amazon's logo on a glass wall

It’s official. Amazon is landing on Australian ground to take online shopping to the next level. The giant officially announced its arrival will take place in late 2017. What does that mean?

The past few weeks have been bitter and sweet. While online shopping addicts were delighted by the freshly revealed information, local business owners unleashed an outburst of resentment.

According to Gerry Harvey, founder of one of the largest Australian retailers Harvey Norman, Amazon will face a tough battle on the southern continent. What concerns local retailers the most is the significant price battle, that Amazon is likely to start.

After launching its local Web Services in Australia back in 2012, and a year later – a Kindle Store, Amazon now has over 1000 employees across Australia. While the digital book shopping experience helped thousands of Australians to discover and buy their favourite books, launching retail is respectively the next step forward. What Amazon is focusing on, is lower prices, fast delivery and a wide selection of goods.

The newly launched retail service of Amazon is likely to reshape not only the online shopping habits and experience for Australian users, but the way Australian businesses develop their competing and communications strategies. According to Scott Wiseman, executive officer of the national independant hardware industry’s association, Australian’s market is fairly concentrated, having over 6,000 operators and nearly 4,000 suppliers. Large brands such as Bunnings and the Independant Hardware Group are taking a significant amount of the market shares. Having Amazon launching their retail services, means that they will both be directly competing with already established businesses, as well as shopping centre owners.

The traditional suburban malls are the next on the line, when it comes to the battle of who is taking larger piece of the pie. Whilst statistics show online e-commerce has eloquently grown and mobile shopping begins to gain leads in the battle of alternative ways to shop (Amazon ranks fourth with 68.6%, after Yahoo, Facebook and Google), sooner or later, the physical shopping experience is likely to substantially change, focusing more on providing experiences, rather than selling goods and products. 70% of the survey participants marked their smartphones as their favourite ways to shop, while the reported traffic data for e-commerce conversions rate about 30%. 44% overtake the initial search at Amazon’s catalogs.

With social media, pushing users to order services and products through mobile apps, e-commerce is certainly reversing the way to shop and interact with businesses. A change is necessary for survival.