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What really is the "dread" factor for Amazon in Australia? My understanding from a linked article: https://www.nytimes.com/2017/10/19/books/australias-amazon-b

What really is the "dread" factor for Amazon in Australia? My understanding from a linked article: https://www.nytimes.com/2017/10/19/books/australias-amazon-book-battle.html https://www.nytimes.com/2017/10/19/books/australias-amazon-b... is that there is a culture of loyalty in Australia. So, this should be a walk in the part for other companies. Though as far as I know, and all of this is secondhand knowledge, normal retail in Australia is costly. So, there is a market for cheap discount based retailing in Australia. But I could be wrong.

sdwisely 9y ago
Australians are definitely loyal shoppers, but Amazon are certainly moving into markets that have screwed Australian shoppers for a long time. I wouldn't be sweating it much at the moment if I was for example a local bookshop. OTOH an electronics retailer...
- will_hughes 9y ago
  I'm not sure I'd agree. Take for instance what Bunnings has done to the Mitre 10 brand. The moment there's a lower price that's at least as convenient and serviced, we're gone. Another point of anecdata is what Amazon and other overseas stores have done to local stores. Loyalty by older generations perhaps, but younger generations can see how much we've been screwed by local retailers for years. E: the reason Starbucks failed was because they sold American style coffee, which not enough people like. Cafe culture is incredibly picky about exactly how to make good coffee, so all the chains that hire uninterested inexperienced kids off the street all have problems in places where there's a lot of quality coffee.
  - foobar1962 9y ago
    Loyalty to Gerry Harvey? I doubt it. Aussies know a good deal when they see it: we adopted mobile phones and DVD pretty quickly. Whe alao know a bad deal too: see how Masters failed miserably.
    - will_hughes 9y ago
      Yeah honestly I, and a lot of other people, are welcoming pretty much anything that'll result in Gerry Harvey getting a flogging after his hypocritical and self serving b.s for years. His campaigning for eliminating/lowering the tax-free threshold on items bought overseas online was based on so much spinnning of the truth it's a wonder he didn't catch fire.
      - chris_wot 9y ago
        Yep. Harvey appeals to an older audience, but the truth is - he's not well loved by anyone else other than television networks because of his advertising spend.
  - robryan 9y ago
    I wonder if loyalty to Bunnings played a part at all in the failure of Masters. Of course a large part of it was price and selection. But it seemed though that it was mostly a me too type offering and unless there was a drastic reduction in prices ( drastically better range would have been very hard) people were already pretty happy with Bunnings.
    - petecox 9y ago
      Bunnings (Wesfarmers) had a well-established lead. There was no compelling reason for Masters to enter the market except that Woolworths thought they needed a piece of the action. Such is our supermarket duopoly.
- petecox 9y ago
  Bookshops that are still around have already survived Amazon. Remember Borders Australia? They died spectacularly and it was only the niche players that survived.
adventured 9y ago
The dread factor is the extreme scale and persistence that Amazon is likely to bring to the market. They will keep coming and coming and coming at it until they claw away meaningful market share. They'll lower prices as far as necessary, subsidized by Amazon global; as far as they can without getting in trouble with the government. In most developed nations, including Australia, consumer spending typically grows at low single digits over time. There is no room for Amazon to build a significant business in Australia without taking share away from other domestic retailers.
- gonzo41 9y ago
  I'm ok with this. If more retailers switch to a longer tail model the only downside I can think of is what to do with all the malls we have rocking about.
  - ianhowson 9y ago
    Knock them down, build more apartments and sell them to the Chinese.
jpatokal 9y ago
Aussie here. The Australia Tax [1] is absolutely a thing here: for example, it's difficult to buy decent kids' shoes for under $100 (!), whereas you can walk into any Payless in the US and walk out with a decent pair for $25 or so. Check this out if you don't believe me, and note that this is not a high-end retailer or anything, it's a chain with an outlet in every suburban shopping mall in Australia: https://www.shoesandsox.com.au/school.html https://www.shoesandsox.com.au/school.html There's a huge slew of reasons for this, but it's a sum of very high rents and wages, a small market and a general lack of competition. Ebay, Aliexpress and Amazon US are consequently very popular, but most retailers are international so shipping is slow and, for anything bulkier, quite expensive. (Also, the deals aren't quite as good as they used to be since the Aussie dollar has depreciated against the USD.) So, if Amazon can build a local operation here that -- for the first time in Australia -- has the trifecta of low prices, wide selection and fast shipping, they will crush the competition, online and offline. Which is why local retailers are scared shitless. [1] https://en.wikipedia.org/wiki/Australia_Tax https://en.wikipedia.org/wiki/Australia_Tax
- will_hughes 9y ago
  The other thing which has made importing shoes and other clothing items difficult is now that US brands sites won't ship overseas, and they've started blocking shipments to known reshipping services too. I can still buy three pairs of name brand shoes from a US purchasing service (who purchase from the brand's own site) and have them shipped to Australia for less than the price of one pair on that brand's site here in Australia.
  - petecox 9y ago
    ebay from AUS sellers has served me well this year on their site-wide 10-15% off deals. e.g. Merrell, Colorado, Columbia and Timberland, $50 cheaper than at a physical shop. KEEN doesn't seem discounted much though.
- criddell 9y ago
  > it's a sum of very high rents and wages, a small market and a general lack of competition Australia is like Canada in a lot of ways yet retail in Canada is nowhere near as bad as Australia. Why is that? Is it all about proximity to the US?

