Amazon Australia’s arrival is the moment we’ve all been waiting for. Or have we been dreading it? Maybe both?
After all, we’ve spent the better part of the last decade hearing about Americans ordering something random and having it delivered nearly immediately.
And while we’ve heard about the problems it’s created for businesses, it also sounds like an opportunity for e-commerce companies and consumers alike.
Still, the imminent arrival of Amazon Australia begs the question: How will your business survive?
Amazon Australia: Yes, Aussies Will Love It
If you’re wondering whether your customers will really be the type that turns to “One-Click Order” on Amazon, then the answer is probably yes.
Gizmodo Australia recently reported on an independent survey of 1,001 Australian adults who use online shopping services, and their reaction to Amazon. The takeaway? A whopping 90% of shoppers said they’d use it.
While more shoppers said they preferred to look at specialist sites, a significant amount did report finding online marketplaces, like Amazon, useful.
Plus, Amazon has the whole fast delivery, low prices, and stupendous selection thing going for them.
So, if you’ve been in denial until now, it’s time to wake up and smell the free 2-day shipping offers, because they’re coming and people will use it.
How Can E-Commerce Cope?
Retailers in the U.S., UK, and Europe have already had to deal with the pressure placed on them by Amazon.
Some have been turned upside down by Amazon, but others have continued to stay the course and even stare the beast directly in the eye.
So, Australian businesses are at an advantage. You don’t need to go in blind. More importantly, there is a path (even if it is rough around the edges) to staying afloat once Amazon arrives.
You Can Compete with Amazon Australia
You may not beat or destroy the behemoth, but you don’t need to be steamrolled by it, either.
Let’s break down what you should and more importantly what you shouldn’t do to deal with the arrival of Amazon.
Recognise Your Limits
Before you re-tool, there are some realisations you’ll need to face.
First, you won’t have Amazon’s SEO budget, so you’ll need to be creative and likely work harder to make the most of every advertising dollar.
Second, you’ll never beat the size of their inventory. At this point in the game, no one but Amazon could beat their inventory. So, don’t get hung up on offering more and becoming a marketplace because they’ve already won.
Focus on Merchandising
Shopping on Amazon Australia will essentially be like shopping in a warehouse. Generally, you’ll need to know exactly what you want to find what you need.
That’s a weakness of offering everything for sale.
Now, Amazon makes suggestions. Because you searched for “x,” they will show you “y.” If you’ve bought three printers, they’ll send you emails about toner and paper.
There’s no real way to browse Amazon in a meaningful or beautiful way.
E-commerce has an opportunity to direct customers’ path around the site, just as stores do, and show them the best they have to offer and inspire purchases.
This is one thing Amazon simply cannot do. It’s functional and practical, but it’s anything but beautiful.
Develop Your Own Product Lines
If you’re selling the same things sold on Amazon, you’re in direct competition with their prices and shipping.
It’s why American giants like Walmart and Macy’s have struggled to keep up.
However, brands running their own product lines, like Lululemon which has grown from the U.S. to become an international brand, have done well. Why? Because Lululemon products are known in their own right, and Amazon doesn’t sell them.
Does Amazon sell sports gear? Yes. Do they sell Lululemon? No.
So, if you’ve been toying with the idea of creating your own line to match your brand, there has never been a better time.
Focus on Overall Quality – Not Price
Amazon shoppers love the low prices. But not all decisions are made on price alone.
According to Amazon’s own data, 23.1% of shoppers make their decisions on price. Another 19.8% make the decision based on convenience of shipping.
- 27.1% decide based on convincing product descriptions and photos
- 7.1% worry about the number of reviews
- 12.5% buy based on the quality of reviews
What does this mean for existing e-commerce businesses?
It means there’s no overwhelming evidence that a race to the bottom in terms of price is necessary.
You can compete with a quality experience, quality products, and even quality shipping.
You don’t have to send a product to the customer’s door next day with a drone (don’t worry, it’s not legal – yet). But providing an exceptional shipping experience will go a long way.
Seek out Amazon’s Weaknesses
Even monsters have a soft underbelly. Not convinced? Take the UK market as an example.
In the UK, online retail makes up between 10% and 15% of the market. Amazon is only a fraction of that. Sainsbury’s, a grocery store with a range of homewares, clothing, and a few hardline products, had revenue four times higher than Amazon’s in 2015.
Why? Because you can’t buy food in a reasonable manner on Amazon UK.
Amazon Australia will have weak spots, and many of those weak spots will be in traditionally softline retail spaces (like clothing and shoes). But, there may also be other spaces where Amazon simply isn’t up to the task.
Your mission, should you choose to accept it, is to find those areas. Then, you can not only exploit them but you can do it in a way that Amazon simply can’t compete with – through quality and personalised service.
Are You Ready for Amazon Australia?
Ready or not, the Amazon Australia expansion is coming. While the market will have to adapt and change, it is possible to not only compete but to thrive.
By focusing on differentiation rather than beating them at their own game, e-commerce businesses can continue to play an important role in the Australian market.
But you don’t necessarily need to find ways to beat Amazon. You can join them by adding Amazon as an integral part of your multi-channel e-commerce strategy. In fact, using these tips when selling on Amazon is a great way to boost your business and make the most of a sales opportunity that has made other e-commerce businesses millions.
Are you ready for Amazon Australia?
Talk to us about marketplace listing and optimisation, omnichannel e-commerce strategies, and international SEO to make sure your brand is ready and able to grow in the years ahead.