After months of wild speculation and audience anticipation, Amazon.com.au finally opened its local online store here on December 5 last year. The move put an end to the enormously high shipping fees Australians had to pay for Amazon’s international stores – but are Australians ultimately underwhelmed by Amazon’s arrival on our shores?
There was no big budget launch party, blanket TV advertising, media tours or any fanfare. The site simply went live in the early hours and that was it.
The response from the Australian public, so far, has been a little disappointing. The prices aren’t as cheap as most Australians were led to believe, and lots of popular products were not available initially.
The other bone of contention is that its premium service, Amazon Prime is yet to launch here, and currently deliveries are handled by Australia Post.
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Many are eagerly awaiting Prime as there are huge benefits to be had, including discounts, free shipping and most importantly: same day deliveries.
If Amazon Australia had launched Prime on day one, there would have at least been a huge point of difference for consumers to identify with. Prime fans will have to be patient though, as the service is rumoured to be available from July.
Amazon Australia is constantly adding more products and is reviewing a lot of its pricing as time goes on, but the simple fact is that the Australian launch actually broke Amazon’s global launch-day records, with the highest first day order volumes ever achieved.
What you might not realise is that Amazon’s launch was intentionally low-key, so it could test its systems and logistics before rapidly rolling out more products and services and more competitive pricing over the next year or two.
Its launch strategy will be similar here to that of other countries, and that is to achieve slow and steady growth and to earn the trust of Australian consumers gradually.
According to SEMrush, the organic traffic to the Australian Amazon site increased by 90 percent from November to December 2017.
The interest in “Amazon Australia” by search volume increased four times from November and December in comparison with October. After that, the public interest stabilised, which is demonstrated by both traffic and search volume (see graph below).
Changes in search volume for “Amazon Australia” from Australia
Some of Amazon’s local competitors include traditional bricks and mortar retailers like David Jones, Myer and Harvey Norman, which are all pretty far behind their international peers in terms of their online retail presence and popularity. The traffic to these retailers’ sites from February to March has not changed significantly, excluding David Jones that saw an increase of more than 20% for organic traffic.
Amazon also competes with Officeworks and JB HiFi, both of whom have invested heavily in retail technology in preparation for Amazon’s arrival and have been praised for their advanced omni-channel retail offerings and same day deliveries. The traffic increase to these retailers’ sites from February to March was 6% and 16% respectively.
As for the future, Amazon Fresh (sometimes called Amazon Go), a grocery store that will compete head on with Coles and Woolworths will also launch in Australia at some point.
This will put further pressure on our supermarket duopoly, which has been squeezed by Aldi and Costco in recent years. It doesn’t have checkouts or queues and uses futuristic technologies like computer vision and deep learning to detect when customers pick products from the shelves and then it keeps track of purchases in your virtual shopping cart.
We will have to wait and see if the tortoise versus the hare approach will pay dividends for Amazon in Australia over time, but with its proven track record globally, I don’t really see how it can fail to deliver.
Olga Andrienko is head of global marketing at SEMrush.