Last week, the Reserve Bank of Australia (RBA) began rolling out the new $10 note into the Australian economy, equipped with a raft of security measures to safeguard against counterfeiting.
Just like with new $5 note introduced 12 months ago, the flashy new note features a clear window from top-to-bottom, complex holograms and parts that are only visible when exposed to UV light.
The NRA supports in principle any effort made to combat the threat of counterfeiting and we believe retailers all over the country will now face a reduced likelihood of being ripped off with fake cash. As you are all aware, there is currently no recourse for retailers who are victims of fraudulent money. Hence, any short-term costs related to upgrading machines to be compatible with the new notes should be seen as money well spent if it prevents your business from falling victim to counterfeiting.
The retail industry is roughly six weeks away from the busiest time of the year – the Christmas trade period – and retail giant Amazon looks set to launch in Australia smack bang in the middle of the festive season.
It is mooted that Amazon will be looking to open a distribution centre in Ipswich around mid-November, in a bid to cash in on Christmas sales. Located West of Brisbane, Ipswich would provide an ideal location to service both Brisbane and the Gold Coast, ensuring that South-East Queensland is easily covered.
There is no denying that Amazon will provide stiff competition to already established retail firms, however, the view of the NRA since Amazon announced their intention to land in Australia is that it will not spell the end of Australian retail.
Like all industries, retail throughout its history has been forced to adapt, innovate and evolve in order to keep pace with new technologies and changing consumer behaviours. Amazon’s arrival will no doubt trigger bricks and mortar retailers to rethink how they do business, but that should not be seen as necessarily a bad thing. Increased competition, which also forces other industry players to re-evaluate their business model, has the real potential to benefit both consumers and those individual businesses.
It’s also worth remembering that Australia has higher wage costs, higher operating costs and transportation is more expensive than places like the United States where Amazon has dominated. With the vast majority of the Australian population flanked on the coastlines, our country does not have the same level of infrastructure to support the speed and turnaround that Amazon has been able to deliver in the US.
Add in that while online spending has grown enormously in recent years, it still only accounts for less than eight percent of retail sales. Australians still – and most probably always will – like the idea of physically visiting a store where they interact with a salesperson, rather than sitting behind a computer screen.
With the emergence of the digital economy, the arrival of an online behemoth such as Amazon was inevitable. Rather than resist change, the retail sector should view it as an opportunity to innovate with a view to not just surviving, but thriving.
Have a great week.
Dominique Lamb, CEO.