to crush Australia’s e-commerce market “like an Anaconda” should not be written off as hyperbole. Too many Australian businesses have been slow to grasp the enormity of the wholesale transformation of the global retail sector and have procrastinated at the expense of market share and current and future revenue streams.
Alarmingly a recent Frost and Sullivan report ‘Disrupt, Collapse, Transform,’ revealed that although digitalisation, new disruptive competitors and new business models are driving change, only 38 per cent of Australian retailers have the ability to transact online.
You read that correctly.
I’ve never heard of Netsuite but taking a wild guess do they sell cloud based ecommerce software.
In theory this all sounds great, the one thing Mark forgot to mention is Amazons total fixation on market share grab at the expense of profits. Amazon has very deep pockets and patient shareholders and are reporting quarterly losses that would sink any Australian retailer.
The 62% ruling themselves out of the game will no doubt make a lot of noise as their business dies. Complaining that they can’t win a game they can’t even be bothered playing. No doubt every other target under the sun – union’s, land owners – nefarious “red tape” and “them thar oversees fangled retailers” will be blamed. Not once will they mention they didn’t even try online.
The 62% includes a lot of franchise retail. The problem is that selling through a central website arguably deprives franchisees of sales, which is trouble.
One approach is to divvy up online sales geographically – similar to the way Domino’s website sends your order to your local store. But this still isn’t perfect for franchises with CBD and suburban locations, because when a city worker buys online, the sale might get attributed to the store closest to their home, instead of the CBD store from which the sale was arguably cannibalised.
That’s part of the complexity, anyway.