NRA: Amazon may not live up to expectations

Due to unique geographic challenges.

The National Retail Association (NRA) has praised the Australian retail industry for its innovative approach to overcoming the red tape, cost and logistical challenges unique to the Australian marketplace, on the back of the much-anticipated, but underwhelming, launch of Amazon Australia.

NRA CEO Dominique Lamb said Australian retailers are innovative and have shown remarkable resilience throughout many competitive challenges.

“Australia is a vast country, which is sparsely populated when compared with other Amazon hotspots like the US and UK and 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,” Lamb said.

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

The NRA said Amazon has established its extraordinary 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 kms for every 1,000 people here, as opposed to 30 square kms in the US which is 12 times the land mass per 1,000 people, it will be extremely difficult for Amazon to service customers the way they are expecting.

“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 the online market is undoubtedly growing here, it’s just one component of a dynamic and varied retail environment and we don’t expect that to change anytime soon simply because Amazon has entered the marketplace,” she said.

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