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Retail in Australia

Retail in Australia

Retail in Australia (and everywhere else) is facing it’s most challenging year, ever… the question is: what are we going to do?

I recently read a piece written by Scott Galloway about the rise of the US big four, namely: Amazon, Apple, Google and Facebook. The article made me consider the impact on Australian businesses and the challenges that we face when it comes to managing costs associated with finding and keeping customers (not to mention managing operational expenses). It also makes me think… in this global economy, what influence does any small (or even larger) business have to combat the increased power?

Amazon is the 4th largest retailer in the U.S. (Walmart is the largest), however, 44% of all U.S. online retail transaction happens via Amazon! In the first month of operation in Australia, there were 3 million visitors to Amazon Australia which represents just under 8% of the population — not bad for the first month of operation.

As it busily collects cash from Australians to ship it offshore… if we look at the U.S. experience since 2008 Amazon has paid $1.4 billion in U.S. corporate taxes compared to Walmart which has paid $64 billion in the same period. Now whilst I am not an international tax expert, it does appear that it is not a level playing field.

Here are some other areas to consider:

Just imagine the incredible amount of data that is not only being gathered, but AI analysed and used. Basically, from every consumer touch point, Amazon is building a profile with millions of data points on every single consumer — Google, Facebook and Apple do the same. And now… thanks to Quantum Computing the ability to process data has become lightning fast, as we learned from Michelle Simmons who was named 2018 Australian of the Year.

Where to from here for Australian retailers?

All of this might sound a bit daunting, almost overwhelming. But in my opinion, there is still great business opportunities ahead for Australian retailers online.

From where I sit… RedBalloon, Wrapped and our other businesses in the Big Red Group have just traversed through their busiest season and as the race for customers, mindshare and growth continues, we were pleased to see that we achieved material YOY growth.

Below are the questions we asked ourselves:

  1. What job do people hire our product/service to do? We had a clear, single-minded proposition.
  2. What role do we play in people’s lives? We lived the customer journey… at every point, over and over (and radically shifted our approach to the fundamentals of customer contact points)
  3. Are we unique or special? What is our niche? Focus was our priority (we said ‘no’ to a lot).
  4. What can we be world famous for? Something we can execute meticulously.
  5. What does success look like? We were clear on the Big Hairy Audacious Goal…
  6. And we made sure we know where and how our customers are interacting with us.

You may find some value in the above to apply to your own business.

Another thing we’ve watched has been a consistent move from desktop to mobile, with the shift continuing year on year. If we consider the eCommerce experience in China, with 500 million people buying online on their mobile, without ever having used a desktop machine before, plus the millennial cohort who spend most of their time with their phone in their hands, it came time for us to enhance the customer experience on a small screen — hence, a dynamic website experience on RedBalloon, and whether you are on mobile, tablet or desktop.

Final thoughts…

Amazon generated $177.9 billion in 2017 revenue and its net income grew 27.8% and I’m very pleased to say that the BRG have had double-digit growth in its first six months — however, it is taking a relentless reinvention of the customer journey.

There has never been a more challenging time in Australian retail, but there has also never been a more exciting time. But one cannot assume that simply because we build state of the art customer touch points, that the customers will come. We need to know, more than ever before, about each individual customer…

In my next post I will share more about what we are doing to find and woo customers in new markets.

Also published on Medium.

Reader Interactions


  1. Great read,
    That last point about moving from desktop to mobile is so true.
    Almost 80% of total searches through Google are happening on Mobile (capital M on purpose)
    I’ve seen a huge jump in activity after focusing on mobile for my customers

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