Overview of Amazon in Australia
An organisation formulates market strategies with an aim to attain the following three objectives: diagnosing the strengths and weaknesses of the existing market strategies; using the evaluation to ascertain suitable strategies for future and keeping a check on how far the strategic modifications were able to produce a positive influence on the organisation (Grant 2016).
The current annual rate of growth of the e-commerce industry is 6%, exhibiting a huge potential for growth in this sector (Business Insider Australia 2018). In order to utilise it for profit making objectives, it is important for online retail companies to keep their market policies, execution-designs and plans up to date and coherent with the changes in the business environment. Amazon is considered to be the pioneer, and currently, one of the world’s largest provider in e-commerce division in terms of product choice, speed and price. So far, through intensive growth strategies it has been able to dominate the market. As per the latest annual report, Amazon has overshadowed its competitors like Alibaba, eBay and JD.comand with a revenue of $135.99 billion (Ibisworld.com.au. 2018). Over the next five years, it is predicted that Amazon would reach an incremental growth amounting to $2 billion in the online grocery alone (The Guardian 2018). The market research analysis of online retail industries in Australia has shown that the demographic range between 18 years to 34 years accounts for 40% of the total yearly international expenditure (BBC News 2018). As per Nielson report, by the end of 2017, the total number of Australian adults who visited Amazon site was around 4.6 million and the trend is anticipated to rise by the end of 2018 (Business Insider Australia 2018).
The following report analyses the different market strategies, defined and implemented by Amazon, has helped it to acquire the leading position in Australia’s e-commerce industry.
Amazon, the e-commerce giant, was founded in 1994 by Jeff Bezos who is the current CEO of the company (Ibisworld.com.au 2018). The company had initially started as an online bookstore but now it sells a wide variety of products ranging from video Games, home-improvement products, apparels, shoes, accessories, electronics, toys, jewellery, toys, sports and outdoor products along with a few Amazon exclusive products like Kindle e-readers, internet casting devices such Fire-stick and virtual assistant- Amazon Alexa. Right after Apple, Alphabet and Microsoft, it is considered to be the fourth, most outreaching, multinational traders in the world (The Guardian 2018).
Market Research and Analysis
Amazon had penetrated the Australian market in December, 2017 (HuffPost Australia 2018). It has officially inaugurated their 24,000 square metre centre in Melbourne’s Dandenong South, the head office being in Sydney (ABC News 2018). Rocco Braeuniger has been appointed as the Country Manager in charge of the head office (BBC News 2018). In the Pellicano’s M2 Industry Park, the flagship Fulfilment Centre would be established, providing locational convenience being connected to the South Gippsland Highway, Monash Highway and Eastlink (The Guardian 2018). The fulfilment centre boasts of rounding up more than 250000 products with additional products in line (CNBC 2018). To elevate the economic gig, the company has set up Amazon Marketplace in Australia which enables the third party retailers to enlist their product on the website at their own price setting.
To generate leads and make sure that their message is being heard and accepted by the customers, Amazon made use of unique methods to develop their content (Zott and Amit 2013). Such niche content powered by the existing brand value fuelled considerable traffic to their website
Apart from improving the website content, Amazon concentrated on service delivery through features like personalised email marketing and subscription services. This helped in keeping their existing and potential customers engaged and updated on every new offer, discounts, flash sales and also policies of the company (Grant 2016).
Being an online retailer, Amazon lends its primary focus on the availability, variety, exclusivity and on time delivery of the products. Therefore, in its attempt of developing the above aspects so as to spread its impact across the Australian Market, it had introduced specific searchable product features and licensing exclusivity of various deals (Amazon.com.au. 2018).
This is one of the main corporate strategies applied by an organisation when it want to create a position in a market in which it has not operated before. To fulfil this need Amazon has introduced the Amazon Exclusive products such as internet casting device, virtual assistant and e-book reader along with its Prime schemes facilitating delivery like the 1-day delivery to the Australian customers to build and strengthen their long term association with the company.
Paid Advertising is the type of marketing, Amazon Australia made use of Print and Television Media to reach out to its customers.
The Company made use of Internet marketing strategies like pay per click, cloud marketing to gather customers via internet.
Word of Mouth strategy depended on how the services by Amazon was received by its customers. With smart displays and variety of options, Amazon strived to create a positive impression in the mind of its first-time customers who can go on to promote the company to other potential buyers (Baker 2014). It is traditionally considered to be one of the most important strategies.
Market Strategies implemented by Amazon
When a company such as Amazon has to maintain its brand reputation while expansion in a new region, it has to indulge in meeting high volumes of target. The company facilitates it by mobilising its target customers through huge discounts, promotional products and shopping coupons. Thus, through Transactional Marketing, Amazon Australia motivated and encouraged the customers to be a part of its legacy (McQuarrie 2015).
Through this strategy Amazon Australia tries to build relationship with new customers and strengthen relationship with its existing customer base (Baker 2014).
