AUSSIES ONLINE

Amazon officially launched its full retail and Marketplace offering in Australia early December 2017 after much anticipation. Millions of products in more than 20 categories ranging from clothing, shoes, beauty and homewares, to electronics, tools, toys and sports, are now available for purchase on Amazon.com.au.

The biggest question mark surrounding Amazon had been its delivery offering in Australia, with some sceptics wondering whether the retail giant could support free same-day or even two-day delivery nationwide.

Franchised logistics businesses CouriersPlease and Fastway Couriers are both delivering Amazon-ordered goods.

Peter Lipinski, CEO of Fastway Couriers Australia, said while he couldn’t comment on Amazon, Fastway was geared up for the demand.

"This is an exciting time for Australian consumers and we’re proud to working closely with all our customers to facilitate the best delivery experience for their online shoppers.

"Given Australians’ appetite for shopping online, we anticipate an immediate increase in volume."

The initial rollout of the online marketplace did not include Fulfilment by Amazon (FBA), a warehousing and fulfillment solution for Marketplace sellers, or Amazon Prime, a loyalty program that offers members

unlimited free shipping on eligible products, video and music streaming services, access to exclusive products, among other benefits.

Amazon Prime is set to launch in mid-2018, while FBA is said to be coming soon.

CONSUMER ONLINE APPETITE

According to a recent UBS report, the e-commerce giant could steal 2 per cent of retail sales within five years of entering Australia, growing revenues from more than $400 million to about $3.5 billion by 2023.

Australians already show a willingness to shop online. Nielsen research shows that Amazon’s US site converts almost one-in-two (49 per cent) Australian visitors into sales - the fourth highest behind eBay (78 per cent), The Book Depository (74 per cent) and The Iconic (53 per cent).

Expectation around Amazon’s arrival on Australian shores ramped up with 75 per cent of Australians aged 18+ confirming their interest in Amazon Australia; 56 per cent predicting they will purchase from its Australian site; and 45 per cent willing to pay to become an Amazon Prime member to receive special deals, discounts and delivery perks.

So what categories are they likely to purchase? Nielsen’s 2016 Global Connected Commerce Report showed the consumers online purchasing habits are focused on durable categories, such as fashion, travel and books, music and stationery online.

According to Inside Retail, Amazon revealed its best-selling products in its first week of sales on the Australian site showed Aussies love technology.

Eight of the top 10 products purchased were in the tech category. The two non-tech items to make it to the initial top 10 were books.

While in general Australians are fairly brand loyal, a more competitive marketplace may see that loyalty put to the test, according to retail consultant Paul Downs.

The managing director of e-commerce company Hitworks believes some Australian retailers may have become complacent about providing outstanding customer experiences.

“In other countries where the marketplace is far more competitive the customer experience is paramount. That hasn’t always been the case in Australia,” Downs said.

“What’s going to be interesting to see is how the consumers respond to having more choice. Amazon provides such good quality of service, choice and price we will see if consumers stick with Aussie brands or go for value and customer service.

“I believe faced with a choice, Australians will go for the best offer, quality of product and service.”

While Amazon provides a marketplace for Australian companies to sell, the downside for some retailers, for example those in electronics or books, is that they will struggle to compete with the enormous buying power, technology resources and artificial intelligence of Amazon if the global giant takes any aggressive approach to acquiring customers.

“And it’s a totally awesome experience for the consumer. For example, a consumer can go into a branded electronic shop, look at a product and then go and buy it on Amazon for a price most local retailers won’t be able to match. In addition, the retailer also must carry the cost of running the store. Really, from the consumer’s point of view there is more choice, lower price and better delivery," Downs said.

“So, if you want to hold on to your customers, it comes down to the consumer experience. Customers are loyal to brands that work for them. My advice is to focus on your own business and give the best experience to the customer – that’s your only defence.”

He believes providing an omni channel framework, which gives the customer the ability to browse and shop from their mobile, laptop, PC then go into the store and look at the product, is essential for retailers.

Downs said while the technology was already available, its implementation was happening slowly.

“Click and Collect has been a big crossover. A lot of retailers have been implementing it but it has been a real challenge for them,” he said.

“Previously all you needed to know was how much stock you’ve got in your stores, but now you need to know exactly the size and colour is available for sure it’s in that store and has not been purchased. Customers don’t like it when they turn up to collect their purchase only to find it’s not there … it’s a terrible shopping experience.”

WHAT’S HAPPENING TO HIGH STREET STORES?

In Australia, the types of stores that are most markedly vanishing from local shopping areas are: bookstores (reportedly seen less often by 48 per cent of Australians compared to 39 per cent globally), newsstands (41 per cent) and any type of independently-owned and operated (non-chain) stores (35 per cent).

It’s a different story for other retailers as Aussie consumers reported seeing no decrease in the number of drugstores and pharmacies, eat-in restaurants, cafes, and stores or restaurants selling readily-prepared or takeaway food. Although the reported level of takeaway food restaurants is on the rise, only 11 per cent of Australians are eating takeaway food more often, compared to 18 per cent of the global population.

Instead more than one third of Australians (35 per cent) are purchasing takeaway food less often than three years ago.

These are the findings of a Global Advisor survey on shopping behaviours, conducted by independent market research firm Ipsos.

While consumers are shopping more in general than three years ago (both instore and online), a higher percentage of Australians are more frequently shopping online (on average, 16 per cent are shopping more online across different products and services, and 12 per cent are shopping more instore).

The self-reported personal care and social activities the most on the rise are food-related: 17 per cent of Australians are both eating at restaurants and going to cafes more often than three years ago. Fewer Aussies are movie-goers today (40 per cent) while more than one third (36 per cent) are vising bars/pubs less often.