What Retailers Can Learn from Canada – and Expect from Amazon

Corporate Finance & Restructuring | Inside Retail Weekly (Reprint)

November 3, 2017

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It is no secret that Amazon is coming to Australia. Australian retailers should not underestimate the scale of the disruption ahead but they are also in the fortunate position of being able to learn from overseas experiences.

To date, so much of the analysis has focused on the retail destruction that swept America in recent years. However, Australia’s experience is more likely to follow Canada, than the US.

There are many parallels between Australia and Canada.

  • Our populations are similar in size (Australia 24 million, Canada 36 million)
  • Our land mass is comparable (Australia 7.69 million km2, Canada 9.98 million km2)
  • Both countries have vast, sparsely populated regions that present fulfilment challenges
  • Our retail space per person is reasonably aligned (Australia 11.1 square feet, Canada 16.4 square feet, US 23.5 square feet: Credit Morningstar)
  • For years, retailers in both of our countries treated ecommerce like an afterthought
  • Both countries have high internet penetration (Australia 80%, Canada 89%)
  • In both Australia and Canada, there is substantial room for growth of online retail spend
  • Before entering either country, Amazon already generated revenue from online sales.

Here’s how we see Amazon’s foray into Australia playing out.

Posted with permission from Inside Retail Weekly. Copyright ©2017. All rights reserved.

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