Australia, insurance, car, home, live, holidays

Amazon Australia country manager Janet Menzies at the new robotics fulfilment centre in Sydney.Credit:James Brickwood

“More than half of our subscribers have two or more subscriptions and the products with the most subscriptions include everyday essentials such as toilet paper,tissues,beverages,baby wipes and nappies,” she said. “They’re thinking about Amazon as a home retailer.”

Amazon Australia’s growth comes as the retail sector grapples with changing consumer behaviour,with shoppersmodifying their spending habits,seeking out the best bang for their buck in the most convenient way possible.

Retail analysts are warning that the consumer spending outlook has deteriorated,with a potentially significant slowdown in the 2024 financial year across a range of discretionary retailers.

Investment bank UBS has downgraded several of the country’s largest retail stocks this week,putting “sell” ratings on Rebel operator Super Retail Group,Peter Alexander owner Premier Investments and footwear retailer Accent Group.

“Looking forward,the consumer is reducing spending in aggregate and when they do spend they are trading down by price point in apparel and general merchandise,” the broker warned.

Amazon’s focus in Australia goes beyond essential spending. The company remains optimistic about luring in local shoppers with bargains when it comes to discretionary purchases.

The group’s flagship sales event,Prime Day,starts on July 11 and Menzies is confident there will be strong interest in coffee machines,TVs and video game consoles. The event is also a driver for the group’s membership model,Prime,given the offers are targeted at Prime members.

Amazon does not disclose the number of Prime members,but retail analysts have flagged the growth of the program as amajor competitive advantage for the company over local retail giants. The price of Prime has recently increased from $6.99 to $9.99 per month.

The major supermarkets and everyday retailers have also been developing their own delivery subscription models over the past two years. Kmart and Bunnings owner Wesfarmers is doubling down ongrowing its membership program,OnePass, which offers free delivery on a range of its brands and the option to bundle in a Disney+ subscription for one monthly fee.

With rising cost of living pressures spurring Australian shoppers to seek out the best value,retail analysts said Amazon had cemented its position as a key platform for bargain hunting.

“Amazon is increasingly the first point of call[for researching products],” Jarden analysts said last month. Most at risk remain the office,electronics,fashion,house and garden,and recreation categories,they added.

The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.

License this article