After much speculation, Amazon has confirmed it is in the process of launching its retail offering in Australia.
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Here’s the short statement provided by Amazon’s local PR reps:
“Amazon Web Services launched an Australian region in 2012, we launched a Kindle Store on Amazon.com.au in 2013, and we now have almost 1,000 employees in the country. The next step is to bring a retail offering to Australia, and we are making those plans now.
We are excited to bring thousands of new jobs to Australia, millions of dollars in additional investment, and to empower small Australian businesses through Amazon Marketplace.
We are optimistic that by focusing on the things we believe customers value most – low prices, vast selection, and fast delivery – over time we’ll earn the business of Australian customers.”
While Australians can already shop online with Amazon.com.au, this announcement indicates the Seattle-based giant will be increasing its local footprint by opening warehouses and fulfillment centres in Australia. Details are scarce, however having boots on the ground means Amazon will be able to set the pace for the retail sector when it comes to speed of delivery and convenience.
And Amazon doesn’t care about what it costs to deliver on its shipping promises — it’s happy to forgo profits for growth. The boss of Amazon’s ultra-fast shipping service Prime Now (which ensures free two-hour delivery or one-hour delivery for US$7.99) said recently she’s more worried about making customers happy than shipping costs.
“When I think about the time that I spend as the leader of this business, I don’t spend most of my time thinking about delivery costs — or costs at all,” Stephenie Landry, Head of Amazon Prime Now, said during a presentation at Shoptalk in Las Vegas last month.
“Costs are important but I really think about customer love. How does my team make a product that customers really, really love and they are passionate about? I will take a cost problem over a customer love problem any day. You can do costs a bunch of different ways but if you don’t have a product that customers love and respond to that’s really problematic. So I really spend my time obsessing about great product.”
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Landry argued customers’ expectations around speed are only going to rise, as the demand faster and faster delivery.
“Two-hour delivery sounds fast now, but I can imagine a future where customers are getting ever-more demanding. I can imagine a future where it doesn’t seem all that fast,” she said.
The Good News for Small Business
While Amazon is likely to cause headaches for the large incumbent retailers who lag in the digital space, it may be good news for smaller brands.
Amazon is currently calling for sellers for its soon-to-open Australian Marketplace. Similar to eBay, the marketplace allows third party vendors to sell to Amazon shoppers and make use of Amazon’s fulfillment offering (known as Fulfillment by Amazon). Australian businesses are already using the Amazon marketplace to reach global buyers, and opening an Australian marketplace could benefit smaller retailers by providing them a global audience.