As you may have heard, the online shopping gorilla Amazon will be arriving in Australia soon (perhaps as early as February 2018, according to some sources).
After much speculation on its first Australian site, online retail giant Amazon appears to have settled on Melbourne, reportedly leasing its first distribution centre in the outer southeastern suburbs.
The Australian Financial Review reported that Amazon has agreed to lease the 24,387sq m former Bunnings distribution centre from Pellicano Group, one of Melbourne’s largest privately owned construction, development and investment businesses.
The site in Dandenong South is described as “the best distribution centre available in Melbourne’s South Eastern suburbs”.
The building sits on 7.7ha and became empty when Bunnings moved to a new warehouse.
At the moment, the Amazon.com.au website is minimalist, essentially offering Kindle ebooks, audio files, photos & mobile apps — i.e. just digital files and not much else.
However once the Amazon Australian warehousing and distribution facilities are operational, the shopping giant intends to offer its full range:
Amazon confirmed in 2017 that it would be launching its full offering in Australia – including Amazon MarketPlace, Amazon Prime Now and eventually Amazon Pantry and Amazon Fresh.
The online giant, founded by Jeff Bezos in 1994, has promised cheaper prices, faster delivery times and access to a greater range of products.
Amazon’s arrival is a big, big deal — not just for Australian retailers but for Kiwi businesses as well.
In March 2016, Richard Goyder, managing director of Wesfarmers – which owns the likes of Bunnings, Kmart and Coles among others – grimly predicted Amazon’s arrival in Australia would “eat all our [retailers’] breakfasts, lunches and dinners”.
Kiwi commentators have also warned Amazon’s arrival will affect the country’s retail sales.
What’s the big deal? Why should Kiwi retailers and online sellers be concerned?
Because more than half of New Zealanders are already comfortable buying products online. Here’s why people shop online, according to a FoamyMedia graphic:
Amazon USA already ticks most of those boxes for Kiwi consumers. The only downside is the cost of shipping products from the US to New Zealand, which for some products can outweigh the fiscal benefits of lower purchase prices.
Once Amazon is set up in Australia, however, it should be much cheaper to ship products from there to New Zealand — and it’s entirely possible that Amazon will offer its Prime membership package (free shipping on every Amazon-warehoused product for $99 a year) to New Zealanders as well as Australians.
American consumers already know the score, and visit Amazon in ever-increasing numbers. 33.8% of retail website visits during November and December 2016 were on Amazon, according to Internet Retailer. Expect similar numbers down our way once the mega-shopping-destination sets up shop in Australia.
How Can Kiwi Businesses Compete With Amazon?
We answer this question in detail in the latest version of our Mastering eCommerce course, and in our new Social Media Marketing for Retailers and Online Sellers course, but here are some suggestions:
1 Don’t Beat Them, Join Them
Amazon will actually sell your products for you, if you list them on Amazon, and will even handle the fulfilment if you sign up for their FBA (Fulfilment by Amazon) program. Refer to our courses for details.
(NB You will need to have representation rights for your products in Australia as well as New Zealand, which may cause a problem for some).
2 Go Niche & Market Your Content
As Kissmetrics notes:
Amazon’s weakness is in its greatness. It has everything for sale. Amazon can’t be good at everything.
You? You don’t sell everything. You just sell a few things. (At least you should.)
You will have a much harder time trying to rank for a lot of different keywords, even if they are all sort of in the same niche. Whatever you sell, Amazon probably has a few more variations, sizes, colours, and features.
It’s extremely important to narrow your ecommerce niche and dominate it.
How do you dominate it? Through content marketing, of course.
Amazon.com doesn’t do content marketing. They buy PPC, they do conversion optimization, they do SEO, they release products, they claim more verticals, and they do a lot of other things.
But they don’t do content marketing very well at all. They don’t even do email marketing that great!
This leaves you with a huge opportunity to go into your niche, content market the heck out of it, and start to rank for all kinds of awesome keywords.
3 Focus on Speed & Convenience
Melbourne is close, but it’s not next door. Goods still take time to cross the ditch. If you’re a New Zealand retailer with bricks and mortar stores, remind your customers that they can buy online and pick up instore (which they can, right?)
VendHQ sums up this option:
Online shoppers almost always have to wait at least a couple of days for their purchases to arrive (or pay handsomely for overnight shipping).
As a brick-and-mortar merchant, you can use this to your advantage by highlighting your ability to provide instant gratification to customers. When communicating with shoppers, emphasize the fact that they can walk out of your store with their items instead of having to wait or pay for shipping.
When selling speed and convenience, the best people to market to are those who are right in your neighborhood–you know, those who are just a few minutes away from your store. Deborah Sweeney, CEO at MyCorporation.com, advises retailers to put themselves in front of local customers. “Brick and mortar stores in smaller cities and towns still have convenience on their side. Remember that even with Amazon Prime, free shipping still takes two days,” she says.
“Make yourself a visible, local presence both in real life and online. That means using whatever traditional marketing tactics work to ensure people locally know about your company and updating your online presence so customers can easily find your store during the research phase of the purchase process.”
NZ Post, not unexpectedly, has launched a special unlimited shipping offer to begin its competitive response to the imminent Amazon threat. NZ Post has just announced the offer, in an email to customers of its YouShop international shopping service:
As a YouShop customer, we know you love shopping online, so we’d like to invite you to take part in an exclusive 2-month shipping trial with NZ Post’s new service Shipmate.
For a one-off payment of $12, you’ll enjoy unlimited shipping from four great New Zealand online retailers – The Warehouse, Warehouse Stationery, Torpedo 7 and Noel Leeming. This introductory price covers most parcels, but naturally some restrictions including weight, size and distance apply.
The trial runs from 14 August to 13 October and is only available to the first 5,000 Kiwis who sign up, so get in quick and pick up any items you’ve been saving in your online shopping cart.
It’s a start — although, in our view, if you’re already buying stuff from offshore stores and shipping them to New Zealand via YouShop, you’re probably not the best prospect for this new service.
For more tips on how to compete with Amazon, remember to check out:
- our Mastering eCommerce course, which covers selling effectively online
- our new Social Media Marketing for Retailers and Online Sellers course, which highlights the best ways to use social media to promote and sell your products online
- our Content Marketing presentation, or our new Content Marketing course, which tell you what you need to know about using content marketing to compete