Digital advertising
What Amazon’s Australian Arrival Means for 2018

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Angie Smith
November 14, 2017

After months of teasing, it appears that Amazon’s long-awaited Australian arrival is finally really just around the corner. As with everywhere that Amazon plants its flag, there’s little doubt that this means good news for local consumers, but what are the implications for Australian firms? Let’s briefly step through four of the more obvious takeaways.

1. Expect a Huge Margin Squeeze Across the Board

Business owners of all stripes, shapes, and sizes across Australia are about to be confronted with a fundamentally different type of competitor to any that they’ve faced before. In stark contrast to most firms on earth, Amazon is perfectly comfortable with a race to the bottom on margin. In fact, that’s what they’re actively seeking.

If you take away nothing else from this piece, remember this: Amazon is after volume not margin – and it doesn’t care how it gets there. Long story short, the air around easy profits is about to get substantially thinner for many Australian businesses heading into 2018.

2. Amazon Marketplace Offers Channel Opportunity

Amazon’s arrival isn’t all bad news for firms. Where the Seattle giant takes away with one hand, it gives with another – in this case, Amazon Marketplace. While traditional online retail looks likely to be first out of the gate, Amazon Marketplace is already being actively pushed to Australian third-party suppliers and offers a tantalisingly well-greased route to the pockets of buyers both home and away.

3. Speed and Logistics Are About to Take Centre Stage

Australian retailers are about to get a short, sharp introduction to what world-class operations and fulfilment looks like in the modern world. Amazon’s ongoing development of a 24,000-square-metre fulfilment centre in Dandenong South shows they intend to hit the ground running when it comes to satisfying Australian consumers quickly.

Expect that initial Melbourne monster to be merely the first stake in the ground. As they dial in further local distribution and join the dots on the wider supply chain, initiatives such as Amazon Fresh, Amazon Prime Now, and Amazon Wardrobe will surely follow.

Peer a little deeper into the crystal ball and Australia could easily prove a fertile testing ground for some of Amazon’s more sci-fi initiatives such as drone delivery and giant floating fulfilment centres.

4. It’s Time to Really  Get to Know Your Customers

Amazon’s relentless focus on customer satisfaction is at the heart of every single major move they’ve made for decades and it’s opened up clear blue competitive water between themselves and every other online retailer. Put very simply, nobody on earth knows their own customers better than Amazon – and nobody’s better at making them happy.

Australian firms’ conception of how well they understand their own market is about to be put under an extremely demanding microscope. Companies that don’t seek to radically improve what they know about their user base over the next year are likely to be facing into very tricky waters longer term.

In the looming Age of Amazon, Australian firms need marketing and advertising partners who are already fighting tomorrow’s wars. While the arrival of Bezos’ troops is going to be a death knell for companies stuck in their own particular mud, there’s opportunity there for those who are prepared to rise to the occasion. Now more than ever, clarity around campaigns, channels, and general communication is going to be an absolutely key differentiator.

Where other agencies will start scrambling to react in twelve months time, we’re already actively ahead of the curve when it comes to sweeping market changes such as Amazon’s entry, and diligently helping clients map out futureproof strategies for 2018 and beyond. Start talking to our team today to make sure your company is taking advantage of the same expert advice!

About Angie Smith
Before founding independent agency MediaSmiths in 2007, Angela had worked on the agency, broadcast, and publishing sides of the media industry and has an incredible insight into how each world works. Since then, Angela has worked across numerous well-known brands covering the whole spectrum of media, and leverages this know-how with her experienced wider team to get the best results for clients.

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