Retailers at the crossroads

In the Amazon tug-of-war.

In the past 12 months, one in four Australians have made a purchase on Amazon, and 25 per cent now spend less at other retailers because of the online giant, while 8 per cent are prime members. This latest research from the Retail Doctor Group (RDG) is showing how Amazon has changed consumers purchasing habits.

“Australian retailers are at the crossroads,” RDG CEO Brian Walker said, “should they compete with online behemoths like Amazon, or collaborate?”

He said data privacy is also an increasing concern for consumers. “Trust and customer experience are the key drivers in the new retail landscape. If retailers sell online they need to reassure consumers that their data is safe. For bricks and mortar shopping the strategy needs to focus on experience. Creating a shopping experience, as opposed to buying convenience, is what wins in retail stores.”

RDG has delved deeper into the effects the online retailer is having on the retail landscape and will hold a series of breakfast events in Sydney and Melbourne on July 23 and 25. The sessions will also look at the rise of artificial intelligence and whether data privacy is going to become an issue for online retail.

In Europe, a Future Shopper study from Wunderman Thompson Commerce, found that the Amazon could be facing challenges with younger consumers who have reported less satisfaction with Amazon than older generations, when it comes to brands, ease of returns and customer service.

Factors that influence the decision to buy elsewhere included cheaper pricing, more attractive loyalty programs, more convenient delivery options and a more specialised product range. And in good news for bricks and mortar stores, more than half of consumers surveyed prefer to shop with a brand that has a physical store. However, the report also showed that when it comes to entertainment, technology and home/garden product categories, Amazon was the preferred shopping option.

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