News

23 Jul, 2021
ACCC to probe Ebay, Amazon, Catch and Kogan as they gain market power
SOURCE:
The Age
The Age

Ebay, Amazon, Catch and Kogan are in the ACCC’s cross hairs, with the competition watchdog launching a probe into online marketplaces.

The Australian Competition and Consumer Commission is set to examine concerns around whether the platforms use their dominance and data to squeeze sellers and consumers.

ACCC head Rod Sims said the market power wielded by online marketplaces globally, in particular the dominance of online giant Amazon, had lead to problems in overseas jurisdictions and these problems were just emerging in Australia.

“It’s a huge problem overseas, particularly as these platforms get more powerful,” he said. “It comes with market power.”

While Amazon was “still pretty small in Australia”, Mr Sims said online marketplaces were growing quickly and had boomed in the wake of COVID-19, with Australia’s biggest retail sites used by more than 12 million people every month to shop and sell goods.

Australians spent a record $50.5 billion online in 2020, compared with $27.5 billion in 2018 with online purchases increasing by 57 per cent.

“We want to make sure we’re well ahead of those issues because once they get away from you, they’re very hard to pull back,” Mr Sims said.

The ACCC’s issues paper published on Thursday outlines key areas for investigation by the regulator, including how customer complaints and guarantees are dealt with and whether online platforms are using data to understand which products sell well and why, and then replicating the products themselves in direct competition with smaller merchants on the platforms.

Another potential issue is online platforms telling third party sellers they can’t sell products for a cheaper price off the platform.

“The third party seller and potential pricing issues have become big issues overseas and there has been a lot of focus on those in various places and so that’s why we want to get ahead of those,” Mr Sims said.

Mr Sims pointed to Europe where the European Union has charged Amazon with damaging retail competition, alleging that the US company uses its size, power and data to gain an unfair advantage over smaller merchants that sell on its online platform.

An Amazon spokesman said the company was looking “forward to engaging with the ACCC on these important topics in the coming months”.

A spokeswoman for eBay said the company welcomed the release of the ACCC’s issues paper.

“As Australia’s leading online marketplace, eBay partners - but most importantly does not compete - with the 40,000 Australian small businesses that sell via its platform,” she said.

A spokesman for Kogan declined to comment. Catch was also contacted for comment.

The ACCC’s investigation is part of its digital platforms inquiry and the regulator is calling for submissions by August 19 with a final report to be provided to the Treasurer by March 31, 2022.

23 Jul, 2021
Zip dismisses potential Apple threat as revenue doubles
The Sydney Morning Herald

Zip Co co-founder Peter Gray has dismissed the potential competitive threat posed by Apple, saying the technology giant’s foray into payments has gained no traction in the crucial online retail market.

Mr Gray’s comments came as Zip’s revenue doubled in the June quarter compared with a year earlier, but some analysts found customer growth was softer than expected in the critical US market. Zip’s share price, which is often volatile, dropped 7.8 per cent to $6.99 in afternoon trade.

Competition is a key risk facing buy now, pay later (BNPL) operators such as Zip and Afterpay as banks defend their turf. Last week, share prices in the sector plunged after it was reported Apple would also offer its own BNPL product to iPhone users.

BNPL firms provide short-term interest-free instalment loans, which have surged in popularity as younger consumers shun credit cards.

Mr Gray played down the competitive threat from Apple on Thursday, describing the market reaction to the unconfirmed report as “very strange”. He said PayPal’s entry into BNPL had not affected Zip’s US growth.

He said Apple’s existing payment service did not offer retailers or consumers anything more than a way to pay, whereas BNPL firms argue they provide merchants with customer leads.

“To put it into context, Apple Pay has no penetration at all online. There’s literally just a payment method - there’s no merchant benefit, there’s no consumer ecosystem where benefits are delivered via the app, shopping discounts, etcetera,” Mr Gray told The Sydney Morning Herald and The Age.

