There is a significant amount of worry and wringing of hands in Australian retail at the moment.
Amazon is coming.
Depending on your source, Amazon either believes “your margin is our business” or it will “destroy Australian retail”.
Frightening stuff. Retail is Australia’s second biggest employer. 800,000 Australians work in shopping centres and here comes the company responsible for 60% of US online sales. Amazon is about robots, drones and efficiency. Amazon has no interest in local economies and Australian jobs.
Some people are active. Ruslan Kogan suggests Amazon’s rising tide will lift all boats. Good, optimistic thinking. The problem is that many Australian boats are not seaworthy, and rising sea levels are going to send many of them to the bottom.
Home delivery services in Australia are poor. If you care to start a discussion at the dinner table on the last bad experience people had with home delivery that will take care of conversation for the evening.
Whether it’s missed deliveries, failure to keep to a promised time frame, five-day deliveries to Melbourne and Sydney, drivers not even bothering to knock before leaving a card, or damaged items, the list goes on.
A new service has arrived, usually referred to as Click and Collect. For this online service, the delivery option is “pick this up from your local store”. It’s a clever combination of the ease of ordering online and the inconvenience of having to go into a shopping centre at some stage to pick up your stuff. I have to admit; it is a better idea than parcel lockers in supermarkets.
It should be an edge for local retailers over Amazon. The stock has already been distributed Australia-wide to the closest point to the buyer. If a retailer has 200 stores, then they have 200 Distribution Centres within their existing footprint and thousands of staff ready to pick and pack.
The only way Amazon could compete would be if the Click and Collect service were a failure.
I’ve been testing Click and Collect over the last few months to understand the operational requirements of Passel better. And retailers have managed to muck Click and Collect up.
Here’s how the service should work:
1) Order Online.
2) Await “Order Ready Confirmation” within 15-20 minutes.
3) Go to the store, show the original order email or confirmation and some ID.
4) Take item home.
Magic. What an excellent service.
Here is a summary of the many ways in which Australian retailers are managing to screw Click and Collect up:
- Items are not in stock, even though the website said they were.
- Your order has to be cleared by a security team. Security clearance will take at least 24 hours.
- Thanks for asking about the status of your security clearance. We will message you back in 24 hours.
- The Click and Collect counter is closed.
- Okay, you have your item, but now we need to queue up behind the people who are buying things in store before you can leave.
- Your order placed at 13:25 on Monday was has not picked from the shelf in the store and confirmed until 10:28 on Tuesday.
Retailers need to value online shoppers exactly as if they were in-store purchasers. Customers, regardless of where they are, why they buy, or how they purchase are critical to the success of retail.
Australian brick and mortar retailers have a significant existing geographical advantage over purely online stores. They have a distributed network of beautifully designed stores that enhance the shopping experience. They have lovely, smart and friendly people working in these stores.
If they get their online and Click and Collect models right, then the best form of defence against Amazon will be a strong offence that leverages these key advantages.
I’d prefer not to speculate what will happen if they get it wrong.