Amazon tipped to kick off with Frenzy as Myer plots fight­back

The Weekend Australian - - BUSINESS - ELI GREENBLAT ON­LINE

US re­tail gi­ant Amazon is ex­pected to of­fi­cially launch its Aus­tralian arm within weeks to co­in­cide with a host of on­line re­tail events, led by Click Frenzy and Black Fri­day.

The re­tail gi­ant’s new regional boss Rocco Brae­u­niger and head of Amazon Mar­ket­place in Aus­tralia, Fabio Ber­tola, will ad­dress sup­pli­ers on Mon­day.

An­a­lysts and re­tail ex­perts tip Amazon will open in a pre-Christ­mas push that will test the ca­pac­ity and lo­gis­tic frame­work of its shipment cen­tre in south­east Mel­bourne, and test shop­pers’ ap­petite.

The next two weeks shape up as the most likely time for Amazon to de­clare it­self open for busi­ness to take ad­van­tage of key shop­ping dates that will see Aus­tralians spend an es­ti­mated $48 bil­lion be­tween now and Christ­mas Day.

Amazon in Aus­tralia is likely to fo­cus on the grow­ing im­por­tance of Click Frenzy, a lo­cal on­line event on Tues­day, with Black Fri­day and Cy­ber Mon­day, on Novem­ber 24 and 27 also op­por­tune times for Amazon to open its doors.

Mr Brae­u­niger will ad­dress up to 500 lo­cal sup­pli­ers in Syd­ney — in­clud­ing es­tab­lished re­tail­ers, e- com­merce busi­nesses and star­tups — who hope to join the Amazon band­wagon as it pushes new ser­vices to shop­pers.

The back­bone of its new op­er­a­tions is its pur­pose-built cen­tre in Dan­de­nong, a 24,000sq m ware­house and pro­cess­ing hive of shelf stack­ers, pick­ers and robots that will sort through the hun­dreds of thou­sands of prod­ucts that will be avail­able for de­liv­ery.

How­ever, lo­cal re­tail­ers are not tak­ing the threat ly­ing down, with many pour­ing mil­lions of dol­lars into new ser­vices and bet­ter on­line plat­forms to pre­pare for the on­slaught that in the US has de­stroyed older re­tail­ers and seen thou­sands of store clo­sures.

Last week, Aus­tralia’s big­gest depart­ment store, Myer, un­veiled its lat­est de­fence, telling in­vestors at its strat­egy day that it would launch an on­line mar­ket­place that — much like Amazon it­self — would also sell other ven­dors’ prod­ucts.

Called the Myer Mar­ket, it mir­rors the Amazon Mar­ket­place but is ex­pected to fo­cus on higher end or pre­mium fash­ion goods. It will first launch as a pi­lot scheme.

Citi an­a­lyst Bryan Ray­mond has ar­gued Amazon is likely to adopt a strat­egy of match­ing or be­ing the low­est price in the Aus­tralian mar­ket at all times, po­ten­tially spark­ing a re­sponse from ex­ist­ing re­tail­ers de­ter­mined they will not be beaten on price dur­ing the cru­cial pre-Christ­mas sales pe­riod.

“In our view, lower pric­ing will likely be the re­sult of Amazon’s lower mar­gin and re­turn on in­vest­ment ex­pec­ta­tions, par­tic­u­larly in the short term,” Mr Ray­mond said.

“A lower cost-to-serve could pro­vide sup­port for favourable buy­ing terms rel­a­tive to brick­sand-mor­tar re­tail­ers.

“Amazon has targeted a full prod­uct range with key sup­pli­ers.”

He sug­gested a larger Syd­ney site also could be an­nounced, but might not be op­er­at­ing in time for the key sale pe­riod.

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