“They haven’t even necessarily been hugely successful with the Apple card. So it was kind of interesting in terms of the reaction. I think what it does show is great validation for the space.“

Even so, he did concede Zip would be trying to sell a wider range of financial services aside from BNPL, with more products to be launched over the coming year.

Zip Co, a rival to Afterpay, on Thursday reported an annual 104 per cent jump in revenue across the group to $129.9 million.

Zip’s unaudited numbers said United States revenue surged 280 per cent in annual terms, to $64.3 million for the quarter. Customer numbers in the US, where it will soon re-brand its Quadpay business to Zip, jumped by 144 per cent in the year, but some analysts raised concerns about a slowdown.

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UBS analyst Tom Beadle, who has a “sell” recommendation on Zip, said total transaction volume per customer had dipped from the previous quarter in the US, and that momentum was slower than expected.

Citi analyst Siraj Ahmed, who recommends his clients to “buy” the stock, said transaction volumes were stronger than the market expected, but Zip added slightly fewer US customers than he had forecast. The share price fall may have been because the company did not comment on recent speculation Swedish BNPL firm Klarna had bought a stake in Zip, he said.

Milford Asset Management investment analyst Roland Houghton said it was a strong quarterly update, but one weaker spot was softer customer growth in the US.

“To me, that does not read well for a growth company,” he said.

In Zip’s more established Australian and New Zealand business revenue rose 39 per cent year-on-year to $61.4 million, while customer numbers expanded by a third.

Mr Gray said he did not think the lockdowns in much of Australia would affect its growth, saying the company continued to expand last month despite lockdowns.

The company said global expansion remained a priority, and it had launched in Canada in the quarter and also in Mexico, alongside plans to expand into Europe and the Middle East during the quarter.

23 Jul, 2021
Inside FMCG

Former Australia Post exec, John Cox, is taking up a role at Coles as chief technology officer. Cox was previously AusPost’s executive general manager of transformation and enablement.

Cox is just one of several senior leaders at Australia Post who have departed from the company recently, which The Australian described as “a mass exodus”.

Two of the former employees have left to join former CEO Christine Holgate at Global Express – Michael Oates, former manager of mail services and Holgate’s former assistant, Vicki Ballantyne.

Meanwhile, AusPost’s general manger of customer solutions and partnerships Claire Burke is set to leave the company after almost 10 years and Michelle McNally, general manager of property is returning to her former employer, ISPT Super Property.

Chief risk officer Claire Hamilton is leaving for a similar role.

New Australia Post CEO Paul Graham is set to begin his role in September.

15 Jul, 2021
MyDeal delivers record revenue as customers flock to online shopping
Inside Retail

The increasing trust and use of online shopping by Australians throughout the Covid-19 pandemic has delivered a record year for online marketplace MyDeal, which saw gross sales more than double to $218.1 million and active customers grow 83 per cent.

The increase in gross sales was linked to the increase in active customers, as more Aussies were forced to utilise online shopping, though the business’ private label offering also made a stronger showing in FY21, adding $8.8 million to the business’ gross sales.

“MyDeal has again delivered above industry growth rates… by building on our value proposition of providing superior value to our customers and marketplace sellers,” said MyDeal chief executive Sean Senvirtne.

“We have placed ourselves in an enviable position to harness the increased demand and ongoing transition to e-commerce, with active customers now exceeding 894,000, [signifying] the trust customers have placed in our products, brands and shopping experience.”

And after launching the business’ shopping app in May, MyDeal has seen conversion rates improve further.

As for the business’ full-year earnings, MyDeal hasn’t yet specified they landed – though its half-year earnings were impacted by the cost of its IPO and listing on the ASX.

According to Senvirtne, however, the future of the online business is “brighter than ever”.

15 Jul, 2021
Afterpay hammered by threat from ‘gorillas’ Apple and PayPal
SOURCE:
The Age
The Age

Investors have warned that Afterpay and other buy now, pay later (BNPL) firms face a formidable potential rival in technology giant Apple, the latest global player eyeing off the booming sector.

