May 01, 2017 / News
With Amazon officially announcing its foray into the Australian market, it will undoubtedly shake up the retail industry. Amazon needs no introduction, but for the uninitiated, it is an American online giant that has basically dominated every retail sector, such as electronics, fashion, music, groceries, and so on. Amazon's presence in Australia will definitely have most retailers quaking their boots since Amazon's range of offerings is truly incredible, super convenient, and relatively cheap. To prepare for their official launch, there has been speculation that Amazon has acquired a large warehouse at the Goodman Group's Oakdale industrial estate in Eastern Creek. This massive warehouse will be utilised as Amazon's fulfilment and distribution centre.
Customers will definitely benefit from Amazon's impending entrance into Australia. Amazon will effectively increase the competition in the Australian market, which will provide customers with even greater choice, in terms of retailer and products, as well as cheaper prices in comparison to most local retailers. Prior to Amazon's official launch, is understood that the company has been gathering information on the price-points of almost everything and pricing their own offerings at a 30 percent discount.
However, Amazon's presence in the Australian market will be much more of a battle for local retailers. The convenient one-stop-shop nature of Amazon, as well as its price competitiveness, will be a hard combination to pass up for most customers. Despite this, Australian retailers won't go down without a fight. Gerry Harvey, the founder of Harvey Norman, has vowed to match or beat Amazon's low prices. This directly opposes one of Amazon's main competitive strategies to undercut its competitors and will help give Harvey Norman a fighting chance against this retail goliath. Also, despite its success in America, Australians are not as open to buying fresh groceries online. So, fresh food retailers might not feel the full sting of Amazon, as Aussies are expected to continue to gravitate towards bricks and mortar stores to purchase their perishable goods.
Amazon will pose a significant threat to local Australian retailers, due to its expansive range, convenience, and cheap prices. Amazon is predicted to knock back major established local retailers and swallow up a sizeable chunk of their revenue and market share. However, all hope is not lost for local retailers. To remain competitive, local established retail businesses must adapt to the changing playing field.
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