Retail

Which retailers in Australia are Amazon-proof?

Kevin Moore /

Investment research company Motley Fool in the US published an article in March this year citing reasons why it believed some US retailers were “Amazon proof.” Five US stock market quoted retailers — TJ Maxx, Walmart, The Home Depot, Dollar General and Costco — were the standouts, as they have been able to continue to grow revenue and earnings for shareholders in the face of Amazon’s juggernaut growth.

The common thread was size: the large size of Walmart and TJ Maxx’s annual revenue; the physical size of the products being purchased by Home Depot shoppers; and the small price ticket size of Dollar General. For Costco it was the size of its fee paying members, who pay $60 a year to have the option to shop at Costco.

All of these size considerations protect these incumbent strong retailers from being eaten by Amazon, but what about shopper experience? What about retailers continuing to grow, not just because of their size, but because they offer an experience that Amazon, or any other pure-play online retailer, can’t match?

In Australia we can’t experience the physical retailing of four of these US retailers, although we can shop TJ Maxx as the TK Maxx brand if we live in the right postcode.

We can, however, experience two international and three Australian retailers that I believe will continue to grow not because of the size but because of their shopper experience.

Woolworths

Voice, choice and service with a smile

Woolworths’ current turnaround at store level has been remarkable. The price is now right, choice is wide and the store staff smile and talk to you. The fact that Woolworths is partnering with Google to harness voice shopping via Google Home with major consumer packaged goods is an interesting response to Amazon’s voice and generic “Amazon brand price” proposition.

Aldi

Price, convenience and a pleasant surprise

As a brand, Aldi was born a discounter. Even the name comes from combining the first two letters of the founding and current Albrecht family name with the first two letters of the German word for discount, diskont. Hence Aldi (now you know.) But beyond that, the company entertains like merchants of old by curating stuff and selling it in the middle of the store — stuff that we don’t need, at prices we can’t ignore. That’s why the average shopper’s basket size at Aldi can go from $80 to $180 from one shopping trip to the next.

Nespresso

Quite possibly the only consumer packaged goods brand that has mastered retail service. And has attended a Royal wedding!

I had tried to mystery shop this store for a decade, but wasn’t allowed to buy anything because I wasn’t a member. I loved the layouts and branding consistency and used it as a benchmark when consulting to retailers on brand and store re-launches. However, it wasn’t until I was given a Nespresso machine and had to register to buy my coffee pods that I truly experienced just how good the service is. Think Gucci or Cartier, but with passion.

Bunnings

Big, but good

I tried to get past these last two big old Australian retailers but couldn’t. Bunnings does what it does well. Its store staff care and know stuff, its range is good and it manages to provide a great shopping experience to a wide range of shoppers — from Grandmas buying a single pot plant to a tradie doing a $600,000 renovation.

Kmart

Cheap young and good

Kmart turned the idea that department stores couldn’t be young and successful on its head. The prices are super low and the range relevant to young and old. The store is now a place that attracts new young Australians into retail and the store staff are happy being there. The self-checkout works pretty well too.

We’re still in the early days of Amazon in Australia. This coming Christmas shopping season will mark just how successful the brand will be here. However successful they are though, I believe these five retailers will continue to grow.

NOW READ: How does Amazon Australia really stack up on delivery prices?

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Kevin Moore

Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Now Comms Group. He is also an independent director of Australian fintech company InvestSMART.

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