Why Aussie Retailers Should Be Petrified about The Arrival of Amazon

Ljhmtaylor on 16/06/2017 - 18:04

When it comes to retail shopping vs shopping online I am prepared to cut Australian retailers a little slack and support them when they do a reasonable job. Because they have to pay too much for rent, they employ local staff, they have to pay for a heavy bureaucratic burden. Your local retailer is an essential element in building and supporting the local community.

However, putting aside the price advantage online retailers have, far too many do not earn my loyalty.
Too many;

  • Have stock levels (range, colour,size) which is too limited.
  • Have a rubber time mentality when it comes to deliveries
  • Do not properly train staff
  • Have a (3 envelope) mentality when the problem is that they do an awful job.

Using a very simple example. I recently decided to buy a Golf GPS from a well-known chain. Online it was $210 with free delivery within 2 working days. In-store, can supply same price, (don't stock) can order in 5 to 10 days and I need to drive 30 kms to pick it up. Brr….h. 10 days delivery within Oz is pathetic. Amazon can deliver from east coast USA within 3 days including customs clearance.

Retailers of products typically over $100, that are very good at their job have little to fear from Amazon. The others should cut their losses now or get their act into gear.

I know it is a side issue, but GST on minor internet purchases has a minor influence on consumer buying decisions. THE PROBLEM IS PITIFUL RETAILER PERFORMANCE.

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Comments

  • Nutrino on 16/06/2017 - 18:23
    +8

    Nice informercial.

    • ronnknee on 17/06/2017 - 10:43

      Why Aussie Retailers Should Be Petrified about The Arrival of Amazon
      Here's a study with a sample size of 1 ie. a recount of my onetime bad shopping experience.

    • jhmtaylor on 17/06/2017 - 10:47

      I am not trying to flog anything.
      The point I was trying to make is that if retailers did a better job at retailing, they would have little to fear from the big A. If price was the only thing that mattered we would all be eating in the cheapest restaurant in town.

  • spackbace on 16/06/2017 - 19:25
    -1

    K.

  • jutsu on 16/06/2017 - 19:50

    Well, with the arrival of Amazon, the multinational corporation will be an Australian reseller, pay a huge rent, pay taxes (maybe not every taxes because their expenses will be very high) and employ local workers (near their warehouses). Amazon will also need to invest more than retail stores.

    The one who shall fear Amazon are other online stores or retail stores who also sell online. We may buy more things online but we still need physical retail stores.

    • [Deactivated] on 16/06/2017 - 20:08

      yes we need the physical stores to check out the products before we shop for them online for a lot cheaper.

      • lolmao on 16/06/2017 - 20:25
        +2

        this is what shoe shops are for

      • whooah1979 on 17/06/2017 - 00:29

        what items can amazon sell that is cheaper than ozbargain deals?

    • MasterNoob on 24/10/2017 - 00:58

      so one area benefits with all the new jobs and the rest of the Australian communities just die out?

      okay mate

  • big1964 on 16/06/2017 - 21:33

    The problem I find buying online is delivery if I am not home depending on the courier company (and what I am buying) I have to pick it up (at the post office) or organise for redelivery, One time I was home and the driver didn't even knock on the door just stuck the calling card in the letterbox waited all day for them to come!!!
    Depending on what it is I will go to a shop and buy it especially if the price difference is not that much!!!!

    • Master Bates on 16/06/2017 - 23:08

      One time I was home and the driver didn't even knock on the door just stuck the calling card in the letterbox waited all day for them to come!!!

      This happens to us every other delivery.

    • Diji1 on 16/06/2017 - 23:09

      All my Amazon parcels are authority to leave. Not sure if this varies depending on your area or record for parcels going missing and so on.

      driver didn't even knock on the door just stuck the calling card in the letterbox waited all day for them to come!!!

      I've watched a courier guy park in the street, walk halfway up the drive and stop for 10 seconds or something, turned around and drove off. I rang the courier business and he came back. He said he did it because it looked like no one was home. Why he didn't knock or ring the bell is beyond me.

  • JCrown9 on 17/06/2017 - 00:17

    And now tonight Amazon announces their buying Whole foods in the US.
    nice entry into the supermarket chains… stock prices of all their competitors are getting smashed including walmart, costco & target.

    Could be a small heads up signal of whats to come when they enter any new market anywhere in the world.

    • whooah1979 on 17/06/2017 - 00:28

      Colesworth and Aldi has already cornered that market. It would take amazon ten years and hundreds of millions of dollars to start from scratch in Australia.

      • johninmelb on 17/06/2017 - 12:27

        Might cost hundreds of millions, but doubt it will take 10 years. All they need to do is buy Metcash, dump all the peripheral stuff like wholesale, hardware etc, and just revamp IGA.

        The way Coles and Woolworths are going, one of them could end up going broke, or having a near death experience, and that presents an opportunity, not only to Amazon of course, but to some of the better grocery retailers from round the world.

        • whooah1979 on 17/06/2017 - 15:23

          Is amazon a raider and would the federal government allow them to raid metcash?

        • johninmelb on 17/06/2017 - 17:08

          If Bezos donates enough to the Liberal re-election campaign, then he will have no opposition to takeover whoever he likes.

          Money talks, just look at the Chinese.

        • whooah1979 on 17/06/2017 - 19:10

          @johninmelb:

          Money talks, just look at the Chinese.

          Hmm, money doesn't always talk. Mr s Morrison has been known to block high profile sales to foreign investors. S Kidman, Ausgrid and soon to be bhp billiton.

  • whooah1979 on 17/06/2017 - 00:23

    Amazon will at best get a small share of the online market in Australia. They will at worst pack up after about five years.

  • [Deactivated] on 17/06/2017 - 00:39

    retail must be near rock bottom now, how can all these energy and insurance companies keep rising their prices. They expect the big fat profits of the 80's to keep rolling in year after year at mine and everyone else's expense but there's no alternative you can't even register your car with a green slip.

    • jhmtaylor on 17/06/2017 - 11:55
      +1

      I have been doing a lot of financial analysis of retailers recently with a view to personally investing in some, that have been over sold. Energy prices have risen but as a proportion of expenses it is not a significant item. Insurance is also a minor item and contrary to perceptions, cost has fallen slightly.
      The 3 big cost items for retailers in descending order are labour, rent and cost of goods. The cost of rent in particular is ridiculous, nearly twice what similar premises would cost in North America and Northern East Europe.

      • [Deactivated] on 23/10/2017 - 19:22

        Compare apples with apples not $$.

        Compare how much time the average worker in US spends on the same item.

        Example: price on X thing for average worker.
        - in USA, worker spends 5 minutes to afford that
        - in AUS, worker spends 4 minutes to afford that

        == Take into consideration that almost %15 of USA population leaves below poverty line and the average income is lifted by the 1%.

        That's how you compare prices in varies countries not vice versa. For example, in most of Eastern Europe, houses are really expensive at $80 - $100k, with the average worker can't afford to pay it 50 years. Seems cheap, it's not.

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