Shares in high-flying BNPL firms tanked on Wednesday, after Bloomberg reported Apple was working on a plan to offer Afterpay-style instalment loans to its tens of millions of US customers through a partnership with Goldman Sachs.

Such a move would bring Apple, the largest listed company in the world, into direct competition with the likes of Afterpay in the critical US market.

Analysts said Apple’s mooted product appeared different to Afterpay in key respects, but the potential entry of the tech giant still underscored the risk of fierce competition from deep-pocketed rivals.

Shares in Afterpay dropped 9.6 per cent $107, Zip Co plunged 11.4 per cent to $7.32, and Sezzle fell 10.3 per cent to $7.96.

The threat of competition from Apple, which has a market capitalisation of $US2.4 trillion, comes as rivalry is also increasing in Australia. Payments giant PayPal this week launched its Australian BNPL product and said it would waive late fees, and the Commonwealth Bank will launch its BNPL offering next month.

Chief investment officer at Atlas Funds Management, Hugh Dive, said Afterpay’s high market valuation left no margin for error or risks such as major new rivals emerging. Apple and PayPal were big enough to dig in for a long fight for customers, he said. “There’s two pretty big gorillas with enormous cash balances that can handle a lot of pain,” he said.

Chief executive of payments consultancy McLean Roche, Grant Halverson, characterised BNPL firms as “mice” compared with “elephants” such as Goldman and Apple, which he said could “kill off” most BNPL operators.

BNPL operators allow customers to purchase goods and services upfront, and then repay the money through interest-free instalments. The products have proven a hit with younger customers, who are increasingly turning away from credit cards and personal loans.

Milford Asset Management investment analyst Roland Houghton said Apple had the advantages of potentially enormous reach in signing up customers and a trusted brand, and it underlined the threat of competition in the sector.

“Any new competitor is obviously bad, and Apple is probably a formidable and somewhat unexpected competitor,” Mr Houghton said.

Even so, Mr Houghton said he thought Afterpay’s ability to generate leads for retailers - as opposed to just arranging payments - gave the ASX-listed firm an advantage.

Despite the threat, analysts and the companies themselves indicated competition from Apple was not a surprise, and BNPL specialists could succeed by providing value beyond mere payments.

Evans and Partners analyst Matthew Wilson said Apple’s entry would “legitimise” the BNPL firms’ pay-in-four offering, and Afterpay would increasingly become a platform that earned most of its fees from generating leads for merchants.

Morningstar analyst Shaun Ler said the potential move by Apple highlighted the need for BNPL to offer more than a “pay-in-four” product, which could be easily replicated. Afterpay, for example, will soon offer deposits in Australia through a partnership with Westpac. “I think Afterpay should still be able to navigate this because they are a first-mover,” Mr Ler said.

Apple and Goldman declined to comment.

An Afterpay spokeswoman said the company’s platform had never been only about processing transactions, and it had achieved growth by creating value for retail clients.

A Zip spokesman said the company welcomed the competition, and Apple’s move validated BNPL products. “Zip and all the other players continue to grow - despite increasing competition - at the expense of credit cards and other payment types - not each other,” he said.

8 Jul, 2021
Adore Beauty boss sets sights on the other half of the market
SOURCE:
The Age
The Age

With over 770,000 active customers and rapidly growing sales and profits, online beauty retailer Adore Beauty is already in the ‘successful business’ category. But for chief executive Tennealle O’Shannessy, there’s a key market segment the new ASX entrant is keen to conquer.

“Obviously, half the market in terms of retail shoppers are men,” Ms O’Shannessy told The Age and The Sydney Morning Herald. “Our number of male shoppers is still relatively small...so we see this as an opportunity to really build and grow a market.”

The retailer’s small base of male customers is no surprise given the beauty industry’s historical skew towards female shoppers, however, in recent years this has begun to change, Ms O’Shannessy said. Now more men are spending on products such as skincare, haircare and fragrances, providing an opportunity for new-age beauty sellers such as Adore.

“We saw some really interesting customer trends during COVID, one, in particular, being men’s increasing engagement with the skincare category,” she said. “So we launched more products targeted at men and also thought about how we could best show them on our site.”

