The arrival of Amazon

Tristan Kitchener
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Jeff Bezos, founder and CEO of Amazon, says that the reason Amazon is successful is that for the last 20 years they’ve had three big ideas that they’ve stuck with: ‘put the customer first, invent and be patient’. However, if you’re a retailer, or in fact have any business that could be touched by Amazon, another of his sayings might make sitting comfortably a thing of the past: ‘your margin is our opportunity’.

Amazon is valued at over $350 billion and is undoubtedly hurtling towards world domination across a wide range of sectors, including online marketplaces, home delivery, cloud computing, content development to name a few. So, principally, business disruption in general. Furthermore, Amazon’s appetite to improve the customer experience through upstream and downstream supply chain integration is unprecedented – as illustrated by their recent US$1.5billion airport acquisition and leasing 40 planes to guarantee on-time deliveries. This demonstrates Amazon’s determination to be a business that strives to charge customers less, and provide greater value through superior customer service.

Being customer-focused allows you to be more pioneering and Amazon’s strength as a brand is that it’s associated with being innovative and on-trend, with high levels of appeal and a fun place to shop. Amazon’s now fabled Amazon Go concept store in Seattle is looking to revolutionise grocery shopping for the benefit of the consumer by providing a simpler time-saving shopping experience; consumers just walk in, select the products they want and walk out, with the payment fully automated. The ‘staff-less’ supermarket is the equivalent of the driverless car. This stands Amazon in good stead as it looks to provide a full online grocery offer, in a market where its rivals are struggling to differentiate their brands - how much difference is there really between Coles and Woolworths? The unique challenge for Amazon will be how they will adapt their business model in Australia to consider the high-cost of labour and land, large freight distances and being an unknown to consumers in grocery retailing.

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