They’re here: Before it’s even launched, Amazon is already at the front of Australian shoppers’ minds
They haven’t even started a full local service yet, but the brand values of e-commerce giant Amazon are already deeply entrenched in the Australian market, argues strategist Wayde Bull
Australian businesses need to stop obsessing about the pending arrival of Amazon.
That’s not to say the fear is unwarranted, however it is somewhat misguided. A quote from the seminal 1980s film Poltergeist comes to mind when you’re talking Amazon: they’re here.
Yes, we’ve been able to purchase from Amazon’s Kindle store for several years and the Amazon Prime video streaming service launched here six months ago. But more importantly, the brand name and its powerful reputation for value are already solidly established in the minds of Australian shoppers.
I think it is fair to say that Australian customers, while they may have purchased smaller products, books, clothes, etc from Amazon via their .com store, were unlikely to consider them for more major purchases especially in home electronics. The shipping alone would have prevented this being viable let alone the difference in voltage of many of their US centric range. These are the retailers who should really be worried about their Australian arrival.
It will be interesting to see the electronics retailers. If we look at who stocks this stuff and charges an absolute bomb today in Australia for cables, phone chargers and small electronics all the way up to bigger kit: Jaycar, JB Hi-Fi, Office-works, Harvey Norman, Dick Smith’s, Good Guys, Bing Lee…
Dear Gerry is out with his PR in full force and his mate Rupert is giving him plenty of pages / pixels. Gerry’s spin today is along the lines of: ‘It will take Amazon ages to secure realestate, let alone open the doors…’
Interesting times.
That kind of comment (Gerry’s) shows just how delusional he actually is. In Gerry’s world “securing real estate” amounts to actually finding a perfect property in a perfect location with a large catchment area which he can buy and lease back to store proprietors. Bricks and mortar retailers obviously live and die based on their distance from customers – hence why the rental rates in shopping centers what they are.
Amazon, within reason, can set up anywhere with appropriate access to infrastructure and, short of transport for staff on site, don’t really care what their “catchment” looks like. In fact, if there is a massive unused plot of farmland on the side of a freeway within reasonable proximity of a capital city / port / airport / train line and bus for staff then I am pretty sure they can rent that and put a warehouse up there a lot quicker, easier and cheaper than Gerry can find and build / fit out a store. Im also sure that the “catchment” of Amazon’s location will be FAR higher than Gerry’s.
After all, they have been doing pretty fine up till now with ZERO real estate secured locally.
I pity the shareholders who depend on the understanding exhibited by many Australian retail company leaders …..
“Amazon’s capacity to offer value of such a deep and interlinked nature suggests the need for local retailers to find a foothold on factors other than value alone.”
Precious little evidence of that to date.
Spare a thought for the warehouse workers. The stories abound about how abusive the Management style is, timed piss breaks and go-faster culture designed to break the spirit. I know people will say ‘sourgrapes’ but let’s not mistake the terms and conditions of software and marketing staff for the ones applied in the back room doing the box lifting. Amazon staff will need a good union and a good EBA posture.