Adore Beauty pulled off a heavily hyped float on the ASX in late October, riding a COVID-fuelled boom in e-commerce sales, but has had a somewhat rocky ride since.

Shares have fallen over 32 per cent from the company’s $6.75 listing price, plunging nearly 20 per cent in early May after the retailer released a trading update that showed a slowdown in sales and customer growth, falling short of market expectations.

But Ms O’Shannessy isn’t fazed. The executive, like many in her position, is far more focused on the medium to long term prospects for her business and its industry, a view she says many of Adore’s investors share.

“From the conversations that we had with investors, they can see very clearly that Australia is very early on in the [online shopping] adoption curve,” she says. “You don’t have to look too far to those more developed markets in the US and UK, to see that there is still significant growth as Australia catches up.”

8 Jul, 2021
Brauz partners with Zoom to bring virtual shopping to the masses
Inside Retail

Australian omnichannel experience platform Brauz has expanded its platform to allow customers to shop physical stores from their own homes via Zoom, helping retailers struggling with lockdown and restrictions to sell direct to their audience.

Customers can now organise to book a virtual shopping appointment through Brauz client’s websites, which will prompt an email and text with a link to a Zoom call.

“Consumer behaviour is evolving at an unprecedented rate and businesses are looking for technology partners that can provide immersive experiences, removing friction and allowing a greater connection to their brand,” said Brauz founder and chief executive Lee Hardham.

“Our collaboration with Zoom has allowed us to bring these interactive experiences into people’s homes and create a new sense of borderless shopping without the typical geographic constraints.”

According to Hardham, virtual shopping appointments have opened up retailers to a new range of customers, and creates a “safer space” for those who have otherwise been unable to reach a brand’s physical stores – such as people with disabilities or people in rural Australia.

Brauz works with brands such as Nike, Puma, Forever New, Michael Hill and Cue to deliver omnichannel shopping options for customers.

Cue chief information and digital officer Shane Lenton said the option has been a “game changer”, and increased the business’ average order value fivefold and its virutal appointments have a conversion rate of 60 per cent.

“The numbers speak for themselves and reflect customer demand for more convenient shopping experiences via digital channels,” Lenton said.

8 Jul, 2021
Amazon begins new chapter as Bezos hands over CEO role
The Sydney Morning Herald

Amazon founder Jeff Bezos stepped down as CEO on Monday (US time), handing over the reins as the company navigates the challenges of a world fighting to emerge from the coronavirus pandemic.

Andy Jassy, who ran Amazon’s cloud-computing business, replaced Bezos, a change the company announced in February.

Bezos, Amazon’s biggest shareholder with a stake worth about $US180 billion ($239 billion), will still hold sway over the company he started out of his Seattle garage in 1995. He takes over the role of executive chair, with plans to focus on new products and initiatives.

Jassy takes the helm of a $US1.7 trillion company that benefited greatly from the pandemic, more than tripling its profits in the first quarter of 2021 and posting record revenue as customers grew ever more dependent on online shopping.

At the same time, Amazon faces activism from a restive workforce just as a rapid economic recovery causes a labour crunch that has retailers, manufacturers and other companies competing for workers with higher wages and other benefits. The company defeated an attempt by workers to unionise at an Alabama warehouse earlier this year, but faces a more formidable challenge as the International Brotherhood of Teamsters launches a broader effort to unionise Amazon workers.

In a blog post to employees earlier this year, Bezos said he planned to devote more time to side projects, including his space exploration company Blue Origin, his philanthropic initiatives and overseeing The Washington Post, which he owns.

First up, the richest man in the world by Forbes’ estimate will fulfil his childhood dream of travelling to space. Bezos, 57, will blast into space on July 20 when Blue Origin makes it first flight with a crew, bringing along his younger brother Mark, an investor and volunteer firefighter.

