October 2017
October 2017
Amazon’s planned entry into the Australian market has generated intense speculation about the outlook for incumbent players. While Amazon will undoubtedly take some retail share, our research suggests the major impact of Amazon will be to accelerate fundamental changes in the ways companies interact with their customers:
• price transparency will increase
• cost to serve will likely need to fall for those facing direct competition, and
• the customer experience will be enhanced.
The experience of retailers offshore has been highly dependent on their response to a changed industry structure driven by Amazon’s entry. Much like a season of ‘Survivor’, the winners and losers in this new competitive landscape will be determined by the strategies they choose and their ability to execute on these plans, no doubt facing a series of challenges along the way.
With Amazon preparing to launch its Australian domestic operations in late 2018, the pace of innovation and change is set to accelerate in a range of sectors across the Australian market. Companies will need to evolve in order to remain competitive in this new environment. There has been plenty of notice that Amazon is coming and companies can learn from experiences in foreign markets: to do nothing is not an option.
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