What do Amazon Fresh have planned for Australia?
By Nathan Males, Myfoodlink CEO
Amazon Fresh is expected to launch in Australia sometime during 2017. Needless to say, the arrival of the online retailing giant to the domestic market will have a far-reaching impact for local retailers.
What is Amazon Fresh, you ask?
Amazon Fresh is Amazon's online supermarket offering, which is currently available in the USA and UK. In the US Amazon is a major online player (some would even say 'the' major player) and offers everything from books and electronics to bread and detergent. It's a one stop online shopping option, and it offers grocery options for buyers with same day delivery to their home.
What does this mean for Australian retailers?
Amazon is already kind of available to Australian online shoppers to a degree, but the offering is set to expand in a serious way if they enter into the Australian market on a domestic level.
This could be a big disrupter across the board for online retail in Australia, but particularly in online grocery retail, which is an area that is still very much in its growth stage here.
There have been a few good pieces on the possibly of Amazon Fresh coming to Australia over the past few weeks. Of these we recommend :
After taking a look at these it will become quite clear that at this stage nothing has been confirmed. But that doesn't mean it's not happening, so we wanted to take the opportunity to say: don't let the arrival of Amazon scare you off online retail! Local retailers have a host of advantages at their disposal which Amazon can't replicate, simply based on company structure and size, and which can be used to secure a profitable online channel for your business.
Let's give you some examples of how you're ahead of Amazon:
- Firstly, Amazon charges a subscription fee for Amazon Prime. It's an established element of the pricing structure and it's yearly. It's not clear what this fee will be when the business expands to Australia, but around $100 per year could be reasonably expected. This is not a 'normal' element of Australian retail so you can expect it to ruffle a few feathers; showing your customers value for money without a subscription fee is a great way to get them on your side and show real value for money online.
- Having a physical local store location that your customers can visit is a big advantage for online retail. It means you can offer your customers shopping under a click and collect model, which is a key element in online convenience for shoppers. It is widely considered that a mix of delivery and click and collect offers the widest convenience for online shoppers. It also means that shoppers can supplement their online orders with in store purchases when picking up.
In fact having a bricks and mortar location is so advantageous that rumour has it Amazon are now planning to build small retail stores for fresh items to build into its overall Fresh model. You can read about it here.
- If you're already online you have the opportunity to establish a core market ahead of Amazons arrival. You can build up a group of regular online customers and actively market to them to drive repeat sales and increase brand loyalty. Customer service is key here; your customers know your business for the service they experience in store with you. Replicate this online and you'll have a winning shopping offer for a new customer base to join your business. This core online customer group will be much harder to develop as time goes on so get started now - we've said it before, but there really is no time like now to take your business online!
- Australian shoppers are increasingly moving away from big retailers and toward local stores, but price and convenience are always going to be key factors driving sales. Actively communicate with your customers about the value and convenience your online service offers and they will respond.
These are our thoughts on how local retailers have the advantage online when it comes to Amazon Fresh joining the Australian market, but I'd love to hear your thoughts too! Send me an email to email@example.com with your feedback.