Wednesday, April 24, 2024

Retail sector reacts to Amazon launch

Despite being one of the biggest retail launches in the country, Amazon still isn’t offering its complete suite of products and services. 

Earlier this week, Amazon Australia officially launched its retail offering of millions of products across 20 categories with benefits such as everyday low prices and fast delivery options.

However, while customers can enjoy free delivery on eligible orders above $49 and one-day delivery service in select areas across Australia, Amazon’s three-hour delivery service was notably absent from the website.

National Retail Association CEO Dominque Lamb notes that while Australian retailers may be concerned about how the launch will affect market share, the marketplace may also pose challenges for Amazon.

“Australia is a vast country, which is sparsely populated when compared with other Amazon hotspots like the US and UK and [has] less infrastructure to support it, as well as some of the most complex and challenging IR laws and some of the highest wages in the developed world,” she said.

“Customers are spoiled for choice and naturally want the cheapest products, but now Amazon is in Australia, it will have to deal with these same unique challenges just like everyone else, and find effective ways to tackle them.”

The NRA says Amazon has established its strong customer base in the US by offering a wide range of goods at a low price, with incredible convenience and lightning-fast delivery, rising to account for more than one third of the US’s total online sales, and dominating every market it enters.

“But with 363 square kilometres for every 1,000 people here, as opposed to 30 square kilometres in the US, which is 12 times the land mass per 1000 people, it will be extremely difficult for Amazon to service customers the way they’re expecting,” Ms Lamb said.

“Given shoppers now expect rock-bottom prices and super-speedy delivery from Amazon, they’ll be far less forgiving if it can’t live up to the hype. Moving our goods around the country takes more time, more resources and more people – all of which costs more money.”

While initial figures for the launch are yet to be announced, Nielsen digital-ratings data reported that 4.6 million Australians accessed Amazon’s US site during October this year.

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