Amazon talked about its Australian launch as being the “most successful international launch ever”, but reaction from consumers was muted.
Many people were left feeling disappointed by the product selection and the initial impact on Australian retail was limited.
But six months on, the online retailer is gaining momentum with Australian consumers.
Starcom research shows Amazon narrowing the Expectation Gap on key pillars: Pricing, Product and Delivery. As well as providing more Inspiration & Excitement. Our Return on Experience work shows this emotion is critical to creating very positive experiences that drive brand growth.
We believe Amazon Prime will be the true accelerant to growth for Amazon in Australia, because it is one of the most exciting things about Amazon.
Prime members spend more, shop more frequently and have a closer emotional connection to Amazon. They are at the forefront of Voice Commerce, with Echo Dot being the biggest selling item on Prime Day in 2017. The opportunity here is vast with voice shopping predicted to grow from $2 billion to $40 billion+ by 2022
We know that Australians are interested in Prime, Starcom research shows that 52% of Amazon.com.au site visitors are likely to join.
The critical question is … How quickly will Australians buy into Amazon Prime membership?
To explore this, we built a robust model designed to uncover the driving forces behind Amazon Prime’s growth in the U.K. You can download our full article for the technical details.
Our model showed the key drivers of interest in Prime are:
- Promotional and Seasonal Events: Prime Day, Black Friday and Christmas
- New Content Inclusions: Prime Photo, Prime Music
- Information provided on Amazon’s website
We were surprised to see that membership pricing and advertising specifically about Prime were not big drivers of interest.
Based on our model, we believe that take-up of Prime membership will be driven by factors that most excite people about Prime.
While Amazon’s free and fast delivery proposition is core and essential for long term Prime membership, it is the little bursts of excitement, whether from access to amazing deals or favourite photos and music, that inspire people to take action and actually sign up.
Amazon Prime Day, set to take place on July 16th, will be a critical factor in boosting membership numbers in Australia.
Before, during and after Prime Day we’ll be collecting Australian and international market data to build into our model, in order to be able to put a timeline against Amazon impact in Australia.
We’ll be aiming to see whether Amazon Prime can match Netflix and excite Australians enough to reach 30% HH penetration 24 months post-launch … Giving retailers until May 2020 to brace for impact.