Future of ECommerce: Amazon in Australia Case
For years, businesses have always tried to keep an appealing online presence, but now the contrary is happening. Amazon, the giant online book retailer raised eyebrows when it opened the first physical outlet in Seattle, US last year in November (Walsh 2016, p.35). Similarly, the looming news that Amazon has as well acquired an Australian whole foods supermarket for close to $ 18 billion has prompted experts to rethink about the whole issue of electronic commerce (Koehn 2017, p.46). Before this paper goes further to explain too much on why Australians should expect more physical establishments of their favorite online retailers, it would be vital to first note that e-commerce distributors who have been majorly operating online (which also happens that they were purely specialized in a kind of merchandise) are likely to venture into broader kind of wares when they set up brick and mortar establishments.
As much as the trend of e-traders seeking physical space does not totally imply that they down their tools on online platform, it denotes that they might be as well multitasking the two market spaces conveniently. Gary Mortimer, a retail expert and don at Queensland University of Technology however, is undisturbed by this move by claiming that it has little or no impact on the existing chain stores that have since then operated in physical establishments (Smart Company, 2015). By taking a keener look at Kogan, the well-known and homegrown television seller venturing into foodstuff retailing and thus extending its services from purely online to physical outlets (which $300 million according to smart Company), we can tell that the online space might not be as lucrative as physical presence.
Along the same line of thought, other online retail giants like Harvey Norman, JB HiFi and Super Retail Group have expressed their interests in plying both online and physical marketspace (Taylor 2017, p.31). While it was earlier perceived that e-commerce was an ideal mode of operation due to low running costs and convenience in supply, Brian walker, a consultancy from Retail Doctor Group, in an attempt to justify the reverse trend, describes the Australian e-commerce as a “weakened consumer” (Taylor, 2015). He adds that this might be due to several reasons, including what he highlights as a tradition of people shopping in departmental stores and supermarkets. As well, impulsive buying in chain stores in unavoidable. However, he maintains that as much as the trend is likely to keep happening, e-commerce remains profitable in Australian markets, and that the move by some of the biggest retailers is unlikely to change the status quo. However, embracing both the physical stores and online retailing will come with a lot benefits for the companies in the retail industry. This is because, the online platform will be able to serve customers over the long distances whereas the physical stores will serve the nearby customers (Koehn 2017, p.46). The appreciation of the two platforms will give the company a chance to serve a wider market than relying on single platform.