Amazon Prime launched in Australia without next-day delivery: Will consumers want to use it?

Amazon

Global retail behemoth Amazon has launched its coveted Prime delivery and entertainment service in Australia, but local shoppers will be at a disadvantage when compared to the Amazon Prime offering in rest of the world.

Live from today, Australians can pay $6.99 a month or $59 a year (though a $4.99 a month introductory offer will run until next year) for the membership service.

For that price, consumers will get free two business day delivery on all their Amazon orders across the year, along with video streaming service Prime Video, ebook service Prime Reading, and live video game streaming service Twitch Prime.

However, this is at odds with the same or next day delivery on offer in other parts of the world, with shoppers in some major US cities being able to get deliveries within two hours. The subscription price reflects this, just $59 in Australia compared to $US119 ($160) in the US, but experts believe the service doesn’t do enough to differentiate itself, and that consumers likely won’t get on board.

Speaking to SmartCompany, retail expert and academic at Queensland University of Technology’s School of Business Gary Mortimer says Amazon’s Prime play, less than eight months after the retailer’s national launch, is a gambit to get more customers using Amazon locally.

“This is very much about Amazon trying to capture a broad customer base as quickly as possible. They understand they left their run at the Australian market too late, and many Australian consumers already have developed relationships with other multichannel retailers,” Mortimer says.

Mortimer says the Prime offer is great value if you’re a regular Amazon shopper given the free delivery on all purchases over the year, but if you only shop once every few months, it’s probably better to front the $9.99 next-day delivery.

The two-day expedited delivery is available to 90% of Australians, Amazon says, with shoppers in Adelaide, Brisbane, Canberra, Hobart, Melbourne, Perth and Sydney, Albury-Wodonga, Bendigo, Gold Coast, Gosford, Newcastle, Shepparton–Mooroopna, Toowoomba, and Wagga Wagga being able to take advantage of the quick shipping.

However, shoppers in more regional or remote locations will have to wait four to five days for their parcels.

“We are thrilled to bring Prime, our premium membership program and its many benefits, to Australia, little more than six months after the launch of our Marketplace and Retail offering,” Rocco Braeuniger, country manager of Amazon Australia said in a statement.

“We have been working hard to expand selection, ensure customers get great value, and improve the Amazon shopping experience for Australians. With the addition of Prime, customers can now enjoy the most convenient way to shop and take advantage of new and expanding benefits from Amazon.”

Could Amazon buy Coles?

Mortimer reflects that Amazon is facing similar problems in Australia as it did when it launched in Canada, suffering from long geographic distances and small populations.

With current retailers such as JB Hi-Fi and David Jones, along with supermarkets Woolworths and Coles, trialling same or next-day delivery, Mortimer warns that Amazon’s two-day delivery option “isn’t going to disrupt the market”.

He does acknowledge the difficulty of speedy deliveries in a landscape such as Australia’s, however, and questions if Amazon could replicate its purchase of Whole Foods in Australia as a way to up its exposure and facilitate more deliveries.

“One of the reasons why Amazon bought Whole Foods in the US was to reformulate these Whole Foods supermarkets into mini fulfilment centres. That’s why Coles and Woolies can do it, they’ve got nearly 2,000 supermarkets across Australia,” he says.

“With Coles for sale, Amazon could look at purchasing it to do a similar thing to Whole Foods.”

NOW READ: Naomi Simson on Amazon: The retail jungle for David and Goliath

COMMENTS

Subscribe
Notify of
guest
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Jarrah3
Jarrah3
3 years ago

You missed a biggie about Prime though. It’s the FREE INTERNATIONAL delivery from eligible overseas vendors when you purchase their products via the Amazon AU web site that gets my interest. If Amazon AU quickly expands the amount of international goods we have on offer via the AU web site AND makes sure that any ‘eligible retailers’ aren’t charging prices we just aren’t prepared to pay, then it’s a winner for me. If the price is cheaper by far overseas then tacking on the 10% GST won’t be a big deal if we don’t also have to pay for shipping on top of that.