Australian shoppers are eagerly awaiting the arrival of Amazon after the Seattle-based giant confirmed its intention to establish an Australian retail presence. But consumers’ enthusiasm may not be all about lower prices.
Research from Telstra-backed ecommerce platform Neto said more online shoppers were concerned with convenience than price, and local retailers could still compete with the online goliath.
According to research, nearly one third of online shoppers “plan to move their purchases from current merchants to Amazon”.
The independent survey of 1,000 active online shoppers, conducted a week after Amazon officially announced its plans to launch Australia, also found that 65 per cent of consumers would stay loyal to brands’ own websites if offered a discount.
However, the survey’s other findings suggest that Australian retailers should invest in their cross-channel inventory management, logistics, and other back-end infrastructure to stay competitive – rather than sparking a “race to the bottom” war on price. 82 per cent of customers say they shop online for ease and convenience, compared to just 46 per cent who buy because of sales, promotions, and other price factors.
“Amazon itself doesn’t need local warehousing, inventory, and customer support to sell to Australians. They’re investing in these because they recognise the value of having local back-end infrastructure that can provide fast, flexible fulfilment to customers, further improving a value proposition that’s already proven immensely successful the world over,” said Neto E-Commerce Solutions CEO, Ryan Murtagh.
“Australian retailers should invest in building up back-end capabilities that directly influence what they can offer customers if they want to gain a competitive edge, rather than giving in to price pressures and undermining their future profitability.”
“Efficient and nimble back-end infrastructure always translates into a better customer experience and more sustainable profits.”
Neto says logistics options and inventory visibility stood out as influences on consumer experience, with the survey finding that one in every two Australian online shoppers expect to be able to return products via both physical stores or courier and postal services. 47 per cent of Australians feel retailers should be able to check stock availability across all channels while in-store – with three in every four of these saying it significantly enhances their experience of the brand.
“Brands can no longer expect to stand out by offering ecommerce capabilities: our research found that 52 per cent of consumers now expect every retailer to offer their own online store,” said Murtagh. “The real points of differentiation now come from how effectively they can manage inventory, logistics, and support services like after-care and returns across numerous channels, and the extent to which they can use these services to give consumers the choice and convenience that they’re after.”
“Smart Australian retailers will be avoiding the hyperbole about price-wars and focusing on building out their cross-channel capabilities to support customers wherever they want to shop and receive their products, including Amazon itself,” said Murtagh.