Shelley McMillan
Shelley McMillan is Associate Director, Consulting, ANZ, at Mintel. She is responsible for customised consulting projects around clients' strategic objectives.

After months of speculation, it appears that Amazon is confirmed to launch in Australia this week, just in time for the annual Black Friday sale.

Amazon’s launch in the Australian market is set to shake up the sluggish retail sector. As we have seen in other markets such as Singapore, Spain and Italy, the launch of Amazon increases choice and raises consumer expectations. As a result, this brings improvements to customer experience in the wider retail industry while growing the overall e-commerce sector.

Globally, consumers are increasingly expecting products and services to be brought directly to them, wherever they are, as explained by Mintel Trend ‘Straight to You’. Amazon—along with the increasing array of features that it offers—has driven a lot of the innovation in this area, particularly in the United States.

Part of what has driven this success for Amazon is its Prime programme. Amazon Prime is designed to lock consumers into the Amazon ecosystem by offering them a range of benefits including free next-day delivery and early access to sales—features that make it difficult for other retailers to compete.

While Amazon Prime membership does include some of the top frustrations consumers have with programmes, like membership fees and time commitments, its perks outweigh the frustrations for many. This indicates that many consumers are willing to pay and commit to a programme if it is actually seen as rewarding and worthwhile.

Implications for Australia

It is likely that Amazon will leverage the power of Prime to capture early adopters in the Australian market, especially consumers who have previously been purchasing from Amazon’s global sites and paying high delivery fees to access the wide range that the platform offers.

Amazon’s initial pricing strategy will play a very important role in enticing consumers to the site. Mintel research reveals that 57% of metro Australian consumers say that special offers have the largest influence over their purchasing decisions. Amazon has vast product selection and information, which makes it easy for customers to search a multitude of products online and through the app. Competitors who are unable to meet these expectations will likely lose out, since many shoppers will go wherever they get the best deals and product information.

There is no doubt that the global giant that is Amazon will be successful in the Australian market, but the question is at what rate will the impact be felt? What we can expect is that the customer experience bar will be raised; retailers and brands that don’t rise to the challenge will be left behind.

Shelley McMillan is Trend & Innovation Consultant, ANZ, at Mintel, based in the Sydney office. She is responsible for creating local insight reports delving into product category trends and customised consulting projects around client’s strategic innovation objectives.