There
is much speculation about Amazon's entry to the Australian market and the
possibilities will have significant impact on Australian retailers including
public markets.
Amazon
is famous for its huge share in the online retail market and more recently they
have engaged in bricks'n'mortar expansion.
The
Age this week examined a store model for the Australian super market industry
that could see Amazon smaller format stores, similar to Aldi, that stock a
selection of items that customers want to physically examine like fruit,
vegetables, meat & fish. Other staple items like dry and canned foods would
be ordered from a touchscreen or app.
The technology could be something like
what is shown in this photo below. This is a recent innovation in Finland where
grocery items can be purchased from a giant screen at a bus stop.
It
is suggested that Amazon would operate regional warehouses to handle the
remotely ordered goods and given their fast delivery expertise (one hour
delivery in some places) customers could even have their dry goods on the
doorstep by the time they arrived home from shopping.
There
are significant cost benefits for smaller store operators in rent and staffing
expenses so the profit ratios for Amazon look very attractive.
And
smaller doesn't necessarily mean less choice. Amazon Fresh, the online grocery
service in the US has 500,000 products versus tens of thousands in traditional
super markets and less than 1500 at Aldi.
Amazons
penetration into the Australian market won't all happen at once although given
the lead time needed to prepare for this sort of competition, and the pace of
expansion already seen in other countries, it is likely that Australian retailers
will hardly have time to blink.