The impact of Amazon on Australia

Much has been made of how Amazon will affect the retailsector in Australia. Both consumers and businesses predict it will have ongoingconsequences, with consumers set to enjoy more competitive prices, whileestablished retail giants are predicting the end of the sector as we know it. However,Amazon is an enormous company, with tentacles reaching into dozens of countriesaround the world, so it is not just JB HiFi and Gerry Harvey in for a shake-up.

The jobmarket

Much has been said about Amazon killing jobs in Australia, butthis isn’t true elsewhere in the world. In fact, Amazon employs more than halfa million people around the globe. In the last year alone, Amazon has boostedits workforce by more than 250,000. In the US, Amazon has 70 fulfillmentcentres, employing 90,000 people. Currently in Australia they have just onecentre, with plans to create more, opening the doors for hundreds, possiblythousands, of people to find work around the country. This doesn’t even accountfor the required corporate structures, such as customer service and businessdevelopment, which will again create new opportunities.

The real test for the job market will be how well the largeretailers adapt to a new competitor. Employee cutbacks are more likely an indicatorof a business’s failure to evolve and face the new challenge, rather than anyfault of Amazon. That’s not to say Amazon is an angel, but as it stands theyare a company bringing in new opportunities and it is up to the rest of thesector to be competitive. Any job losses sustained by JB HiFi, Harvey Normanand the other big box retailers, will be the result of the sector’s stagnationand the big hitters’ complacency when it comes to their customers.

Shippinginfrastructure

In the US, eCommerce is a $360 billion industry, with Amazona major player in driving its success and accounting for almost a third of thatfigure. Online shopping is big business in Australia too, with approximately$30 billion in sales across the industry, however it is Dan Murphy’s, not oneof the eTailers, taking the biggest share. Why is this? A major factor is thatDan Murphy’s do their own deliveries.

With Amazon hitting these shores, it will soon discover theproblem that holds back eCommerce in this country – Australia Post. Everyonehas at some point encountered the unreliable mess that is the national postalcarrier and social media is a constant stream of negative publicity for them.In the US, Amazon has driven growth across the logistics industry, with demandpushing carriers to get bigger and better. Subsequently, in a country largerthan Australia, Amazon is able to guarantee expedited delivery to the furthestreaches of the United States.

For Australians, this would mean the destruction of thestatus quo. Once Amazon identifies the least reliable parts of its deliverychain, there will be a paradigm shift in parcel delivery in Australia.Australia Post should be more worried than any business in the country.

Theenvironment

Unfortunately, it isn’t all good news for the Australianconsumer. All those deliveries, from the smallest lipstick to the biggest flatscreen tv, are packed like they’re being sent to the moon and back. Acres ofbubble wrap, forests of cardboard boxes, and litre after litre of fuel. Theimpact of the retail obsession is felt most keenly by the environment, withplastic waste being found in everything from the food we eat and the stomachsof wildlife, to the floating disaster in the middle of the Pacific Ocean. IfAmazon wants to be a true pioneer, not just another opportunisticmulti-national, it will need to devise a plan for environmental sustainabilityto complement the other revolutions it is set to begin.