sdwisely 9y ago

Australians are definitely loyal shoppers, but Amazon are certainly moving into markets that have screwed Australian shoppers for a long time. I wouldn't be sweating it much at the moment if I was for example a local bookshop. OTOH an electronics retailer...

will_hughes 9y ago
I'm not sure I'd agree. Take for instance what Bunnings has done to the Mitre 10 brand. The moment there's a lower price that's at least as convenient and serviced, we're gone. Another point of anecdata is what Amazon and other overseas stores have done to local stores. Loyalty by older generations perhaps, but younger generations can see how much we've been screwed by local retailers for years. E: the reason Starbucks failed was because they sold American style coffee, which not enough people like. Cafe culture is incredibly picky about exactly how to make good coffee, so all the chains that hire uninterested inexperienced kids off the street all have problems in places where there's a lot of quality coffee.
- foobar1962 9y ago
  Loyalty to Gerry Harvey? I doubt it. Aussies know a good deal when they see it: we adopted mobile phones and DVD pretty quickly. Whe alao know a bad deal too: see how Masters failed miserably.
  - will_hughes 9y ago
    Yeah honestly I, and a lot of other people, are welcoming pretty much anything that'll result in Gerry Harvey getting a flogging after his hypocritical and self serving b.s for years. His campaigning for eliminating/lowering the tax-free threshold on items bought overseas online was based on so much spinnning of the truth it's a wonder he didn't catch fire.
    - chris_wot 9y ago
      Yep. Harvey appeals to an older audience, but the truth is - he's not well loved by anyone else other than television networks because of his advertising spend.
- robryan 9y ago
  I wonder if loyalty to Bunnings played a part at all in the failure of Masters. Of course a large part of it was price and selection. But it seemed though that it was mostly a me too type offering and unless there was a drastic reduction in prices ( drastically better range would have been very hard) people were already pretty happy with Bunnings.
  - petecox 9y ago
    Bunnings (Wesfarmers) had a well-established lead. There was no compelling reason for Masters to enter the market except that Woolworths thought they needed a piece of the action. Such is our supermarket duopoly.
petecox 9y ago
Bookshops that are still around have already survived Amazon. Remember Borders Australia? They died spectacularly and it was only the niche players that survived.

adventured 9y ago

The dread factor is the extreme scale and persistence that Amazon is likely to bring to the market. They will keep coming and coming and coming at it until they claw away meaningful market share. They'll lower prices as far as necessary, subsidized by Amazon global; as far as they can without getting in trouble with the government. In most developed nations, including Australia, consumer spending typically grows at low single digits over time. There is no room for Amazon to build a significant business in Australia without taking share away from other domestic retailers.

gonzo41 9y ago
I'm ok with this. If more retailers switch to a longer tail model the only downside I can think of is what to do with all the malls we have rocking about.
- ianhowson 9y ago
  Knock them down, build more apartments and sell them to the Chinese.

jpatokal 9y ago

Aussie here. The Australia Tax [1] is absolutely a thing here: for example, it's difficult to buy decent kids' shoes for under $100 (!), whereas you can walk into any Payless in the US and walk out with a decent pair for $25 or so. Check this out if you don't believe me, and note that this is not a high-end retailer or anything, it's a chain with an outlet in every suburban shopping mall in Australia: https://www.shoesandsox.com.au/school.html https://www.shoesandsox.com.au/school.html There's a huge slew of reasons for this, but it's a sum of very high rents and wages, a small market and a general lack of competition. Ebay, Aliexpress and Amazon US are consequently very popular, but most retailers are international so shipping is slow and, for anything bulkier, quite expensive. (Also, the deals aren't quite as good as they used to be since the Aussie dollar has depreciated against the USD.) So, if Amazon can build a local operation here that -- for the first time in Australia -- has the trifecta of low prices, wide selection and fast shipping, they will crush the competition, online and offline. Which is why local retailers are scared shitless. [1] https://en.wikipedia.org/wiki/Australia_Tax https://en.wikipedia.org/wiki/Australia_Tax

will_hughes 9y ago
The other thing which has made importing shoes and other clothing items difficult is now that US brands sites won't ship overseas, and they've started blocking shipments to known reshipping services too. I can still buy three pairs of name brand shoes from a US purchasing service (who purchase from the brand's own site) and have them shipped to Australia for less than the price of one pair on that brand's site here in Australia.
- petecox 9y ago
  ebay from AUS sellers has served me well this year on their site-wide 10-15% off deals. e.g. Merrell, Colorado, Columbia and Timberland, $50 cheaper than at a physical shop. KEEN doesn't seem discounted much though.
criddell 9y ago
> it's a sum of very high rents and wages, a small market and a general lack of competition Australia is like Canada in a lot of ways yet retail in Canada is nowhere near as bad as Australia. Why is that? Is it all about proximity to the US?