Amazon Has Failed To Live Up To Pre Launch Hype As Consumers “Come Home”.
Consumers are shifting to shopping on local retail sites according to new research and Amazon has failed to live up to the pre-launch hype with Australian consumers less excited now about its expansion than they were 12 months ago new research reveals.
Visits to Amazon sites grew 24 per cent year on year between February and April after dropping 11 per cent in 2017, while online traffic excluding Amazon rose 8.3 per cent.
However, not all Australian retailers are benefiting from the rising tide. Local brands including Catch Group, Kogan.com, Kmart, Dan Murphys, Rebel Sport and The Iconic have enjoyed stronger web traffic.
But mid-market brands such as Harvey Norman, JB Hi-Fi’s The Good Guys, Supercheap Auto, API’s Priceline, Temple & Webster, Booktopia and Cotton On have lost traffic during the past six months according to the research.
Also losing ground by 0.3% has been market leader eBay despite eBay launching a range of services.
“Amazon’s arrival has coincided with a lift in online shopping as a whole – it really has prompted a fundamental step change in how people are shopping online for brands in Australia,” said Mindshare chief strategy officer Joe Lunn.
“However, not every brand has seen a boost or a benefit from the arrival of Amazon. There are still a number of brands … that are going to struggle,” Mr Lunn told a Mindshare presentation in Sydney on Tuesday.
The biggest disappointment with Amazon has been felt by consumers who previously shopped on Amazon global sites, with “excitement” dropping from 41 per cent to 28 per cent as Amazon’s local offering failed to replicate that of overseas. “Consideration” or propensity to buy fell 19 per cent to 15 per cent.
Despite this disappointment, visits to Amazon sites rose 24 per cent or 1.3 million a month year on year between February and March after dropping 11 per cent in 2017.
“So not only has Amazon seen a significant bump in audience traffic over that period but the entire category has risen in line with that – that’s a fundamental step change for online shopping in Australia,”
Mr Lunn said Amazon had not convinced shoppers on its overseas sites to make the switch to the local platform and this may have prompted its decision to use changes to the goods and services tax regime next month as an excuse to stop Australian shoppers from importing products from its overseas sites.
After yesterday’s launch of the half-baked Prime service in Australia observers claim that the initial impact of Prime would be muted by the fact that the bulk of products on amazon.com.au are sold by third-party sellers and are not eligible for Prime.
Mindshare said that Kogan.com has enjoyed stronger web traffic since Amazon launched.
“From a consumer perspective, free and fast delivery is what people are looking for from a service like Prime and they’re actually willing to pay for it,” he said.
Amazon launched Prime on Tuesday, offering benefits such as free two-business-day delivery on eligible products and access to videos, e-books and gaming for $6.99 a month or $59 a year. Mindshare research suggested consumers would be willing to pay about $14 a month.