Ready or not: New research spells doom for Australian retail
Recent research from Mastercard shows that Australia's online shopping habits, in addition to the arrival of Amazon, creates the perfect storm that could change retail as we know it.
The retail industry is currently dealing the with shockwaves from the announcement that Toys'R'Us has filed for bankruptcy, and so begins the analysis as to where it all went wrong.
In the last few months, Australian retail has taken quite a few blows. Brands like Marcs, David Lawrence and TopShop Australia all went into voluntary administration, with fashion retailer Surfstitch being the latest victim. In addition, Myer is struggling with sluggish consumer spending, recently confirming a fall in both sales and profit. The department store has now confirmed that it will soon close more of its bricks-and-mortar stores.
Amazon's looming arrival in Australia - which could come as early as October 2017 - could prove more challenging for Australian retailers given the findings from Mastercard's Mobile Shopping and Online Security research.
According to the research, Amazon already has a download rate of 8.6% in Australia, and this is before the official arrival date has even been confirmed.
This presents a grim picture given that the top three most popular shopping apps downloaded are eBay, Wish and Coles, with penetration rates of just 30.7%, 15.3% and 11.7% respectively. It's ominous to know that Amazon has nearly the same download rate as an established brand such as Coles.
In addition, Australia's most popular online purchases are clothing and fashion accessories (27.3%), toys and gifts (16.7%) and books, CDs and DVDs (16.2%). These are some of the key areas that Amazon is currently dominating in other markets. Amazon's arrival could sweep up customers in these categories, and this spells bad news for many toys and books retailers like Big W, Kmart and Myer.
After all, look at what's just happened to Toys'R'Us.