Amazon who have confirmed that they will be fully operational in Australia by 2018, is set to target the consumer electronics market in 2017, with global manufacturers now working to embrace the global online retailer.
Several brands that ChannelNews has spoken to have confirmed that they are adopting an Amazon Australia strategy based on how they currently sell via the online retailer overseas.
A major global headphone brand has already moved to pair back the number of retailers who are approved sell their products in Australia as they do not want a small online retailer using their products as “lost leaders to attract traffic”.
The move is set to impact the specialist sound channel.
They claim that Amazon has the artificial intelligence technology to scope pricing on local sites and then set a price “based on the cheapest identified price”.
They claim this could lead to their mass channel retailers being impacted based on a “rogue” price that brings down the overall pricing of a product.
A major TV supplier has said that they currently supply TV’s to Amazon that are “not” the same models supplied to mass retailers.
The models supplied to Amazon do not have the same components as similar models sold via the mass Channel.
According to sources Amazon will kick off their Australian operation selling a mix of small appliances, consumer electronics goods and fashion, they will then move to selling food in 2018.
Several global brands have said that if their overseas experience with Amazon is anything to go by they expect the online retailers to outsell local retailers, across several categories within 24 months of establishing their operation in Australia.
It’s also been confirmed that new Amazon Go stores will be established in Australia.
These stores let customers grab goods and just walkout with the total bill charged to your Amazon account.
This means Amazon will offer a vast array of products from its flagship website, plus launch an Australian version of its Prime Now program, which provides fast shipping to members on a huge range of products, from groceries to hot meals.
An Amazon executive supporting Amazon’s grocery rollout globally told Fairfax Media the retailer will “launch as many services and products as possible within Australia” as it views the country as an “attractive” market.
Brittain Ladd, senior manager, Amazon Global Logistics said that Amazon will only launch Amazon Go only after Amazon has become more established in the country and analysis determines the market will support physical stores,” said.
ChannelNews understands that both JB HI Fi and Harvey Norman have in place management teams who are preparing a means by which these two mass retailers can compete head on with Amazon.
Both groups are looking to establish their own ‘Market Place’ Stores.
Fairfax claim that Mr Ladd, when working for consultants Deloitte years ago, advocated Amazon roll out a different kind of supermarket – a so-called “multi-format store” – to get a bigger slice of grocery sales. Amazon is considering this kind of store in Australia.
The stores would be smaller than a typical Woolworths or Coles store and similar in size to an Aldi store, he said in a piece called “A Beautiful Way to Save Woolworths.”
Mr Ladd told Fairfax Media, “Australian consumers will embrace online grocery ordering and delivery from Amazon. And I believe Amazon’s retail store formats such as Amazon Fresh Pick Up or the multi-format store can be successful in Australia and south-east Asia.”