The Amazon Fulfilment Centre that was set up at Dandenong South focussed on recruiting the best and the brightest talents to maintain the rate of growth at a continuous pace. The company believed that it was a necessary measure to secure its position in the Australian Market. It is through this Fulfilment Centre that customer’s orders were accepted in Australia. The Fulfilment By Amazon or the FBA Services ensured that customers could readily access the Prime-Eligible products (Services.amazon.com. 2018). This newly launched service strived to provide unparalleled benefits to its enrolled member-customers like fast shipping, delivery within two days and entertainment prospects.
Many successful small Australian business firms celebrated its first ever Amazon Prime Day by participating in numerous deals. A prominent example included Checkered Choice which made available to its customers a number of deals across kitchenware products (HuffPost Australia 2018). The Prime member-customers had access to the widest range of selected merchandise with the assured benefits free delivery of both local and international items. The day also marked the launch of Amazon Prime Video that brought in Original Series and popular movies; Amazon Kindle that gave access to more than 1000 e-books with Prime reading benefits and Twitch Prime that catered to the gamers (D’Souza and Jansen 2015).
Various entrepreneurs took advantage of Amazon’s emergence in Australia by launching their products and services through it. One such outstanding example is that of KoalaSafe by Steve Pack (BBC News 2018). It was an application that enabled parents to monitor their children’s internet usage. It consisted of interesting features such as the ‘Homework Mode’ that induced children to focus on relevant school work and averted distraction of social media. This app was launched successfully by Amazon in 2015 and even helped it get huge global response. The entrepreneur, Steve Pack for letting him reach to his potent customers via affordable means offered by Amazon.
The current Australian economy is faced with a situation whereby retail industries are shifting from their traditional physical stores to online retailing. Current economic reports have revealed that growth in online retail sales are faster than those in brick and mortar. This paradigm shift occurred with changes in consumer preference being directed more to suit their lifestyle conveniences. However, the retail industry as a whole has been found to underperform with sales figure accounting for less than 15 per cent of total retail spending (McQuarrie 2015). This has occurred owing to several reasons like Increased Orientation of Consumer Preference towards Experiences, Extreme Competition among various Brands causing Margin Compression, Federal hindrance leading to Unprofitable Consumer Prioritisation and Inflation limiting the Spending Capacity of Consumers. These aspects have been elaborated in the below paragraphs:
Unique methods of content development
The consumer base of retail has declined by 4.4 per cent of consumers from 2016 to 2017 (iTnews. 2018). This was partially caused by the late arrival of winter season.
Clothing brands, especially those in the children’s section such as Payless Shoes, Pumpkin Patch and Rhodes & Becket have recently collapsed owing to rising cost and stifling competition from the international market (Eiu.com. 2018). In order to withstand this high competition, online retailers have to indulge in year-round discounting in the face of rising cost of products which creates an added pressure on the gross margin.
In their attempt to revive the figures of sales conversion rates amidst tough competition and also deliver as per the consumer’s expectations, the online retailers are collaborating with more anonymous brands (Proctor 2014). However, in the light of a stagnant Federal Budget which is not aiding to stimulate spending, consumers are more inclined towards household savings instead of going experimental with their purchase.
With inflation, the rate of wage growth reduced considerably which further raised the housing and utility costs, leaving less amount of disposable income with the consumers (Zott and Amit 2013).
Through implementation of efficient market strategies that are aligned with the commercial circumstances in 2018 Amazon can stay afloat successfully in the Australian market. Some of these strategies include adequate management of supply chain. By strengthening the supply chain through competent strategic management of the resources, it is quite possible for Online Retail giants like Amazon to considerably overcome the economic crisis posing challenges to its business development in Australia.
The second market strategy involves undertaking monumental and path-breaking product launches that serves to attract a huge crowd. In 2018, there are numerous online retail that are in competition with Amazon, a few of these organisations being of the same scale. Therefore, only a unique product that suffices the needfulness of this generation at a cheaper cost, good quality assurance and saves time would be able to generate the much needed acceptance and reliance of the people on this organisation and would thus help it to stay afloat in the long run (Business Insider Australia 2018)..
It is the dynamism of consumer demand and preferences, affecting their buying behaviour, that Amazon has to keep under consideration while undertaking these monumental launches and evolving with time (ABC News 2018). Another aspect that helps in keeping an organisation in market for a longer period includes strategic evolution in branding and promotion. Amazon could keep the authentic essence of its structure intact by introducing those faces for branding that its potential customers can relate with, like regular citizens in their daily course of life. The biggest way in which a consumer’s willingness towards purchasing a product gets affected is when he or she is able to identify with it. Amazon might reflect on such approaches to expand competently in the Australian Market.
Service delivery through personalised email and subscription services
In the past, the economically middle class strata of the society mostly bought to suffice their necessity but with the advent of online retail like Amazon, the buying power of potential customers have considerably increased owing to factors like business subscription, same day delivery, one-tap purchase and auto-renewal of those subscriptions. Now, consumers are more inclined towards shopping for products other than those which simply account for streamlined routine purchases (Amazon.com.au 2018).
