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Will Amazon “destroy Australian retail” – via pop up ?

 

A retail shake-up is coming…

A few months ago Amazon.com confirmed they are indeed landing soon in Australia – determined to expand their current $1billion (imported) local sales. There was burst of media interest back in April 2017, when the company made an official statement – announcing the search for a logistics facility and a local CEO*. Recent rumours have the first (90,000+mtr) warehouse in south-east Melbourne, and in June they started advertising for a range of staff positions**.

In almost everything they touch, Amazon are renown “category killers” – they aggressively discount prices, often under-cutting established sector-leaders with impossible offers. They also provide a huge range of products and fast delivery. An Amazon staffer was quoted as saying the “company aimed ‘to destroy the retail environment in Australia’ by undercutting local prices to the tune of 30%”***.

In Australia their first target will likely be consumer and home electronics… making the bosses of Harvey Norman and JB Hi Fi pretty nervous. After that (over some years), they will look at food, groceries and other retail sectors. Wesfamers chief Richard Goyder has been quoted as saying “Amazon will eat all our breakfasts, lunches and dinners”*.

Property managers are also very concerned about the arrival of Amazon… luring consumers away from physical bricks and mortar stores. For some years they’ve been improving the shopping centre experience to include expanded food courts, cinemas and entertainment, health clubs and ancillary services… in an attempt to create local “destinations”, maintain traffic – and retain their retail tenants. It may be a tough road ahead for the shopping centres… around 56% of respondents in a Nielsen survey (February 2017) said they would buy from Amazon Australia*** (and that will surely reduce the number of feet walking through traditional stores)

But there is some irony in the strategies used by Amazon… they often launch new concepts (or “invade” established genres and customer-bases) via a physical / retail presence… using pop up ! Last year we discussed Amazing Amazon – and their pop up shops… describing their use of temporary outlets (and the philosophy of pop up retail) to launch Amazon concepts and reach out to consumers. For some time now Amazon has operated small stores and kiosks – there’s currently around 34 Amazon Pop-Up stores across the US (selling ”a variety of its electronic gadgets”****) and also mobile shopping outlets in 6 US cities. The Amazon Treasure Trucks offer just one product at a time, at a discount. Consumers buy the item online and then visit a mobile (truck) store to collect.

All of this course, is designed to sell product – but also to introduce consumers to the Amazon way of (online) commerce… especially using Amazon-specific gateways. Last year we quoted Forbes.com – “what helps Amazon the most is to sell… Amazon. In other words, by selling the devices that increase Amazon’s reach into your home and your life and most important into your shopping habits…”

Amazon uses pop up to trial their new concepts, promote their brand and introduce new technologies. And all the while they’re leading customers further into the web of Amazon services… Surely pop up will be part of the Amazon strategy in Australia. I can’t wait to see what they’ll offer here (and how)… or can I ???

 

* source :      TheAustralian.com.au – Fast, vast and lowpriced Amazon

** source :     SMH.com.au – Amazon Australia’s first warehouse

*** source :    BusinessInsider.com.au – Nielsen: Amazon is coming

**** source :  StarTelegram.com – Amazon to open another pop-up store

Amazon Australia - lifehacker.com

Amazon Treasure Truck - scpr.org

 

images : Amazon Australia – lifehacker.com, Amazon Treasure Truck – scpr.org

 

One comment to "Will Amazon “destroy Australian retail” – via pop up ?"

  1. Andre 07/08/2017

    What an excellent read!

    Reply

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