There is a divide amongst retailers and industry heads when it comes to Amazon in Australia. Most say they embrace it, but few are eager to put their hands up and say they fear it.
From the well before the day Amazon officially announced it would be rolling out its full suite of services in Australia, local retailers have been on high alert. With Amazon now setting up its first fulfillment centre in Melbourne’s Dandenong South, it’s much more of a reality. How are our retailers and industry heads feeling about this, and how will they remain competitive with new entrants in the market?
Speaking at MyDeal’s recent Australian E-commerce Marketplace Summit held in Melbourne on 11th August, Sean Senvirtne, founder and CEO of Mydeal.com.au, Nick Kenn, general manager of marketplace growth at Redbubble and Marc Gauci, head of e-commerce business development, e-commerce platforms and marketplaces at Australia Post shared some of their insights on Amazon in Australia.
Sean Senvirtne, Mydeal.com.au
“There’s a saying that, “A rising tide lifts all boats”. I reckon a lot of Australians are still to gain more trust in online purchasing, and more users are yet to go online. Amazon will allow online shopping to set sails in Australia. I think people will get more comfortable with online shopping. But as Amazon starts to get their traction, the rest of us (retailers) need to keep up. I think it’s going to be very much about keeping up.”
Senvirtne says innovation is key when it comes to MyDeal competing with Amazon, and thinking about different ways to amp up the offering to the customer. “When it comes to innovation at MyDeal, we currently we have a database of around two million customers and we have a very good understanding of who these customers are. So, what we’re currently doing is thinking of ways we can add new layers to what we are already offering to these two million customers. We know these people also have home loans, insurance or bills to pay… We operate on a model of creativity and innovation and we strive to continue to raise the standards.”
Nick Kenn, Redbubble
“Redbubble operates globally, so essentially we’ve been competing with Amazon for 11 years. How do we compete? On three levels: timely, affordable and personalised. We have to ensure that our products get to our consumers in a timely fashion. What we’re seeing with (Amazon) Prime is one day or two hours in some cities – so how do we compete with that? Well, we have to optimise the supply chain. How do we make our products affordable? We compete on price and we negotiate with our suppliers.
And, for the personalised aspect, which is really our standout and unique selling point, with our range and content – Redbubble can really sell something that truly personalised for every single person in the world, in fact, 11.5 million pieces of artwork – there’s something for everyone. We set up this personalised content for each user wherever they are, at whatever price they want for whatever they’re interested in. So, timely, affordable and personalised is how we can compete.”
Marc Gauci, Australia Post
“Amazon is very discreet and guarded about their logistics plans, which we (Australia Post) respect. I think it’s a fantastic opportunity for Australian merchants; it’s going to be a brilliant outcome for Australian consumers on the buying experience. They will push service levels across spectrum to new levels and it’s a great opportunity to use, in our world, delivery as a point of difference. We embrace any discussions that might take us there.”
When it comes to fear or embrace, I for one fall into both categories. Definitely, there will opportunities for the marketplace to grow and for e-commerce to get a greater slice of the retail pie in Australia as a result of Amazon. Let’s not be complacent though, there will be a burn – those online retailers without a point of difference and those competing mainly on price will mostly suffer, but for the vast majority of retailers, I do not feel there will be too much upset, not at first anyhow. But there will be a burn, a slow burn that is. While it’s an exciting time for retailers in Australia to raise the bar, I think it’s an even more exciting to be a consumer.
We’re keen to hear your thoughts on this. What is your feeling about Amazon entering the marketplace? Please feel free to post your comments below. We’d love to hear from you.