Amazon news has dominated the retail space in 2016 and analysts and retail experts are predicting the online retail giant is getting closer to launching into Australia thanks to a fresh round of trademark applications made by Amazon over the past few months.
Fairfax Media reports today that Amazon has now lodged over 250 trademark applications in Australia, including for the Amazon Echo smart speaker and Amazon Dash, the product ordering service where customers can buy products with the click of a button.
These applications have sparked fresh speculation that local retailers will soon be grappling with the realities of the Amazon and its direct to customer model. In recent months Woolworths executives have discussed establishing formal taskforces to deal with the incoming threat, while others, like Metcash, have alluded to being open to a partnership with the US retailer.
Meanwhile, digital centric retailers like Kogan.com have expressed excitement at the idea of Amazon landing on our shores, believing it will put a fire under Australia’s online retail space. But recent research from Roy Morgan on the country’s grocery habits suggests that on the fresh food side of things, local customers still prefer shopping in store to ordering their food online.
In the year to June 2016, a survey of more than 12,000 shoppers found that less than 3% had shopped for groceries online in the previous four weeks. In June 2015, only a quarter of respondents believed they would look at food shopping online in the next 12 months.
Roy Morgan says the sector is one to watch, with the likes of Aussie Farmers Direct launching an online offering earlier this year. There’s also no shortage of meal delivery services popping up in Australia, and some of these businesses believe they have what it takes to build local partnerships to keep shoppers happy in years to come.
Despite the lack of take-up of digital supermarket orders so far, the spectre of Amazon Fresh’s arrival in Australia remains. In June, reports emerged that the delivery service was preparing to launch, but the company has not made an official commitment.
While there’s no official news on a launch, customers are now able to imagine what a technology-centric fresh food retailer would look like, with the Amazon Go concept unveiled this week. The artificial intelligence supermarket model uses computer learning and vision sensors so that shoppers can enter a store with their Amazon app, pick up when they need and leave without needing to interact with a point of sales machine or any staff members. A pilot store has been launched in Amazon’s home city of Seattle.
Is data the difference?
The Retail Doctor Group’s Brian Walker told SmartCompany there is no question Australia’s online retail environment is still in its infant stage, compared to other markets, but reports around Amazon’s imminent arrival tend to focus on its delivery system while often ignoring one key part of the company’s model – its use of data.
While the business is known for its streamlined delivery processes, the ability of the brand to know what the shopper wants is where Amazon might really beat the local supermarkets, Walker says.
“The interesting thing is that one of the biggest influences this business has had is in the predicting of consumer behaviour,” says Walker.
“Imagine you’re at home on your Amazon Prime account – meanwhile, all this data is being collected,” he says.
While the big supermarkets have been able to generate customer profiles largely off the back of loyalty programs and sales numbers, they are still at the start of that journey.
“I think they are still in the very, very early stages of that,” Walker says.
Retail Oasis strategist Pippa Kulmar told SmartCompany last month that in the face of these predictive skills, local retailers need to cement their value as efficient alternatives now.
“Amazon’s mantra is all about being the most consumer centric company,” she said.
“So you have to actually bed that down as part of the culture. Who is your consumer, how are they influenced – think that through all the time, but do it now.”
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