Bezos founded Amazon as an online bookstore and built it into a shopping and entertainment empire that is the second-largest private employer in the US, behind Walmart. Amazon, which is buying the MGM movie studio in its latest major acquisition, now makes movies and sofas, owns a grocery chain and has plans to send satellites into space to beam internet service to Earth.

Jassy, who has been with Amazon since 1997, ran the cloud-computing business that powers video-streaming site Netflix and many other companies, making it one of Amazon’s most profitable businesses.

Among Jassy’s challenges are growing calls for tighter regulation on tech giants. A report by the House Judiciary Committee in October called for possibly breaking up Amazon and others, making it harder for them to acquire companies and imposing new rules to safeguard competition.

8 Jul, 2021
There are 4 prominent leadership styles in the office. Here's how they each impact your personal relationships too.
Business Insider Australia

Every leader has a particular style, boiling down to how they direct, guide, motivate and manage the group of people who report to them. Ted Talk favourite Simon Sinek, in particular, has shed great insights on the topic of leadership, and many look to his theories for ideas on how to inspire transformational change as well as performance, innovation, creation and motivation within their teams and businesses.

Given this is all about using human interaction to drive results (in whatever sense that may be), it makes sense that these approaches can be applied to our relationships outside of the office as well. And with people tapping into this behavioural system five days a week, it’s only natural for it to surface elsewhere, consciously or subconsciously.

“Our behaviours are influenced by our attitudes and beliefs, and therefore our attitudes and beliefs about people will influence the way we interact with them. This includes our relationships with people at work, and in our personal lives,” psychologist Vashti Wallace, who works in organisational and employee wellbeing, explained to Business Insider Australia.

Things get complex, because the idea of leadership no longer relates to a group of people learning from underneath you, but instead apply to a partner and an equal.

“Whilst we do not have to be a manager to provide leadership to others, there is an implied power imbalance between the leader and the person being led. Your partner may not appreciate being ‘managed’,” Wallace explained.

This is particularly prevalent when it comes to more directive leadership styles, as opposed to supportive. While both are a way of ‘managing’, you can see the predicament when someone in a relationship is focused on tasks, and the benefits when it’s focused on collaboration techniques. Both can yield the results you want and need, but a method can be aggressive when there’s meant to be a balance of power.

As you can see above, according to Hersey and Blanchard Situational Leadership Styles, there are four main types of leadership: Supporting, Coaching, Delegating and Directing.

Of course, there are literally hundreds of leadership models outlining different styles, but for the sake of understanding how your working methods may affect your relationships, we’ll be using these four, very distinct styles.

Coaching

What you’re like at work: You facilitate engagement within your team, and empathetically understand their individual goals and motivations.

What you want in a relationship: You lean towards a more participative and collaborative approach within your relationship, which is effective when you both have good relationship skills. Your expectations of your partner can be high, and you may become frustrated with partners who don’t share a coaching leadership style, Wallace explains.

Directing

What you’re like at work: This style has a sharp focus on tasks, and not so much on relationships. You dictate tasks and expectations with little room for autonomy.

What you’re like in a relationship: There’s a tendency to take control of decision-making, which can be beneficial for dinner decisions but problematic in other areas. Demanding your partner does something is comfortable to you, so therefore you can prefer a submissive and supportive partner, Wallace explains.

You might tap into this behavioural system if your partner has less-than-perfect relationship skills, like not prioritising relationship time, not balancing housework and more. If you both have this Directing leadership style, Wallace says it’s likely there’ll be “A lot of arguing and power struggles in the relationship.”

Supportive

What you’re like at work: You don’t just delegate a task, you support the person throughout the task until completion.

What you like in a relationship: You prefer to be more passive with your partner and find comfort in them taking the lead. This is what you might experience in the earlier stages of dating, when you don’t really know where you stand long-term. Wallace uses the example of, “You might be trying to play it cool and hoping that they will take the lead and initiate the communication or ask you out on a date.”

Delegating

What you’re like at work: You empower one to exercise autonomy by delegating a task or responsibility and trust them to deliver it successfully.

