By and large we are not ready for Amazon with most retailers having carried out little or no preparation or defined their strategy to differentiate, compete and grow.
The upcoming battle for Australia’s consumers hearts and minds is an unfair battle with Amazon at a huge advantage against our retailers that why it is so surprising how unprepared we are for the battle.
The best example of an Australian Retailer that lacks preparation would be Myer, who while talking up their strategy of competing head to head with Amazon through a Myer Marketplace currently have a Myer Online Store that would have in our opinion less than 50% of the functionality and 10% of the choice of Amazon. How they are going to translate this into a marketplace is beyond me and this is from a retailer that first espoused their online strategy around 2007, its taken them 10 years to end up with a very average multi channel strategy. Of course the share market has already expressed their opinion on Myers Strategy via their share price.
Its unfair !!
- Size: Its rumored that Amazon has already over 1,000 full-time staff in Australia working on their eCommerce offering more that Myer employ for their back office and operations for the whole business
- Talent: Who wants to work for a business that we believe will grow from about $1 Billion now to $20 Billion over the next several years in Australia versus Myer whose revenue has languished at around $3 Billion for several years? The talent war has already been lost.
- Assets: The total assets at Amazon are US$115 Billion at Sept 2017 versus Myer US $1.44 Billion (Aus$1.878 Billion at June 2017)
To Summarise : Myer is but one example of a retailer be it one of our largest that has underestimated Amazon and the fast fashion “3 Amigos” , over estimated their own ability and come up with a strategy that will be almost impossible to execute. However at least they have put some thought into it. For many retailers big and small the most they have done is attend some talks and conferences on Amazon and continued on their merry way towards Xmas.