Amazon a ‘worthy opponent’ for retailers but can’t offer ‘retail as entertainment,’ says NRA

Amazon

With Amazon having its soft launch in Australia, today, Dynamic Business spoke with Dominique Lamb, the CEO of the National Retail Association (NRA) who admitted the ecommerce giant was a ‘worthy opponent’ for local retailers but one that can’t satisfy demand for ‘retail as entertainment’.

[Related: Let’s Talk… Ecommerce and If you can’t beat them, join them: how SMEs can begin taking advantage of Amazon Australia]

“Amazon certainly have the ability to offer consumers low prices and to offer retailers their marketplace capabilities,” she said. “However, the reality is that consumers really enjoy touching and feeling products and they’ll continue to go to shopping centres because it’s all about ‘retail as entertainment’ these days – things like taking for family out for a bite, seeing Santa Claus (at this time of year), going to the movies and other things aside from shopping. Consumers are moving away from mass-produced items and even purchasing things towards experiences.

“Plus, our members have known for some time that Amazon would launch into Australia around this time of year so they’ve been contemplating what this means for their businesses, planning and focusing on new technology to remain competitive.

“Ultimately, online sales make up around 7.1% of all traditional retail sales and online shopping isn’t a new concept for Australian retailers. So, while Amazon is a worthy opponent, our retailers are ready.

Responding to commentators who’ve suggested “If you can’t beat them, join them”, Lamb said retailers “absolutely have to do what’s best for their business”, which may include leveraging the technological capabilities afforded by Amazon’s marketplace model, but that it was important to “read the fine print”.

She explained, “The risk, of course, is that Amazon typically controls a lot of the advertised prices so it’s up to the independent retailer to determine whether that model suits their business and what will give them the best margin.”

Lamb said 2017 has been a positive year in terms of retail spend due to “a high amount of tourist spending in January and February” and the fact that “people were spending like it was Christmas during mid-year sales”.

“Right now, the focus for retailers is on Christmas and making sure they get as much foot traffic and sales as possible,” she said. It’s important for them to offer something new and different, to generate atmosphere in-store, perhaps with a live window or book signing, and otherwise focus on offering a superb customer experience.

“The advantage they have is that what is possible in store cannot be replicated online. We’re seeing retailers embrace personalised shopping, in-store entertainment and new tech such as virtual mannequins and other forms of VR and augmented realty to deliver an experience you cannot get anywhere else. Australian retailers are some of the most innovative in the world so I have no doubt they will stick around even with Amazon now here. It’s just about them understanding their brand and values and really engaging consumers who reflect their values on a meaningful level so they get that brand loyalty.”