Trouble for local retailers as Amazon launches EOFY sale

Amazon clearanceAmazon Australia has dived head first into end-of-financial-year sales, slashing prices on thousands of products in a move that could spell trouble for traditional retailers struggling to clear slow moving stock.

Amazon Australia said on Tuesday that it would be taking 50 per cent off a wide range of fashion, shoes accessories products, while offering special deals on its private label range, Amazon Basics.

It comes less than a week after Australia’s major department stores Myer and David Jones launched their own clearance sales, embarking on a scramble to clear winter stock after a warm start to the cold season in April.

More than 60 million products have been placed on Amazon’s Australian marketplace since it launched locally last December, positioning it to compete with traditional retailers on popular brands like Calvin Klein, De Longhi, Tefal, Asus and Philips.

“With thousands of great deals available this month to mark the end of financial year, we are offering customers in Australia great value and a convenient way to shop,” said Rocco Braeuniger, country manager of Amazon Australia.

“[We] are committed to continue growing the selection available to Australian customers.”

All new customers will receive $20 off their first order of over $79 until 1 July under Amazon’s promotion, on eligible items.

50 per cent has been swiped off select fashion lines, including Calvin Klein t-shirts and underwear, Novo high heels and Lacoste hats.

Hundreds of home and kitchen products have also been discounted, with up to 30 per cent of select lines, including Circulon cookware and Nespresso coffee machines.

Myer and David Jones have slashed 70 per cent off Circulon cookware, while in apparel Myer is offering up to 40 per cent off Bonds, Piper, Reserve and its own Blaq brands.

David Jones has taken 30 – 50 per cent off a wide range of its fashion products, including brands like Camilla and Marc, Rachel Gilbert and Tigerlily.

In beauty appliances Amazon has taken up to 30 per cent off Philips hairdryers and straighteners.

The sales signal yet another step up in competitive intensity in the Australian retail market and come at a particularly difficult time for Myer and DJs.

Both businesses are trying desperately to clear winter stock to minimise the profit impact of an unseasonable start to winter, but competition from Amazon threatens to either crimp their sales or push margins down even further.

ABS figures released on Tuesday revealed that department store spending declined 0.9 per cent in April, while spending in the clothing, footwear and accessories category was down 0.8 per cent.

Appliance retailers like Harvey Norman and JB Hi-Fi haven’t escaped Amazon’s promotional gaze either, with up to 20 per cent taken from the price tags of select electronics products such as Acer and Asus laptops.

Queensland University of Technology associate professor Gary Mortimer said Amazon’s decision to get promotional in June showed that the giant had firmed up its understanding of the local market.

“Amazon is a very smart retailer – they understand that Australian consumers are about to move into a significant period of spending,” he said.

But Mortimer believes the electronics retailers will be more exposed to the sales than the traditional department stores, as the bulk of shoppers are still going in-store for their EOFY splurge.

“There will be some good deals on Amazon, but the proportion of people that will choose to shop online will be smaller than those who go into stores,” Mortimer said.

Attracting new customers in June could bolster Amazon’s local database ahead of the launch of its Prime loyalty program here later this year, poising it to have a larger impact on the local market in the second-half of calendar 2018.

It will also benefit from a massive increase in the range of its local offer after begins redirecting customers to from 1 July, setting up a new international platform for overseas items.


More to come.

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.