Australia’s Retailers Unite to Challenge Global Online Giants
In a bold move to take on global online retailers like Amazon, Australia’s major retailers have joined forces to launch a four-day shopping event aimed at rivalling their competitors. Since Amazon set foot in Australia in 2017, the company has poured approximately $15 billion into expanding its operations, establishing massive warehouses across the nation capable of holding millions of items sold through its website.
Amazon’s Impact on the Australian Retail Landscape
- The foreign-owned company has created thousands of jobs in major Australian cities, employing around 7000 people and engaging thousands more in construction to build its colossal warehouses.
- Sandra McNeil, Amazon Australia’s operations manager, stated that the investment would enhance Amazon’s operational footprint, offering customers a wider variety of products and faster delivery.
- Research conducted by Roy Morgan revealed that during the last financial year, 7.9 million Australians aged 14 and over shopped at Amazon at least once, representing an increase of over 1 million shoppers from the previous year.
- Australian retailers like David Jones and Target saw a decline in customers by five to seven percent during the same period, indicating the growing popularity of online shopping.
- Roy Morgan also discovered that Australian Amazon shoppers make purchases on average six times a year, almost as frequently as Kmart customers shop at Kmart (7.5 times a year).
- Amazon’s future plans include expanding into big-box retail, offering furniture and large electrical items, as well as entering the ultra-cheap market by selling non-branded products under $30 shipped directly from China to consumers.
Analysis of the Retail Landscape
The growing dominance of Amazon in the Australian retail market signals a significant shift in the industry. With Amazon’s upcoming expansion into big-box retail and the ultra-cheap market, local retailers face increasing competition to retain customers and offer value in a changing landscape. If Australia mirrors the US trend, where Amazon accounts for 37.4% of all online spend, the Australian retail sector could undergo substantial transformations in the coming years.
Local Response to Global Competition
- Wesfarmers, one of Australia’s largest listed companies, has introduced a new membership program called OnePass to provide exclusive deals on thousands of products for a fee, similar to Amazon’s Prime membership.
- Nicole Sheffield, Wesfarmers OneDigital managing director, highlighted the importance of adapting to a dynamic retail environment and enhancing the customer experience through value-driven programs.
- The success of OnePass among consumers demonstrates the value proposition offered by trusted Australian brands like Bunnings and Kmart, fostering loyalty and attracting savvy shoppers.
Consumer Perspective and Support for Local Economy
- Angelique Oliver, a member of the OnePass program, highlighted the convenience and savings she experienced by purchasing from Australian retailers through the platform.
- Supporting the Australian economy by buying local products not only ensures quality and convenience but also contributes to the overall economic well-being of the country.
As the retail landscape evolves with the entry of global giants like Amazon, Australian retailers must focus on delivering value, building trust, and offering unique experiences to retain customers and thrive in a competitive market environment. By supporting local businesses and embracing innovative solutions, consumers can play a crucial role in shaping the future of the Australian retail industry.