Amazon set to rewrite Australia’s retail rule book

Amazon set to rewrite Australia’s retail rule book

19 May 2017

The Age reports that convenience of collection, innovation in presentation and a point of difference in product are some of the changes retailers are already embracing in an effort to keep customers coming to their bricks-and-mortar outlets.

Amazon has officially said it is coming to Australia and has engaged real estate agents to secure industrial properties for its huge fulfilment centres—warehouses of up to 100,000 square metres.

Amazon will likely also look at smaller sites, closer to capital cities, to facilitate its promise of having an item on the door step within hours of the purchase.

Some property experts are saying that Amazon could strike a deal with local retailers as collection points, similar to the deal Woolworths already has with eBay. Australia Post is also considering how it can work with Amazon.

CBRE’s Australian head of retail leasing Leif Olson said, “Consumers, particularly millennials, are seeking more than just a means to an end. They are looking to malls and retail outlets that offer an experience.”

Appliances Online founder and Winning Group chief executive, John Winning, said his group welcomed Amazon’s entry into the Australian market. “I think the only retailers that need to be concerned are those that have a problem with their existing business model.”

George Freney is the chief executive and co-founder of a smart local shopping app, Booodl. He said that retailers can survive the arrival of Amazon if they invest in their technology systems.

“Retailers must make sure they have a comprehensive digital presence for all stores that includes all the data about those stores. Not just product data but payments, Wi-Fi, parking etc – all the things that can help consumers discover and decide to visit them,” Mr Freney said.

Kmart executive Ian Bailey told The Australian that he expects Amazon to shake up Australia’s retail landscape when it sets up its local presence but he is confident his business can hold its own against the global online giant.

“The mistake for us is if we try to replicate Amazon, if we try to be an Amazon-equivalent, because all of a sudden we will try to be somebody we are not. It never feels right, it never looks right,” he said.