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Amazon A No Show As Consumers Claim Black Friday A Gimmick

Amazon is a no show in Australia almost 18 hours after they told Marketplace partners that they had to be ready to supply products by 2.00 Thursday.

Several Marketplace participants who were expecting Amazon to launch around a Black Friday promotion said that they had “not heard a thing” from the big US online retailer.

Amazon, who globally has been hyping Black Friday sales in several Countries has been credited by analysts as being responsible for bringing what started in the US as a sale day after Thanksgiving to Australia.

“The fact that they were set to launch in Australia on what was labelled Black Friday has ignited hundreds of Australian retailers to also go early with Black Friday sales” said a Citi analyst.

A survey of Australians yesterday that consisted of 50% male and a mix of women aged between 24 and 60+ revealed that the Black Friday concept is simply “A gimmick” and they preferred to get their bargains during the New Year sales.

They are not alone in the UK where Black Friday is in its third year sixty-eight per cent of shoppers believe Black Friday, was established solely as a marketing gimmick.

The average Brit takes advantage of 84 deals each year, for a total annual saving of almost $500 through their sales-conscious shopping.

But despite this appetite for a bargain, 65 per cent said will resist the temptation to buy a Christmas gift in the Black Friday sales.

A spokesperson for car manufacturer Dacia, which commissioned the study, said: “We may think we can see straight through the cheeky ploy of Black Friday”.

Despite the failure of Amazon to launch in Australia on Black Friday it has not stopped their critics coming out of the woodwork to slam their arrival.

Harvey Norman boss Gerry Harvey said his retail chain would likely match price with Amazon if they launch “competitive” prices, but “if they come out and do bait advertising and predatory pricing, that’s a different thing”.

Mr O’Connor said large Australian chains and retailers without modern online strategies were justified in their concerns about Amazon’s arrival, though it would fall well short of the “retail apocalypse” some predicted.

“There will be some players who fall over, there will be some players who do struggle, but there will be others who position themselves effectively,” Mr O’Connor said.

“I don’t think there’s any doubt that retailers need to be concerned and need to be driving innovation in their own businesses and rethinking their operations, not resting on their laurels.”

The additional competition is putting small and medium businesses under serious pressure, according to PayPal research released today (Friday), which showed almost one in three were concerned about growing online competition stealing sales.

PayPal Australia spokesman Brian McDonnell said the study of 200 business owners showed they were keenly aware about the added rivalry for Christmas purchases this year.

“Twenty-eight per cent of businesses surveyed are stressed about online competition,” he said. “Amazon definitely factors into their thought processes there.”

The study also showed two in three business owners were stressed about the holiday season, and one quarter said they didn’t have time to relax or complete their own Christmas shopping.

Amazon arch rival eBay has warned that retailers selling via Amazon Marketplace risk having the e-commerce giant rip-off their products for its private label range.

eBay Australia and New Zealand managing director Tim MacKinnon said competition was “great for the market and great for consumers, as long as the competition is fair”.

“We let every retailer big and small compete,” he said. “Where you get players that try to use the data they get and then decide to go and retail those items themselves, that’s where it becomes a little unfair. We will be watching that carefully.”

While eBay runs a pure marketplace, Amazon’s mixed model means it can come into competition with its own sellers. “So whenever a seller sells [through Amazon Marketplace], they expose how much they sell,” Mr MacKinnon said.

Thomas O’Connor from US research group Gartner said consumers would be the winners out of Amazon’s launch as Australian retailers were already lowering prices and lifting their game to meet the foreign competition, with retailers like JB Hi-Fi launching same-day deliveries and Woolworths announcing plans to trial one-hour deliveries from “dark stores” in Sydney.

Amazon was unlikely to deliver cheaper prices on all items, Mr O’Connor predicted, though there would be some door buster-style specials on offer.

“Amazon is likely to have some loss-leaders, or some products that will be the cheapest in the market, but they won’t be the cheapest in everything,” he said.

“Australians have been building their hopes up too high that Amazon will be the cheapest across a full range of products.”

Amazon could ignite a price war if it chose to “undercut Harvey Norman” on everyday staples, though, according to one Australian business owner listing goods with Amazon yesterday who asked not to be named.

According to a report by UBS, Amazon is likely to snare only 2 per cent of retail sales within five years of entering Australia, growing revenues from more than $400 million to about $3.5 billion by 2023 and crimping retailers’ sales about 2 per cent.