A future can only be secured when strategies implemented at present are modified to suit the need of future. In lieu of this fact, Amazon has initiate a number of strategic evolutions to secure its prospect in the Australian Market. These include strengthening social media marketing approaches, deliver customised products to customers, increased reliance on robots, launching products that has value for money, enhancing mobile e-commerce and aligning with overall technological up-gradation in the online retail industry (Amazon.com.au 2018).
Conclusion
In concluding the above analytical report it can be stated that market strategies are the pillars on which both short-term and long-term sales goals of a company depend. In order to frame such effective strategies it is necessary that the company undertakes a thorough evaluation of market dynamics influencing the macro and micro aspects of the business, demographics of the potential consumers and the competitive environment in which the organisation operates. The plan of action is required to have a niche content accompanied by advanced technical facets such that consumers are able to develop a clear understand with its nature of service delivery. Only by adapting to these scopes can an organisation comprehend the possible threats and opportunities in the market and take necessary strategies to achieve its goals. Internet retailing Giant, Amazon has taken these exact steps for penetrating and expanding its influence across Australia. After close assessment of the market structure, it had designed strategies based on the knowledge acquired on the following aspects:
However, the success of these strategies are dependent on only the finite details there are impacts of socio economic and political factors that have the potential to cause disruption in the continuity of sales growth. Therefore it is recommended that online retail industries like Amazon needs broader alternatives that can optimise the situational crisis as and when they arise. By such optimisation in its operation with the help of new and innovative business ideas, the company would be able to rapidly achieve its goal of a sustainable market in Australia.
References
ABC News. 2018. Amazon unveils next phase of Australian push. [online] Available at: https://www.abc.net.au/news/2018-02-27/amazon-rolls-out-next-phase-of-australian-launch/9489078 [Accessed 27 Aug. 2018].
Amazon.com.au. 2018. Marketing strategy decision focused approach. [online] Available at: https://www.amazon.com.au/Marketing-Strategy-Decision-Focused-Approach-8th-ebook/dp/B00DC869VG [Accessed 13 Sep. 2018].
Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher Education.
BBC News. 2018. Amazon enters Australia for first time. [online] Available at: https://www.bbc.com/news/business-42233752 [Accessed 27 Aug. 2018].
Business Insider Australia. 2018. Amazon’s Prime launch in Australia is more aggressive than anyone expected. [online] Available at: https://www.businessinsider.com.au/amazon-australia-prime-launch-2018-6 [Accessed 27 Aug. 2018].
Business Insider Australia. 2018. Everything you need to know about Amazon Australia. [online] Available at: https://www.businessinsider.com.au/how-will-amazon-australia-work-2017-11 [Accessed 27 Aug. 2018].
CNBC. 2018. Amazon finally launched in Australia — and other retailers immediately rallied. [online] Available at: https://www.cnbc.com/2017/12/05/amazon-finally-launched-in-australia–and-other-retailers-immediately-rallied.html [Accessed 27 Aug. 2018].
D’Souza, V.H. and Jansen, J., 2015. Amazon’s strategies in the eBook and eReader markets (Doctoral dissertation, Bachelor’s thesis). Retrieved from https://pure. au. dk/portal/files/86407610/201208071_thesis. pdf).
Eiu.com. 2018. Amazon entry looms over Australian retail. [online] Available at: https://www.eiu.com/industry/article/195597403/amazon-entry-looms-over-australian-retail/2017-06-20 [Accessed 27 Aug. 2018].
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
HuffPost Australia. 2018. Everything You Need To Know About Amazon’s Plans For Australia. [online] Available at: https://www.huffingtonpost.com.au/2017/08/22/amazon-everything-you-need-to-know-about-its-plans-for-australi_a_22494323/ [Accessed 27 Aug. 2018].
Ibisworld.com.au. 2018. Amazon Corporate Services Pty Ltd – Retail. [online] Available at: https://www.ibisworld.com.au/australian-company-research-reports/information-media-telecommunications/amazon-corporate-services-pty-ltd-company.html [Accessed 27 Aug. 2018].
iTnews. (2018). Borders Australia lays down challenge to Amazon.com. [online] Available at: https://www.itnews.com.au/news/borders-australia-lays-down-challenge-to-amazoncom-174179 [Accessed 13 Sep. 2018].
McQuarrie, E.F., 2015. The market research toolbox: a concise guide for beginners. Sage Publications.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Services.amazon.com. 2018. Fulfillment By Amazon (FBA) fulfillment services – Amazon.com. [online] Available at: https://services.amazon.com/fulfillment-by-amazon/benefits.html [Accessed 13 Sep. 2018].
the Guardian. 2018. Australian retailers resilient as they face down ‘Amazon effect’. [online] Available at: https://www.theguardian.com/technology/2018/feb/14/australian-retailers-resilient-as-they-face-down-amazon-effect [Accessed 27 Aug. 2018].
Zott, C. and Amit, R., 2013. The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11(4), pp.403-411.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
