CEO shares his insights.
Betta Home Living chief executive officer, Graeme Cunningham (pictured below), has shared insights from his recent company conference which provided delegates with the opportunities that will come from the arrival of Amazon into the Australian market.
International retail consultant Jim Dion worked with Cunningham during the conference to provide retailers with some important information about the arrival of the Amazon business to Australia, including a number of rarely discussed insights.
“Amazon’s performance in North America is not comparable to the local market,” Cunningham told Appliance Retailer.
“Canada is closer to the Australia market, but due to cross border shipping, it is still difficult to make a direct comparison. From our market analysis, we believe they will achieve low single digit shares in certain categories – with the impact not just effecting those categories but more the expectations of the customer that will change – in particular the service levels. While our stores do quite well when it comes to service delivery, these guys will take it to a whole new level. Our advice is to be aware and prepared and to understand that part of the change may come from the reaction of other retailers do to price points and margin pressures.
“In general though, we need to be preparing for competitors regardless of type – Amazon is just one of these. We will be improving our digital performance, and our logistics offering as well as our in-store experience. Every touchpoint of our customer experience needs to be reviewed. As the franchisor there is only so much we can do as there are several aspects that our stores have to execute such as presentation in store right through to the delivery drivers.
“Amazon does not have a few things – and one of them is shopfronts and we have over 200 pick-up locations throughout Australia. Best Buy has been able to take the fight to Amazon in the US by increasing their online sales with pick-up instore. There is no other country where Amazon works like America and to put this in perspective when you look at the available data – around $120 billion of their $170 billion forecasted turnover is from the US market. Amazon also took advantage of an over-supply of bricks and mortar retailers in the US market that was a problem waiting to happen for many years, particularly department stores.
“Ultimately, it is competitors that we have to be prepared for whether they are online or bricks and mortar. We also need to lift our customer’s expectations and as retailers this is going to be an ongoing challenge into the future.
“In the months and years to come, we see lot of positives associated with our business model. We are well-positioned as a group to combat any new entrant whoever that be – either online or otherwise. You can no longer tailor your strategy around one type of competitor as there are several businesses that are able to move into our product categories.”