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Work smarter, work harder: Amazon is coming

  • News
  • September 1, 2017
  • Sarah Dunn
Work smarter, work harder: Amazon is coming

Everybody wants to talk about Amazon’s arrival into Australia. The online mega-retailer confirmed its launch into Australia in April, and has been preparing to send its operation live ever since. The million-dollar question is, will it cross the Tasman? And how will it affect Kiwi retailers?

On the second day of New Zealand Fashion Week, retailers gathered at the GridAkl coworking space in Auckland’s Wynyard Quarter to discuss the threat posed to Kiwi apparel companies by Amazon at SaaS company Cin7’s retail breakfast ‘Amazon down under: Interpreting opportunity, managing risk.’

“Amazon is probably the most talked-about subject everyone’s seen in many, many years,” says keynote speaker Chris Wilkinson of First Retail Group. “It’s a game-changer.”

Quoting an unnamed client from a large Australian firm, Wilkinson told the crowd that retail has changed more in the past decade than the last century. Shoppers are now empowered and purposeful, and they’re no longer limited by geography to local retailers.

It was once considered unlikely that consumers would buy beds, thousand-dollar diamond jewellery and other bulky or expensive items online, says Wilkinson, but that’s just what is happening now.

“All those things that we, as retailers three or four years ago, thought would never happen are happening, and they’re happening at an accelerated rate.”

New Zealand’s online sales have an attrition rate of 41 percent, one of the highest rates in the developed world.

“Our overseas retailers are really getting a jump on us,” says Wilkinson.

Part of the reason Kiwi retailers are failing to capture customers’ attention online is that they’re not taking online seriously enough. According to Deloitte’s ‘The Digital Divide’ report, digital influence inspires and drives decisions in more than 70 percent of all transactions, up from less than 20 percent in 2012.

“Retailers need to be working smarter, they need to be hungrier,” Wilkinson says. “We need to be working harder to be part of the consumer’s consideration set and that doesn’t necessarily mean price.”

In 2016, Wesfarmers group managing director Richard Goyder said Amazon would "eat all our breakfasts, lunches and dinners. Wilkinson shared the quote to indicate what lies ahead for New Zealand retail, saying it will have a “huge impact” on large retailers selling commodity products.

In the US, Amazon has had a serious effect on the diversity of the retail industry. Sixty-five million Americans are members of Amazon’s paid Amazon Prime scheme – that’s 44 percent of households. Founder Jeff Bezos has been quoted as saying he wants to make it “irresponsible” to not be a member.

“Amazon’s here to stay,” says Wilkinson. “They’re going to become a key part of peoples’ lives.

“They’re looking at how they can work themselves into New Zealanders’ DNA.”

To ride the wave of Amazon’s arrival, Wilkinson says retailers must “get amongst” Amazon’s marketplace, which means starting to adapt and align their businesses right now. Most important is “re-prioritising ecommerce”, he says, but changing stores so the experience goes beyond the transactional to inspire discovery and delight will also be key to survival.

Cin7 founder and chief architect Danny Ing says efficient supply chains which enable fast order fulfillment will help Kiwi retailers be competitive against Amazon. He says Bezos didn’t find success with products, but by mastering the supply chain.

Automation and integration will become even more important as retailers establish their Amazon sales channel, Ing says.

Wilkinson’s recommendations for priority actions are:

  • Get an Amazon marketplace account set up so that you can understand and master its system.
  • Interpret where your competitive advantage may lie. For some New Zealand retailers, Amazon marketplace will open up their markets much, much wider.
  • Enhance your digital content and capability so your offer is differentiated and gains priority.
  • Find your fit with a local or category-specific marketplace, like the new Hamilton Central website.
  • Leverage collective strength by joining your local business association or similar.
  • Focus on the vitals. Create and demonstrate differentiation with unique products and high-quality customer service.

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Sale squared: Onceit talks deep discounts and sale events

  • News
  • November 20, 2017
  • Sarah Dunn
Sale squared: Onceit talks deep discounts and sale events

Kiwi high-end clearance ecommerce store Onceit works with more than 400 suppliers from New Zealand’s fashion, beauty and homewares industries to offload excess stock without brand damage. We had a chat with executive director Jay Goodey ahead of its once-yearly sale of sales.

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Enhancing the experience: Hospitality New Zealand

  • News
  • November 17, 2017
  • Courtney Devereux
Enhancing the experience: Hospitality New Zealand

Some commentators think food and integrated hospitality offerings will save brick and mortar retail from obsolescence in the age of ecommerce. But does catering to the consumer’s every need result in sales, or are shoppers moving on without making a purchase? In the Enhancing the experience series Courtney Devereux hears from Vicki Lee of Hospitality New Zealand about why these two different sectors are working together.

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What’s next for Auckland’s City Centre: a Q&A with designer Ludo-Campbell Reid

  • News
  • November 16, 2017
  • Elly Strang
What’s next for Auckland’s City Centre: a Q&A with designer Ludo-Campbell Reid

Auckland Council recently released a video detailing how far it’s come with the urban design of the City Centre over the last 10 to 15 years, as well as its vision for the years to come. Elly Strang talks with Ludo Campbell-Reid about the pace at which his vision is coming to fruition, the most impactful changes already made to the City Centre and goals for the future.

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Owner / Retailer: Suzie Johnson

  • News
  • November 16, 2017
  • Sarah Dunn
Owner / Retailer: Suzie Johnson

Oosh is a regional retail empire that’s built on empowering rural women. Founder Suzie Johnson chose the name after ‘Oosh’ was tagged into the side of her first store in Shannon, which she opened after putting her husband through university selling jewellery and paintings at markets.

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