What should sellers be aware of?
Amazon will potentially take a big bite of the retail market in Australia – a AU$12 billion big bite, based on an estimation some retailers are starting to get concerned about the market change. One way in which Amazon will probably take a percentage of e-commerce businesses is by dominating search results. But in fact retailers shouldn’t be concerned as the old adage says: If you can’t beat it, you better join it. Amazon Australia can also be a lucrative marketplace for all retailers especially smaller ones because of the nationwide access to millions of potential customers.
Retailers be aware : customer product search behaviour of customers has shifted in the past few years and Google isn’t necessarily the first stop anymore when it comes to product searches. In fact, Amazon has beaten Google in the race of product searches in US and a familiar development will probably be seen in the Australian market. Over the years Google has been the first stop in almost every search. But when it comes to product searches, Amazon established itself as the Number 1 entry point for product searches. (According to a UPS survey among more than 5,000 US online shoppers)
But how will Australian online shoppers react to the Amazon launch? Nielsen research came to the conclusion that 56% of Australians will definitely buy from Amazon as it promises to expand choices and put downward pressure on prices.
So where is the opportunity for sellers?
Some retailers are waiting to see how the others fare. Some aren’t even considering adding Amazon to their multichannel marketing strategy.
US retailers who didn’t want to jump on the Jeff train and accepted the ceding market share to Amazon were forced to reduce their prices – some to an uneconomic and unsustainable level. This is of course a hard liner in a market where Amazon dominates 43% of the e-commerce market. In contrast to down under, the price levels will be influenced by the number of the first movers. Sellers have here the unique opportunity to follow the get-go strategy and position their products to a reasonable price.
Another advantage of the Amazon Australia launch is the fact that no e-commerce business has a sales history yet. This is an important Amazon evaluation tool and plays a big role at Amazon in terms of winning the Buy Box. Your competitors haven’t established a sales history at Amazon but you can start right now and create a valuable sales history with a long term benefit.
The conclusion is simple and straight forwarded – Retailers should use this big first mover opportunity, prepare themselves and definitely jump on the Jeff train to achieve more in their multichannel marketing strategy.