Home Strategy Most Australian retailers plan online Amazon sales in 2018: claim

Most Australian retailers plan online Amazon sales in 2018: claim

A survey of retailers released on the day online giant Amazon made its Australian debut claims that 95% of Australian online retailers plan to sell using the company's Australian platform in the next 12 months.

Retail and wholesale management platform provider Neto said that within that percentage, 18% were forecasting that three-quarters of their sales in 2018 would come from Amazon and other online marketplaces.

After months of speculation, Amazon finally announced on Tuesday that it would begin trading in Australia.

The Neto survey covered 200 retailers and was done in the three days prior to Amazon's launch; it queried retailers as to whether they intended to sell on Amazon or other online marketplaces this year.

A statement from Neto said the results indicated that online marketplaces had become a key factor in Australian retailers’ growth plans, with 39% of retailers saying they would sell in as many marketplaces as possible in 2018.

The reason most commonly cited was the reach and popularity of marketplaces to "put them in front of more potential customers".

The survey found that retailers were also optimistic about how much sales would come through online marketplaces. While 18% predicted more than 75% of sales would come from Amazon and other online marketplaces next year, 50% still predicted between 5% and 25% would come from Amazon and other marketplaces over the next 12 months.

“I’ve been consistent in my view that Amazon and online marketplaces are a strategic opportunity for retailers,” said Neto founder and chief executive Ryan Murtagh.

“The marketing machine that is Amazon and the quality of customer experience that Australian online shoppers will now demand and expect, is a great outcome for every retailer selling online. There is a huge amount of growth coming for Australian eCommerce and every retailer savvy enough to embrace the power of online and marketplaces such as Amazon will get a share of that growth.”

Commenting on Amazon's launch, Forrester analyst Zhi Ying Ng said incumbent Australian retailers would now face stiff competition, and be forced to offer customers more variety at competitive prices, and potentially same-day delivery at no cost.

"(They) will also be under immense pressure to accelerate existing digital initiatives, especially around smarter use of data and analytics in order to personalise products, services and experiences to customers," Ng said. "Most will start by improving their website's user experience to make it easier to navigate, and move on to improve supply chain and delivery capabilities."

But, she added, it would not be all clear skies ahead for Amazon. "(It) still faces a number of challenges, including logistical challenges. Australia is a vast country and its population is spread over a large area.

"To reach Australian consumers who live outside the metro area in the country without having to pass on extra delivery costs and without delivery delay will be Amazon's challenge. Local players with strong and established delivery networks and capabilities could potentially blunt the disruption that Amazon may cause."

Ng said Australia had not seen many digital disruptors in its retail market, and as a result the retail sector was now ripe for disruption.

James Chin Moody, the co-founder and chief executive of parcel courier service Sendle, said: "We cannot ignore that this is a new era for online retail in Australia. Amazon brings both opportunities and threats for Australian small business.

"On one hand, more people than ever will be shopping online. On the other, small business will need to come to terms with the challenge of making shipping simple, reliable and affordable. Sendle’s role is to help small business thrive and we stand ready to be the champion of small business logistics in Australia."

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.