John Winning, the founder of Appliances Online, says retailers worried about the approach of Amazon probably have more of a problem with their own business than with competition.
Winning, who is also CEO of the Winning Group, said Amazon’s arrival would without a doubt have a huge impact on the Australian retail landscape.
“But if businesses are now feeling worried and like they need to prepare, the issue is probably with their core business model,” he said.
“Retailers should always be improving their operations as general good business practice and if they haven’t been doing that then they aren’t being fair to their customers, which is why they probably lack loyalty and would happily and easily jump ship to Amazon.”
Amazon, which has made no official comment on its plans for Australia, is expected to be fully operational in Australia by the end of 2018.
The retail giant will be offering the whole catalogue of products including fresh food, takeaway food, electronics, fashion and its grocery delivery service Amazon Fresh, according to a retail executive who recently left Amazon.
Winning said Australian retail had for years happily lagged behind other markets. He said they now needed to start pursuing a global standard to remain competitive when international players entered the market.
“Australia’s retailers need to wake up and realise that if you haven’t got a strong enough business model you’ll be left behind, and this is true whether Amazon enters this year or next,” Winning said.
“Those that think they aren’t prepared now have another year to either continue worrying about Amazon’s arrival or an extra year to prepare and do something different.”
Analysis by Credit Suisse showed Amazon would likely reach a better than 5% market share in many retail categories within five years of arriving in Australia.
Among ASX-listed retailers, Myer could be hit the hardest. Credit Suisse estimated the 117-year-old department store chain faced sales revenue falling by 4% to $3.16 billion in the 2022 financial year, compared with 2016, and EBIT falling 29% to $81 million.
The analysis by Credit Suisse showed Myer at the highest risk followed by Harvey Norman, JB Hi-Fi and Super Retail Group.
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