Tag: Australia

 

When you need to buy a new kitchen gadget, a designer lipstick, a branded razor, a calendar and that vital cable for your television — what’s the one easy place you can turn to?

That’s right, there isn’t one in Australia. You’re facing hours going shop-to-shop, picking up second-rate products from a local mall or ordering from various websites with delivery fees on each item and mixed rules on returns.
Amazon is the game-changer our retail landscape needs, one that transformed shopping in the UK and US years ago. Despite the hand-wringing from the retail sector that has dominated reporting on the online giant, this is mostly good news for the consumer.
You will be able to buy what you want, when you want it. It will typically be affordable. Existing brands will have to work harder to compete. It will be the arrival of Uber, or Aldi, all over again.

I lived in the UK more than four years ago, and buying books, travel accessories and homeware couldn’t have been easier. Every Christmas now, I log on to Amazon and select the perfect toiletries, chocolates, booze, games, DVDs, hiking gear and toys that I want for all of my relatives, adding wrapping and a message where needed. It’s the work of minutes.
In the four years I’ve been in Australia, waiting for Amazon, the company has grown enormously, and it’s in fashion that investment bank Morgan Stanley now sees the biggest threat.

Its report “The Amazon Effect in Australia” says $800-million will be wiped from the earnings of chains including JB Hi-Fi and Harvey Norman, but the single biggest impact will be on Wesfarmers. The nation’s largest retailer, which owns Target and Kmart, could lose more than $428 million in earnings by 2026.
The report said department stores would be the sector worst hit, as Amazon generates up to $12 billion in sales by 2026.

Online retailer Catch Group this week announced it is having a makeover to ensure it becomes number two in Australia after Amazon, rebranding Catch of the Day as Catch.com.au and turning it into a marketplace.
Amazon Fresh will take on the grocery sector, and it is aggressively building its Amazon Prime video membership service, making inroads into streaming and refusing to stock Apple products in favour of its Fire TV sticks. Amazon entered the Artificial Intelligence field in 2014 with its Alexa speaker. This week it emerged that its shares (and those of Google) have just reached $US1000, putting them in an elite club of mega-companies.

In December, it opened the first Amazon Go store at its Seattle headquarters, a convenience store with a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines.

Australians haven’t migrated to online shopping in the landslide once predicted. Figures released by the National Australia Bank last week showed the Online Retail Sales Index — a measure of spending on retail goods — fell by 0.8 per cent in April. But even if you prefer to visit a store and try clothes on, it’s being able to get those small essentials without the painful search that will hook you in.

And Amazon is moving offline, too. In December, it opened a prototype Amazon Go grocery store at its headquarters in Seattle, Washington, which uses a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines. The eCommerce giant opened its first physical bookstore in New York last month — its seventh in the US. Amazon Books, like the Go store, does not accept cash, with Prime members using the app on their smartphone to pay and non-members using a credit or debit card.

Maxim Group today predicted a future in which Amazon will run everything from petrol stations to credit lines, Dow Jones reports.

“Consumers will be able to save money at the Amazon gas station because they belong to Amazon Prime, much like Costco members today,” said Maxim’s Tom Forte. “They will also be able to pick up and return their merchandise ordered online at the Amazon gas station.”

They’ll book their travel on Amazon, and have the firm send their suntan lotion ahead to the resort so it’s there when they arrive, he added.

But just as with Uber and co, there are serious questions over Amazon’s omnipotence. Critics say the retailer has a monopoly and is destroying small businesses — book stores, boutiques, grocery stores. There are also questions over how it pays tax.
There have been regular accusations that the company mistreats workers, with reports in December of “intolerable conditions” at a Scottish warehouse, with badly paid staff forced to sleep outside in tents to save on commuting costs.

A Sunday Times investigation found temporary workers at the warehouse were being penalised for taking sick leave and put under immense pressure to hit targets, and that water dispensers were often empty despite the intense physical nature of the job. Unions said workers were falling ill from overwork.

In the US, where Walmart is buying up smaller online retailers as it battles to compete with Amazon, there have been dozens of stories about inhumane conditions at its warehouses. But workers who spoke to Mental Floss in 2015 said conditions were relatively typical for warehouse work. In 2012, after an expose on the searingly hot summertime conditions, Amazon announced plans to spend $52 million to install airconditioning.
The company is now recruiting for hundreds of jobs in Australia as it prepares for its highly anticipated debut. It has broadly positive reviews on job sites Indeed and Seek, although there were complaints about difficult management, tough targets and short lunch breaks.

Amazon is a massive tech corporation and — mirroring Facebook, Apple and Google — there are justified concerns over its practices and treatment of employees as it grows.
However, it is time Australia caught up with the rest of the Western world and actually knew what those were.

By Emma Reynolds for www.news.com.au

Australian retailers are woefully unprepared for the imminent entry of US tech giant Amazon and many could go under if they don’t lift their game.

The online goliath is due to hit Aussie shores this September but a new analysis shows almost a third of Australian retailers are blissfully unaware Amazon is preparing to set up shop.
Only 14 per cent have put any serious thought in to competing with global brand.
This blissful ignorance could be a huge mistake.

While some of the smaller retailers unaware of Amazon’s plans could be hit hard, an analyst told news.com.au one of Australia’s major stalwarts could suffer greatly: Woolworths’ struggling discounter Big W.

Amazon is hoping to launch in Australia in September.

