“Australian distributors have just entered the danger zone,” said Eric Johnston, editor of business review at The Australian Journal. This is because people are hesitant to buy offline markets not only during normal times but also at special times such as Christmas and New Year.
According to a second Clicks & Bricks survey conducted by UBS for 1002 Australians, 56 percent of Australian consumers visited the Amazon Australia homepage. It also turns out that 22 percent of consumers actually bought products on the Amazon site, and 29 percent were willing to use Amazon as their primary shopping window.
Australia’s online retail market, which grew 5 percent in 2013, jumped to 8 percent in 2018. The online retail market, which accounts for about 9 cents of the total retail market, is expected to grow to 14 percent by 2023. As a result, UBS said, “$ 300 billion in Australian distribution would be threatened.”
The report by FNZC, a market research firm, reveals the difference in price between the online and offline markets. Compared to Amazon, FNZC’s sample comparisons show that Woolworths is 18 percent more expensive and Coles 25 percent more expensive than Amazon. In particular, cosmetics, hair products, and cleaning products can see a larger price difference.
For outdoor brand Kathmandu, sales volume declined 1 percent after the year-end season. ANZ and Roy Morgan joint surveys show that overall consumer purchases fell 2.2 percent, which also affected local offline store performance.
Meanwhile, Financial Review said, “Woolworth and Coles are in a dilemma about their distribution strategy.” “Will you keep the market share through price reduction?”, “Do you want to keep profitability even if you give some market share to Amazon?”
In the meantime, Woolworths and Coles hold loyal customers through membership benefits such as the Rewards program and are expanding their delivery services. Coles is trying out a new service called “Flyice Max,” and Woolworth has also launched a “delivery saver” service. By offering a subscription service at a reasonable price, they are trying to keep their customers in one brand.Click here for click frenzy deals.