Amazon prepares for shopping war
BRACE for a new online shopping battle, with insiders claiming tech giant Amazon is preparing an "aggressive" retail push in Australia this year and will undercut competitors on its most popular products.
The news comes just weeks before the company is set to host a meeting of third-party sellers to explain its supercharged Australian strategy, and arrives in the lead up to its annual sale, Prime Day, criticised last year for its lack of genuine bargains.
Retail experts say the move could deliver "very large specials" for consumers - potentially below products' actual costs - but also had the potential to put unprepared local retailers out of business.
To launch its new retail assault, Amazon Australia is understood to have approached many existing third-party sellers and requested they name products to sell to the global company at wholesale prices.
One Australian seller, who spoke to News Corp anonymously, said the proposal came as a surprise to traders who had been listing goods on the website under their own brands for 15 months.
"Out of nowhere, they want to buy things off us as if they were a retailer," he said. "Amazon just gave me an empty spreadsheet and said 'put anything and everything you want to sell to us on there'.
"They're trying to get as many offers as possible. It will let them be a lot more aggressive."
Amazon Australia also told third-party sellers it would hold a meeting in April to discuss the new strategy.
Gartner global retail principal research analyst Thomas O'Connor said the move appeared to be part of a massive cost-cutting strategy, and by buying goods to sell to customers directly, Amazon could issue the most aggressive price discounts.
"Amazon seems like it's planning to deliver some very large specials to sustain attention," he said. "This sounds like it's built towards Prime Day (in August) and they're thinking about what big discounts to go after."
Amazon was also well known for cutting prices below their own costs, Mr O'Connor said, and taking a loss on popular items to ensure their competitors could not beat them.
"In the US, it's not uncommon for products to have no price listed on the Amazon website because they're below the brand's recommended retail price," he said. "You have to click on these products and, in some cases, put them in your shopping basket to see what the price really is."
Mr O'Connor said the company would "leverage its data" to identify the website's most popular items, and potentially discount them as door-busting specials.
The company's move comes after the retail giant pledged to hire 500 permanent staff over the next 12 months, and opened its second Australian warehouse, in Sydney, last year.
Australian Retailers Association executive director Russell Zimmerman said Amazon's fresh effort to woo local shoppers shouldn't come as surprise to its rivals after it suffered a disappointing beginning.
"They've had a fairly soft launch and I think we're now going to see concerted efforts to make themselves felt in the market," he said. "Australian retailers have been on notice for a long time."
Mr O'Connor said Australian stores would need to carefully consider their online sales strategies, and prepare to discount prices to counter Amazon's push.
"This (move) doesn't mean Australian retailers can't be successful, but Amazon is driving a lot of disruption," he said.
Amazon Australia declined to comment on the reports.