What Aussie retailers should learn from Amazon

AMAZON just announced a 23 per cent spike in sales as it prepares to launch Down Under and “destroy” local retailers.

Shoppers roam through an Amazon Go store in the United States. Picture: Elaine Thompson

AMAZON has moved to distance itself from insider comments about the global giant’s plans to “destroy” Australian retail.

And the man behind the controversy has spoken out about what local retails should learn from the e-commerce company, which today announced its quarterly sales were up 22.6 per cent to $US35.7 billion.

The notoriously secretive company has issued a rare statement seeking to smooth over its corporate image, addressing for the first time the widely quoted comments by a former consultant on its Australian rollout, who warned: “We are going to destroy the retail environment in Australia’.”

Amazon, set to launch Down Under in September, said in a statement to news.com.au that this did not reflect its views, emphasising: “Our focus is on providing the best shopping experience we can for customers all over Australia”.

“The person who made this statement, Brittain Ladd, left Amazon in February after just two years,” the statement said.

“He was never involved in our planning for Australia and has no actual knowledge of our plans.”

THE GREAT DISRUPTER

Amazon is expected to have a dramatic impact on the local retail industry when it brings popular US services like Amazon Fresh delivery and Amazon Go grocery stories to this country — along with fast delivery on goods priced 30 per cent lower than traditional retailers.

Mr Ladd confirmed to news.com.au that he made the controversial comment, which was reported second hand by Fairfax Media after a prominent fund manager repeated it, attributing the line to “the guy rolling out Amazon’s business here in Australia”.

He said his role in Australia was to advise the team tasked with rolling out Amazon’s services locally, but that he had no decision-making responsibility — and had never represented himself as being in charge of the project.

“I have used the words ‘destroy’ and ‘disrupt’ interchangeably since I began writing and speaking about Amazon’s eventual entry into Australia seven years ago,” Mr Ladd said.

But he said he did not mean these terms negatively, saying the company would “introduce a whole new world of retail and services” to a nation where “entrenched and in some cases duopolistic market conditions that have been detrimental to consumers and suppliers”.

“Far too many executives at retailers in Australia, as well as analysts, have tried to make it sound as if Amazon operates unfairly,” he continued.

“This is 100 per cent false. Amazon is obsessed with providing customers with excellent service and choice, and the only way it will be successful in Australia is if local consumers are satisfied with the service and value they receive.”

A ‘LESSON’ FOR RETAILERS

He said Amazon’s billionaire chief executive Jeff Bezos “never talks about destroying anybody, he always says the same thing: ‘just focus on customers’.”

And he had some words of advice for naysayers like Harvey Norman founder Gerry Harvey, who has criticised the e-commerce giant while vowing to fight back by matching its prices.

“Instead of preparing for Amazon, retailers should have been taking lessons from Jeff Bezos regarding how to obsess over customers and provide customers with service and value,” Mr Ladd said.

He said local retailers should be poaching talent from Amazon instead of creating internal response teams “consisting of individuals with no Amazon experience and minimal e-commerce experience”.

And, he said, “instead of maintaining the same business models year after year, companies in Australia should have put a premium on innovation.”

[e-mail]