Is Amazon Prime set to change the Aussie retail landscape?

There has been a lot of talk about the impending arrival of Amazon but it still seems not everyone is listening as the vast majority of retailers are completely unprepared for its arrival, according to a new survey.

The retail giant promises cheaper prices, faster delivery times and access to a greater range of products and while Australians can already buy from Amazon, local warehousing will enable the company to dramatically expand the kinds of products it can deliver.

The survey says that while 90 per cent of respondents know that Amazon is on its way, only 48 per cent know of Amazon Prime, which looks set to be a game changer for Australia.

“The Amazon Prime offering is more advanced than almost any of the services offered by retailers in Australia,” says Tzvi Balbin, founder of digital marketing agency DataSauce, which undertook the survey.

“This means that even those who have upped the ante with quicker delivery times may still struggle to compete with this service and match the level of investment.”

Amazon Prime enables customers to pay an annual fee of about $100 for free and fast delivery―about 60 million US households have signed up to this service so far. There is also Amazon Now, which promises to deliver products such as groceries in under an hour. Both have the potential to really impact Australian retail.  

Balbin, who is the former head of digital at Catch of the Day, trialled the Amazon Prime service a number of times on a recent trip to the US, and says the sheer ease and speed of the service has the potential to derail a number of Australian retailers.

“Amazon Prime in particular could be a game-changer in the Australian retail space. For many retailers, trying to compete with one or two day delivery and free shipping may prove too much for them to be able to compete.”

He advises retailers not to try and beat Amazon at its own game, but instead they must focus on what they are good at and what sets them apart from others.

“You’ve also got to look at how omni-channel your business is, so the shopping experience is seamless. A number of physical retail outlets are optimising their customer experience so it’s seamless offline and online. It’s not enough to have in store pickup and claim to provide a true omni-channel experience.

“At the end of the day, to beat Amazon you need to focus on their weaknesses. Niche down, build and nurture a fanatical community, tell a story and leverage loyalty. After all, Amazon is a one size fits all,” he adds.

By Marion Gerritsen