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Amazon arrives in Australia: Channel rocked by retail revolution

Amazon arrives in Australia: Channel rocked by retail revolution

What happens when a technology behemoth lands on Australian shores? The channel has an endless list of questions, but remains short on answers

“Kogan.com is continuing to show exceptionally strong year-on-year growth, and just recently smashed our sales record for a single day on Black Friday (24 November),” he said. “We’re focussed on giving customers the very best online shopping experience in Australia.

“Customers don’t just shop online because of price any more, though it’s still important, they’re time poor and don’t want to spend their weekends at the shops.

“We have been heavily investing in our systems and automation to offer very fast dispatch on all items that are warehoused by us and a user experience that’s second to none for shopping anytime, anywhere, on any device.”

Jackson said the business had more than 900 brands housed on Kogan.com, placed in front of eight million active subscribers.

“We are focussed on making in- demand products and services more affordable and accessible for our customers,” he said. “Customers are more informed than ever, so they know what services and products they want, and how much they should be paying.

“The retailers that do the best with this change are those that give customers what they want. Therefore, we ensure that our range is broad, our shipping is quick and our prices are competitive.

“We also use technology to build a relationship with our huge customer base, ensuring we’re showing the right person, the right product at the right time with our algorithmic recommendation engine now accounts for well over five per cent of our sales.”

Jackson hinted that the business also had a large pipeline of brands lining up to get access to the Kogan platform and customer base, which it will continue to add to in the coming months.

Still life in the traditional retail space

During the past five years, retailers have been ramping up investment into the online space, while boosting in-store customer experience in the process.

It’s not uncommon to see staff from certain manufacturers pacing the shop floor, parting product knowledge onto customers and in turn, helping the retailer close-in on a sale.

Even Harvey Norman itself saw its net profit after tax rise 28 per cent to $448.98 million during the 2017 financial year and the retailer will continue to enhance its omni- channel operating model for its franchisees and customers.

Some of the features that the retail giant has embarked on include Live Chat capabilities, near real-time inventory, a Click and Collect customer app, same day delivery options, and the ability to recommend and connect customers with installation providers.

“The customer-first mind-set has been enhanced by the launch of Harvey Norman Voice this past year, improving engagement of customers of each franchisee to bring them further into the conversation,” the retailer said.

“The omni channel strategy sets the Harvey Norman brand apart from other online and digital competitors as the digital, physical complex and distribution channels are fully integrated, providing customers of franchisees with a multitude of engagement options to meet their needs.”

This year, the retailer launched virtual reality demonstrations with a complete in-store set up, which Harvey Norman claims, has given it a competitive advantage in the market.

“The anticipated demand and future product releases are anticipated to yield sales growth in the virtual reality segment, along with the complementary products that are required to drive the devices like high-end gaming PCs with powerful graphics,” the retailer said.

Adding to this is the retailer’s launch of The Modern PC, which is a new line of notebooks that are thinner, lighter and faster, featuring all day battery, touch screen and modern designs.

“Consumers have seen the significant advancement in notebooks and are upgrading their devices quicker than previously, giving Harvey Norman franchisees strong sales growth within the whole notebook category during 2017,” Harvey Norman said.

Meanwhile, Officeworks head of merchandise, marketing and supply chain, Phil Bishop, said its market position has been built on a strategy of delivering three core pillars to its customers being price, range and of course, service.

The retailer introduced new and expanded product ranges and services in-store. Examples of this in the technology category include products like Google Home; helping develop the coding skills of children with Sphero; or providing customers with access to drones and 3D printing services.

According to Bishop, the retailer’s online sales were on track to approaching 20 per cent of its total sales. Last year, it made 2.3 million deliveries.

Some of the recent initiatives the retailer has embarked on include a free two-hour click and collect service, which Bishop said, receives more than 1,000 click and collect orders on an average daily basis.

This is on top of providing free next-business day delivery on orders of more than $55, and free express same-day metro delivery for orders placed before 11.30am on weekdays.

“Investing in customer experience, knowing your customer and being disciplined in your execution are fundamental to the success of any retailer,” Bishop said.

In the coming months, Bishop said Officeworks will be focusing on the Christmas and ‘back to school’ trading periods, which are both important times for the retailer.

“Our technology category plays a key role in both periods,” he added. “We know choosing the right device for a child’s school needs can be confusing, so we also offer a tech selector on our website which helps parents get their kids the right device, that meets the minimum requirements by schools to get ‘Tech Ready’ for school.”

Staying ahead of the game

Finding, managing and retaining talented employees is one of the single biggest challenges faced by business owners, workforce management provider, Deputy CEO, Ashik Ahmed, said.

“A team of high performing and reliable employees that excel in customer service can be the best asset a retail business can acquire,” Ahmed said. “Customer service will become the key differentiator in retail.

“Through ensuring that employees are comprehensively trained in their designated roles and rostered on in the right volume at the right times, the increased efficiency together with the added customer service benefits will ensure that retail stores will continue to remain competitive in a changing environment.

“While Amazon can offer a sometimes more convenient and perhaps cheaper alternative to traditional retail, there’s no replacement for excellent customer service and customer experience that comes from an in-store experience.

“Traditional and online retailers in Australia have already come up against the likes of international players like eBay, and a number of other giant online retailers that have posed a threat to their business — and Amazon will be no different.”

Ahmed said the retail industry has always been the embodiment of one thing: rapid change.

“Technology has always been a key driver of change in the retail space, and the introduction of Amazon to the marketplace is no exception,” he said.

“When online shopping was first introduced, it greatly changed the way that traditional retail businesses needed to position themselves in the market, and those that adapted were able to grow quickly and flourish. Those that didn’t struggled and many disappeared.”


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