The Commonwealth Bank Retail Insights Report, released today, found 49 per cent of retailers are unfazed by Amazon’s Australian push, with only 11 per cent seeing the company as a significant threat to their business.
Yet, in the US the so-called ‘Amazon effect’ has seen its share price skyrocket as shoppers flock online, while bricks and mortar retailers shutter shops.
CommBank’s National Manager of Retail, Jerry Macey, told news.com.au many Aussie retailers had no idea what they were in for.

“30 per cent of retailers said they aren’t even aware of Amazon and that was even bigger number for small companies, purely online stores, or retailers in rural areas.
“This is concerning when you consider the impact Amazon has had on the US, a very mature market.”
A third of retailers had no idea Amazon was coming to Australia, claims the Commonwealth Bank Retail Insights Report 2017

The key area where retail is falling behind is innovation.
CommBank measured levels of innovation across a range of Australian industries.

While half of Australian retailers were experimenting with new strategies to attract and retain customers — just above the all industry average — they still lagged behind the telecommunications, education and mining and sectors.

Worryingly, retail innovation was erratic, often uncoordinated and the value retailers were generating from trying new things was less than half that of the average of all other sectors.

“In retail, innovation is not holistic. There are small innovations, in one area of business, but if you look at strong innovators they are being innovative across a number of areas like marketing, organisational structure, product and process,” said Mr Macey.

The online innovations that were occurring in retail, like click and collect, weren’t game changing and were way behind industry leaders.

“Just look at Amazon Go — this is a physical store where you pick things off the self and sensors know what you’ve put into your bag and you can just walk out — that’s innovation,” he said.

Amazon has launched the Amazon Go trial supermarket where hi-tech sensors mean customers just grab products off the shelf and go, paying directly through their Amazon account.
Amazon has launched the Amazon Go trial supermarket where hi-tech sensors mean customers just grab products off the shelf and go, paying directly through their Amazon account.Source:Supplied
Geoff Dart, a retail consultant with DGC Advisory agreed Amazon would change Australian retail.
“They will have an impact. If you’re a retailer, you always have to assume the worst when Amazon comes in.”
The US company was the next wave in a retail revolution sweeping across Australia’s high streets and shopping centres already changed forever by the emergence of international fast fashion brands.
But, said Mr Dart, new competitors — such H & M, Zara, and Uniqlo — had already forced some home grown stores to buck up their ideas. As such, many were now far better prepared for the onslaught of Amazon.
“Australian retailers were very complacent, but if you look where they are now Myer has really lifted, and so have Kmart and Target.”
Myer now stock rival TopShop’s products in their stores.

Rather than battling against the overseas onslaught, Myer is now actively working with would be competitors — such as TopShop and UK department store John Lewis — by stocking their products.

However, there was one long standing Australian retailer that Mr Dart was worried about.
“Big W don’t know who they are in my opinion, they are stuck in the past while Amazon know who they are have a good customer proposition.”
In the six months to January, Big W’s sales slumped 6 per cent while its earnings fell 137 per cent leading to a loss of $27 million.
News.com.au contacted Big W to ask how they were innovating, fighting back against increased competition and bringing in new customers. The company chose not to comment.

Following Woolworths’ closure of the Masters home improvement chain late last year, speculation is rife that the company is preparing the ground for either a sell-off or float of Big W.
Nevertheless, Mr Dart didn’t think Amazon would get a completely free ride when it lands.
While last week Fairfax reported that Amazon is planning to “destroy the retail environment in Australia”, Australia’s huge size and relatively small population would mean Amazon’s warehouse and distribution costs would be higher compared to other markets.
In particular, Mr Dart said Amazon would struggle in a key area which will please Coles and Woolies.

“They’re going to fail at food. Australians are very conservative when it comes to food and if they have a bruised banana in their delivery, Amazon is going to have to replace it and that’s not going to happen.”
For Australian retailers, their trump card was their store network, he said, as it gave brands a presence on the ground. Mr Dart predicted further consolidation in the sector, citing JB Hi Fi’s recent purchase of The Good Guys.
But the real innovation could be if competitors started working together to combat the international online threat.

“Retailer co-operation is a big opportunity. Why couldn’t you pick up a JB laptop you have ordered online from a Bunnings or Kmart? All of them have fixed costs and want to amortise that and one way of doing that is to increase traffic and people picking up goods is a way to do that.”

Mr Macey said some Aussie retailers were being ingenious at innovation.
He cited efforts to ‘personalise’ the shop by allowing customers to visualise online a new rug in their living room, say, or how they would look wearing a new shirt.
However, on the whole, retailers needed to have an innovation reality check.

“Retailers need to be honest in where they are in terms of their ability to innovate. They need to take advantage of changes in the marketplace, experiment, not be afraid to fail but if they do fail, fail fast and inexpensively.
“Retailers need to build a innovation culture and be agile and creative in the future.”

By Benedict Brook for www.news.com.au

Officeworks stores in Australia – already pretty big – are likely to get even bigger as the Wesfarmers-owned chain plans to add new product lines, including drones and 3D printing. The moves comes as Officeworks already dominates the office supplies business in Australia and continues to show growth.

“We’re a $1,8-billion business in a $55-billion market with plenty of room to grow,” Officeworks MD Mark Ward told Fairfax Media.

He says Officeworks is now considering opening larger stores to accommodate its expanding offering – including drones. New stores could be between 3 000 and 4 000 square metres, compared with the stores’ current average size of 1 200 square metres.

Source: channelnews.com.au

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