Amazon: Good or Bad?

Chances are, you already have an account with Amazon.  And you’ve bought at least something from them.  It was either well priced, or you didn’t mind the extra because it was a way to get an item that was otherwise not accessible to you.

But with Amazon moving in next door (Australia), we are likely to see even better shipping times.   Retailers in Australia are crapping their pants.

Australia’s big supermarkets are gearing up to meet the threat of Amazon, with Woolworths planning to offer what it calls extreme convenience.

With the US online retailer expected to start operations in Australia in the next two or three months, the damage that it can do to retailers’ profit has become a very tangible threat.

In response, Woolworths has established pick-up points for online grocery orders at all of its 970 supermarkets around the country and is also testing one hour deliveries.

It believes many customers will want to order their groceries online then pick them up on the way home from work rather than having to wait around for a delivery driver.

The Woolworths app on customers’ smartphones will let the shop know when the customer is approaching so their order can be ready to go. In about 100 locations shoppers will be able to pick up their groceries via drive through.

It is one way the retailer is responding to customer demands for “extreme convenience” and is aiming to provide customers with a wider choice in how they get their groceries.

Woolworths is not underestimating the threat.

“Amazon is obviously a very material potential competitor in this space,” chief executive Brad Banducci said last month.

“Customers are looking for a lot more convenience in the way they shop. Amazon and many others are of course going to provide that convenience if we don’t.”

The thing is, you could have been providing that convenience to start with.  That makes it very much harder for a gigantic retailer like Amazon to come in and make a big splash.   The Australian market have been caught napping, and are now trying to do a quick sprint in the hope they might win.

Supermarkets killed mom-and-pop general stores.  Amazon is simply the next iteration of the market using technology and scale to give customers what they want.

I welcome our new retailing overlords.  The customer wins.

 

– Christopher Niesche, NZ Herald

 


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