Amazon has launched in Australia
Amazon has launched in Australia

‘A very bad sign’ for Amazon

A GOOD Christmas is crucial for retailers. And a bad one is a very bad sign. Australia's big retailers won't report their results until late February, but there are early clues as to which retailers won Christmas.

US online retailer Amazon looks like it got a lump of coal on the big day. Australian shoppers seem to have decided it was naughty, not nice, and mostly gave it a miss.

Before we find out the real numbers, we can get a rough sense of which retailers are going well from Google.

The company compiles a service called Google Trends, which tracks what people are searching for. It's a remarkable little application, providing data back to 2004.

Of course, it isn't a perfect guide to retail sales, by any stretch. Many people will navigate straight to online retailers, and it tells us nothing about conversion of potential customers to real ones. But for comparing the interest in one topic over time, it usefully reveals peaks and troughs.

It shows Australian interest in Amazon hit a trough after launch day. There was a big peak of interest in its "soft launch", another big peak of interest when it actually launched, and after that, Australians soured on it, with a slow slide backwards to levels scarcely higher than before it launched.

Australians clearly weren’t thinking much about Amazon before Christmas. Data: Google Trends
Australians clearly weren’t thinking much about Amazon before Christmas. Data: Google Trends

 

The company's Boxing Day sale caused only a minor bump in search interest. I checked it out and the only amazingly cheap thing I found was $8 CDs. Unfortunately, I haven't used a CD for several years.

I feel let down because I was ready to be an Amazon early adopter and devotee. I buy a lot online already and I had heard big things about Amazon's range, prices and delivery.

But since its launch, it has been a continual source of disappointment. Browsing for electronics, household goods and clothing, I have found nothing that looked like a good deal for me. I stayed positive though, and in early January, when my beloved was searching online for a new pair of running shoes, I suggested she check Amazon. The shoes she wanted - a popular line from a major manufacturer - weren't available for Australian shipping. Instead she found them half price at Rebel Sport's website and they were delivered promptly to our house.

Amazon seems to have wasted a lot of the goodwill it had at launch. If people aren't having a positive experience, they won't return to browse later.

 

Amazon’s execs would be cringing at tweets like this.
Amazon’s execs would be cringing at tweets like this.

 

Amazon insists it is happy with customer traffic, which it describes as "hundreds of thousands of visits … each day".

In response to my inquiry about Christmas sales, Amazon harked back to its strong launch, which it said had more orders than any other launch day in Amazon history.

"From early in the day, we experienced visitor numbers that far exceeded our expectations," said Amazon Australia country manager Rocco Braeuniger.

I don't doubt that's true. The Google trends data shows how excited Australians were on the launch day. The data also suggest it might be a while until they get so many orders in one day again.

BEZOS ISN'T PLAYING

Amazon's founder and chief executive Jeff Bezos is now reported to be richer than Bill Gates ever was. Amazon's share price is now over $1250, having more than doubled in just the last two years.

That sort of thing is not caused by serving up insipid service and a terrible range. Amazon wins in America because it is amazing there. So we can expect Amazon to continue to improve. For now it has just one Australian warehouse and it hasn't even rolled out Amazon Prime, which offers free delivery and access to TV and music streaming.

The service will continue to get better and its performance at Christmas 2022 might be a better guide to whether it will eventually dominate Australia than its performance at Christmas 2017.

WHO DID WIN CHRISTMAS?

Looking at Google Trends, Bunnings dominated Australia's search interest over summer. Coles had blips on Christmas Eve and New Year's Eve. Even Myer had a win on Boxing Day, but for sheer consistent performance, the big green giant takes the prize.

Looks like Australians have been much more into home improvements than the Christmas sales in recent months.
Looks like Australians have been much more into home improvements than the Christmas sales in recent months.

 

Bunnings has been the star of the Australian retail scene for a long time now and it looks set to continue. Perhaps change will come, but it will take a few Christmases of hard slog from Amazon to make it happen.


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