Despite cautious consumer spending and the rising cost of living, Amazon Australia managed to attract more than 1 million shoppers this past year.
According to consultancy firm Roy Morgan, Amazon Australia’s customer base (shoppers aged 14 and above) reached a total of 7.9 million. This represents a significant 16% increase in its customer base.
Unfortunately, this growth comes at a time when many traditional retailers are struggling, losing their loyal customer bases to online retailers.
Retail growth in Australia
Laura Demasi, head of retail research and social and consumer trends at Roy Morgan, says Amazon’s continued growth is impressive and signals a big change in the landscape.
But at the same time, “Australian retailers are battling it out for a share of dwindling disposable incomes.”
The Australian Retail Outlook for 2024 (courtesy of Inside Retail and KPMG), highlights that e-commerce remains a priority for many retailers. In fact, 31% of surveyed said growing online was a business priority for 2024.
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Amazon’s success in Australia
Amazon’s success can be attributed to several factors, including their vast product ranges, target demographics, and sharpened focus on customer service expectations.
The e-tailer’s diverse product range appeals to a wide customer base. Amazon’s top-selling categories range from books and small electrical goods to clothing, computers, accessories, and more.
Amazon is also successfully reaching their target audience. In this case, shoppers aged 25 to 39. Three in ten of the shoppers in this demographic live in households with over $200,000 income.
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The e-commerce giant also focuses heavily on customer experience. The report emphasizes the importance of customer service, with 55% of retailers expecting consumer expectations for customer service to increase in 2024.
What can traditional retailers do?
The researchers behind The Australian Retail Outlook 2024 suggests that retailers adapt to these challenges by expanding online.
How?
- Omnichannel integration: Seamless commerce across all available channels is vital for success. Focus on reducing friction at every customer touchpoint – online and in-store.
- Personalization: Leverage data analytics and AI to offer personalized shopping experiences, product recommendations, and marketing communications.
- Efficient fulfillment: Invest in supply chain optimization and last-mile delivery solutions to compete with Amazon’s fast shipping options.
- Digital marketing expertise: Invest in digital marketing capabilities to effectively reach and engage customers online.
- Customer service excellence: Prioritize exceptional customer service across all channels.
Demasi warns of potential long-term implications for the Australian retail sector: “If Australia is on track to mirror the US trend, where Amazon accounts for an incredible 37.4% of all online spend, our retail landscape could look quite different in coming years.”
Image credit: Flickr/Quote Catalog
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About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
