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Amazon faces an uphill battle to sell groceries to Australians

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Many shoppers who already buy their groceries online aren’t that keen to use Amazon when the US retail giant launches in Australia.

Deutsche Bank’s annual Battle for Baskets survey of 2,400 people found a third of shoppers who currently get groceries online said they would not buy from Amazon.

Among all shoppers, including those who don’t shop online, more than half (57%) said they wouldn’t consider buying from Amazon.

The survey shows the impending launch of Amazon has driven shopper interest in online, including those who don’t already do so.

“However, shoppers who currently purchase groceries online are not universally ready to embrace Amazon,” says Deutsche Bank.

“While we think Amazon will boost take-up in online grocery shopping, in our view, the incumbent retailers will dominate online retail as well as bricks and mortar.

“In terms of how much take-up it will drive, we think Amazon will be closer to the share of specialty retailers than any mainstream supermarket today.”

What the survey found among all shoppers, including those who shop online and those who don’t:

Deutsche Bank says Coles’ online shoppers are more unwilling to use Amazon than Woolworths.

“While it is hard to be conclusive, we suspect the reason for this is that Woolworths’ online business is larger than that of Coles, so more Woolworths customers are used to shopping online,” Deutsche Bank says.

The majority of bricks and mortar shoppers would not consider buying from Amazon. However, the minority who would is still a large number, about 38%. They indicated they would consider buying non-perishable goods, not fresh.

“The fact that such a large proportion of existing bricks and mortar only shoppers would consider buying from Amazon is important,” says Deutsche Bank.

“It means some combination of Amazon’s reputation for price competitiveness and convenience or even simply their newness will help expand the proportion of online grocery shoppers.

“However in our view, the fact that fresh was weak means Amazon is likely to become another channel in the Australian consumer’s list of cross shopping destinations.”

For shoppers who wouldn’t buy from Amazon, the majority said they liked the in-store experience, as this chart shows:

“This is another positive for bricks and mortar supermarkets and perhaps ties into the discussion around fresh earlier,” says Deutsche Bank.

“Fresh as a category is growing and at this time, it is only practically feasible to shop the category in store. Additionally, as Amazon is a new entrant into Australia, the fact that it is not a locally known brand saw a lack of trust as the second most important reason shoppers would not buy from Amazon.”

Here are the reasons those surveyed gave for why they would shop with Amazon:

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