What you like in a relationship: Wallace explains that this leadership style in a relationship can be seen as distant, underinvested and non-committal. “You may not have expectations of your partner and you are likely to be uncomfortable with your partner making demands of you.” Wallace describes these relationships as either “low maintenance” or “friends with benefits”.


All this being said, not all people behave the same way at both work and home – plenty were shocked to learn that their partners were the “circle back” types during the first working from home lockdown. In fact, some leaders might prefer quite the opposite from their partner than they would their direct reports.

The most important thing is to really understand yourself as a leader to understand why you’ve reacted or behaved in certain ways with your partners in the past. Once you draw that connection, it might become a little clearer as to why you do the things you do. Awareness is a key factor in success for future situations.

This goes for what ticks you off, too. In a recent study by RSVP, it was found that members connected over a shared distaste for certain personality traits, just as much as they did desirable traits.

You can actually look to what you love and hate about your job to better understand what you do and don’t want in a relationship. It’s not as apples and oranges as you may think.

1 Jul, 2021
Digital transformation of SMEs: an easier path to travel than you think
Entrepreneur

Paying for a coffee through an app on your cell phone or buying a product through a tablet in department stores is already common in big cities. However, most small and medium-sized businesses , which are the engine and backbone of the local economy, still have a way to go to migrate to being fully online.

Many small and medium-sized businesses ( SMEs ) have the impression that digital transformation is out of their budget, but they are likely going through some method of digital transformation without even realising it. This comes in a wide variety of actions and forms, from adding chat buttons to your website, to perfecting digital content management strategies.

According to a study by Google and KPMG, digital SMEs grow revenue and profits up to twice as fast as their offline counterparts. Induction of digital platforms enables them to discover new market opportunities, driving overall growth. This is not only reflected in the profits of the business, but they also employ up to five times more people compared to those who are offline.

However, SMEs are going through a level of technological maturity in different stages and speeds, from family stores with products without barcodes, to those more tech-savvy companies that use data to optimise their logistics or inventory. And we also find those businesses that have adopted basic technology in the cloud, but still do not take advantage of the data it provides, which would help them increase their profits. That said, today, no matter what the size of the company, its location or its line of business, technology is an ally for the success of all companies . Here are some recommendations to cross the digital divide that will allow SMEs to have a global reach.

First, it is key to consider the business need. Each digital transformation strategy looks different, because each company experiences unique needs and pursues its own goals. Therefore, the foundation of any solid transformation is the complete documentation of the company's needs. Modelling the business process up front allows you to prioritise specific concerns and question which tasks are slowing down delivery times. For example, defining what activities are time-consuming and can be automated, or what data should be accessible to improve customer experiences.

On the other hand, having a digital presence is a non-negotiable to be competitive. A website is not enough, it must be optimised to meet the needs of both business and consumers. This must take into account the end customers to be able to introduce them into the sales funnel in an efficient way. They also need to make sure their website is mobile-friendly as there are over 3 billion users with smart mobile devices.

Another important recommendation for SMEs is that they take advantage of data to anticipate their business strategies. The digital age is based on data that all types of companies can analyse, regardless of their size. This allows them to study user behaviour and make better decisions. The user's previous interactions is information that can be analysed to know how a user would react in a particular situation, so that the company can anticipate these behaviours.

Finally, digitisation is something that must be seen at the integral level of the business. Users are not platform specific, rather they are looking for an integrated experience when interacting with the business either online or physically. This requires companies to have an omnichannel presence to promote their products and services and reach their audience. Having a strategy that digitises all areas of the business will also facilitate operations.

I would like to close by minimising the fear of the word "transformation" in small and medium-sized businesses. Thinking about a change can generate concern, but this transformation does not have to happen suddenly. It is possible to start small, but the important thing is to be constant in order to reach the goal with force, prioritising business needs and dividing the strategy into phases. For this, it is possible to rely on tools that already exist and are free, such as Google for SMEs , which offer a guide to integrate tools at a recommended rate.

Digital transformation is a path that all SMEs must begin to follow in order to keep up with their consumers, so it is better to start earlier, even with a small step.

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