A senior executive from Intel has warned Australian retailers to remain concerned about Amazon, referring to its forthcoming ‘Prime’ service as a “critical competitive weapon”.
Amazon Prime is tipped to launch in Australia sometime this year. The service incurs an annual membership fee of US$99, and includes access to its video and music library, plus discounts on its main shopping site.
Jon Stine, Intel’s Global Director of Retail Sales states that Amazon is driving a quickened pace of retail innovation, and could quickly become the “de facto first stop for shoppers”.
Stine states that Amazon’s launch in December is just an “elementary” offer compared to the forthcoming impact of Amazon Prime.
Speaking to key Australian retail leaders – such as Bunnings and Dan Murphy’s – at an event in New York Mr Stine affirmed:
“Every retailer should be worried about Amazon and Amazon Prime, because it is a brilliant competitive platform”
“There is the tremendous affinity that Amazon Prime creates in a shopper because of the all the services [it] delivers or provides, the ease of payment, the proactive set of services and the breadth of services from music to tickets to commerce and the like”
“It just makes it so easy to work through Amazon for all kinds of things. [It is] friction-free and they make it very easy and they think for you: would you like this, would you like that, you bought this in the past. So a just extremely brilliant service is what it is”.
According to a recent Consumer Intelligence Research Partners report, three out of four American households are Amazon Prime members.
Stein states that consumer standards will shift as Amazon & Amazon Prime grow in stature locally:
“Those services, payment services, services of (customer) recommendation, services of other things you can get and buy — that becomes a critical competitive weapon”.
“The most important thing is to understand that it is not just product. The relationship with the shopper is about the four Ps (price, product, promotion, and place), but it is also the services that a retailer provides and are increasingly as important as the product and the price”.
Despite the impending influence of Amazon, Stein maintains that it will not herald a “retail Armageddon”:
“Amazon’s impact is substantial in the capabilities (it) offers, it is substantial in the loyalty and the affinity Amazon has engendered in shoppers. It has become a de facto first stop for shoppers when they are beginning their shopping journeys”
“Stores are closing, skies are falling? — nonsense. This is not an era where people are not shopping; they are shopping but in different ways and different places”
“It is not retail Armageddon. Shoppers continue to shop. Is retail going away? Heavens no”.
