As anxiety mounts over Amazon.
The imminent arrival of Amazon has brought out the best and worse reactions from Australian retailers. Some are predicting the retail industry will disappear while others take a more fighting stance. But in the midst of all this came a positive release as UK retailer TX Maxx opened seven stores here more to follow. The retail group operates in seven countries, including the US, with the T.J. Maxx department store chain.
National Retail Association chief executive, Dominique Lamb, said Australian retailers are a resilient bunch. “History will show, we’ve evolved, adapted, innovated and risen to challenges time and again. The arrival of Amazon will be the catalyst for another round of adaptation to meet the ever-changing consumer needs,” Lamb said.
While acknowledging Amazon has a formidable business model, ruthlessly carving out its territory in the US through cutthroat prices, reliability, and lightning fast turnaround of goods, she accepts there is no doubt its arrival will send shock waves through the sector. “However, like any other business, it will have to make a profit at some point in order to justify its presence here, and I’ve no doubt it will strike many a challenge in a unique environment like ours. We have higher wage costs, higher operating costs, and higher transportation costs. We have far fewer people with a lower proportion of retail spending, and we’re spread out over a far greater expanse.
“Less than 8% of our total retail spend is online and 80% of the online spend is with Australian retailers and online shops. We have far less infrastructure to sustainably support the kind of speed and turnaround Amazon is promising.
“Additionally, Amazon has not committed to opening any physical stores in Australia, and has put a temporary hold on its Amazon Go convenience stores. So with no physical stores, the market of Australian shoppers is rather small for a company of this size,” she said.
Lamb believes there will be just as many challenges for Amazon as there are for Australian retailers, adding that increased competition is not necessarily a bad thing for bricks and mortar or online.
“It is virtually impossible to separate clicks from bricks these days because shoppers want, and expect, both. It’s quite the paradox that the more consumers embrace e-commerce, the more we also embrace those scarcities like individual service, sincere human connection and attention, and the ever-evolving consumer experience. These are the things that simply cannot be automated. “There’s no doubt some retailers will fall, but there will be plenty more who will not only survive, but thrive.”