Amazon Prime Works to Lure in Australian Consumers

April Davis By April Davis | 16 Jul 2018

With Prime Day about to launch in Australia for the first time at 12 pm on Monday, July 16, Amazon is pulling out all the stops to shift consumer behaviour in its favour.

Since its Australian launch in December 2017, the product offering and price points available on Amazon.com.au have underwhelmed consumers and sellers alike. However, Prime Day could be about to change that.

The fourth annual shopping event is more than just an opportunity for the global e-commerce player to flex its marketing muscles and juice its sales numbers, it’s also a chance to attract more Prime members.

This year, analysts estimate Prime Day will be bigger than it has before, with global sales expected to reach a minimum of $3.4 billion. According to Coresight Research, this is a modest prediction, and Amazon will likely rake in a lot more from the 36-hour sale event.

According to data from Starcom, Prime members, on average, spend 4.6 times as much on the platform as non-Prime customers and shop three times more often. Customers also seem to be on board with the new membership offering, with 52 percent of consumers who have visited Amazon’s local site since its launch reportedly saying they’re interested in joining the program.

It seems Prime is also part of a larger, long-term strategy, as Amazon works to become a dominant player in the Australian e-commerce market. In the last six months, there have been tangible improvements to Amazon’s local offerings, including product range, fulfilment options and price points.

When it first launched, Amazon offered consumers 22 million products, now, the platform reportedly boasts 60 million. Since launching Prime, consumers have also been given access to two-day delivery across 90 percent of the country.

Recent research from Starcom has also revealed that first-party stock on Amazon is, on average, 17 percent cheaper on Amazon.

Although, News.com.au has reported that Amazon still has great steps to take to really draw savvy consumers to its marketplace, noting the price point of an Apple computer that retails on the online marketplace for $1449, but as little as $1169 on Kogan.com. It’s also interesting to note that the company’s Echo Dot is advertised for $79 on Amazon and only $55 on Kogan.com.

In a community driven by discount homewares and electronics from retailers like Aldi and Kmart, it’s not surprising that Amazon is having trouble competing on price in Australia.

Amazon has also been facing stiffening competition from eBay, with Australia’s most-visited online marketplace releasing its own set of new initiatives to rival Amazon’s local offerings, including its new fulfilment service, eBay Plus membership, and exclusive online sales events. Although, Amazon doesn’t seem to be phased by the competition, as Prime seems to be its biggest chance of success in the country.

Despite launching in the same week, Amazon Prime reportedly received three times more online searches than eBay’s new loyalty program, eBay Plus. Upon launching Prime, downloads of Amazon’s app also increased, with Business Insider claiming it jumped from spot nine to six in Australia’s list of the most downloaded apps.

Kicking off with an annual price of $59 in Australia, it’s widely believed that this ‘low’ membership fee will increase as Amazon adds more service offerings to its local Prime membership. If Australian consumers behave the same as their UK counterparts, it’s likely Amazon is unconcerned about membership rates being affected by price increases. Data analysed by Business Insider suggests this is because its UK membership rates didn’t cause a fluctuation in interest when the price increased from £49 to £79.

While Australia is a relatively small market for the e-commerce juggernaut, Amazon seems to be pulling out enough stops to peak consumer interest.

“Having just launched Prime in Australia, we are delighted that Australian members can now enjoy the unparalleled combination of shopping and entertainment benefits that Prime gives them,” said Rocco Braeuniger, country manager of Amazon Australia. “We hope that Prime Day will provide them with even more value.”

Starting at 12 pm AEST on Monday, July 16, the members-only sale event will run for 36-hours and offer some “great” deals for shoppers.

Consumers will reportedly have access to a host of exclusive deals on books, electronics, DVDs, video games and smart home tech, as well as cookware, kitchen appliances, toys, fashion and everyday essentials from across amazon.com.au.

Amazon’s private label brands and in-house tech will also be offered at reduced prices, with “incredible” savings expected in Alexa-enabled products. Gamers are also set to benefit from the lead-up to Prime Day, with Twitch Prime reportedly giving away a free PC game every day until July 18, with Pillars of Eternity and Brutal Legend among the titles up for grabs.

Australian consumers can join Prime for free on a 30-day trial, with the introductory member price currently sitting at $4.99 per month or $59 per annum until January 2019 when the monthly membership is expected to increase to $6.99.

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