Amazon tipped to kick off with Frenzy as Myer plots fightback
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.