NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Retail

Australian retail's $160 million Amazon fightback

news.com.au
2 Feb, 2018 08:04 PM6 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Packages pass through a scanner at an Amazon fulfillment center in Baltimore. Photo / AP

Packages pass through a scanner at an Amazon fulfillment center in Baltimore. Photo / AP

A big white shed within earshot of a motorway on the scrubby fringe of Sydney could hardly be compared to Milan.

But what's happening in this nondescript building, away from prying eyes, aims to revolutionise the way Australians shop for fashion.

In a sector that's already a bloodbath, the building is ground zero for a multi-million dollar fight back from the biggest threat to Australian retail for decades — the arrival of US giant Amazon.

On Friday morning, big wigs from some of the largest brands in domestic and international shopping — names like Woolworths, Samsung, Rivers, H&M and Big W — met at the building in Prestons, Western Sydney. They were told many Australians retailers simply wouldn't survive.

They were meeting to peek behind the loading dock and into logistic firm Toll's $160 million state of the art automated retail and eCommerce hub.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Of that investment, $50 million alone has gone on automation, reducing what would be a 2000 strong workforce to just 200 people. Yet, the company claims the centre is 10 times as efficient. It can process more than two items a second and brings the holy grail of shopping — the three hour turnaround from order to delivery.

Just 30 minutes after a customer finalises an online order it can picked, packed and be ready to be couriered.

"When I was younger, if you were lucky, something took six weeks to arrive. Then we progressed to overnight deliveries and now we're down to three hour deliveries," said Toll's chairman John Mullen.

Advertisement
Advertise with NZME.

According to analysis by NAB, Australians spent $23.65 billion on online shopping in 2017. But that's still only 7.6 per cent of the total retail market.

SOME WON'T CUT IT

Despite its lukewarm entry to the Australian market in November, Mullen said Amazon will be a game changer.

"Amazon will have a big impact and a number of retailers won't cut it and won't keep going. But there will be many more who adapt brilliantly to the new world."

One of the Australian retailers hoping to beat the US behemoth is Specialty Fashion Group (SFG), the company behind a host of familiar names including Katies, Millers and Rivers.

Discover more

Business

Wesfarmers' British stores strike trouble

05 Feb 04:00 PM
Business

Mysterious tale of couple who kept getting free packages from Amazon

08 Feb 04:11 AM

The company is taking up 40 per cent of the new centre which, as well as processing online orders, will also deliver stock to stores.

Alex Linton, general manager of logistics at SFG said speed was a key weapon in the cutthroat retail market.

"With this centre we're trying to get ahead of the curve. The Australian consumer wants more flexibility in getting their products, be that straight to home or click and collect and they want that quicker than ever before. This facility allows us to do that."

AUTOMATION

The first thing you notice when you walk into the centre so large it's like someone designed a Bunnings for giants, is an army of driverless forklift trucks. Given superhero names like Wonder Woman and Flash, they silently glide across the building's 32,000 square metres stopping only should a staff member cross its path.

One staff member told news.com.au they were similar to automatic vacuum cleaners except they didn't crash into the furniture.

Their job is to do the "mundane tasks", Toll said, to bring orders to and from waiting trucks and move empty pallets around.

Advertisement
Advertise with NZME.

That leaves staff to concentrate on other tasks like gift wrapping, oiling the cogs and making sure the orders are all collated properly.

Another way the centre has got speedy is because staff no longer run around picking orders. Instead, the clothes come to them.

LESS WORK, MORE EFFICIENT

Towers of grey plastic tubs contain every size and shade of clothing you can imagine while, close by, dresses waft on giant racks.

As soon as an order comes in, the plastic tub is plucked from its resting place and sent shooting down a series of belts to an operator who takes out the required item before sending the tub back.

The clothes are then whizzed downstairs to a packer who places it in bags or boxes that already have the customer's address on. The box is checked and, if necessary, a laser lops of a chunk off the packet so space isn't taken up in trucks delivering air.

The IBISWorld Fast Fashion in Australia report predicted a huge jump in clothes being delivered to almost $2 billion in sales in five years.

Advertisement
Advertise with NZME.

"The online market is growing at 10 per cent a year so retailers need to be in digital to be competitive. Is Amazon driving that? Absolutely" Chris Pearce, Toll's general manger of global logistics told news.com.au.

All this automation might be speeding up delivery times but isn't it doing away with jobs?

"We've gone from packing 80-100 orders per hour to 1000. But what people forget is to get to this level of technology someone has to build it," said Pearce.

"This was all built in southern Sydney so were creating a whole new industry, the automation industry."

Online penetration varies by retailer and category. At Woolworths, about five per cent of sales are online, in Myer it's eight per cent. Linton claims SFG's online business now makes up 12 per cent of total sales.

Not that SFG isn't finding life tough. In November, the company said it would close at least 300 of its 1000 stores and look at rationalising its brands that also include Autograph and City Chic.

Advertisement
Advertise with NZME.

Linton said individual bricks and mortar stores would have to prove they could make a profit to stay open. Online, in contrast, is where it's at.

"The significant growth in our business is very much in online and that's where the focus is."

When it came to Amazon, Linton was bullish.

"This centre has been three years plus in the planning, Amazon wasn't even a consideration at that time. This was about us having the right logistic capability for the increasing demand of our customers."

NO BRAINER

Despite the ability of the new centre to facilitate a three-hour delivery window, Linton said the likes of Rivers and Millers were not offering that service yet.

"If our customers required it we would absolutely be able to fulfil (three hour delivery) but they what they prefer is free delivery which is available on click and collect."

Advertisement
Advertise with NZME.

Nonetheless, Toll, which already has a similar, facility in Melbourne dedicated to sportswear firm Adidas, said tight turnaround centres were the future.

"We have the potential to have one of these in every capital city, it's just a no brainer," said Pearce.

Save

    Share this article

Latest from Retail

Premium
Manufacturing

Hansells owes $10m to staff, ANZ, IRD and company linked to the Hart family

18 Jun 01:34 AM
Premium
Retail

Asahi’s zombie company: The Better Drinks Co posts 10th consecutive loss

17 Jun 11:59 PM
Premium
Manufacturing

Hart family business acquires Hansells Masterton out of receivership

17 Jun 04:45 AM

Jono and Ben brew up a tea-fuelled adventure in Sri Lanka

sponsored
Advertisement
Advertise with NZME.

Latest from Retail

Premium
Hansells owes $10m to staff, ANZ, IRD and company linked to the Hart family

Hansells owes $10m to staff, ANZ, IRD and company linked to the Hart family

18 Jun 01:34 AM

Company linked to Graeme Hart bought company after it went into receivership.

Premium
Asahi’s zombie company: The Better Drinks Co posts 10th consecutive loss

Asahi’s zombie company: The Better Drinks Co posts 10th consecutive loss

17 Jun 11:59 PM
Premium
Hart family business acquires Hansells Masterton out of receivership

Hart family business acquires Hansells Masterton out of receivership

17 Jun 04:45 AM
Premium
Burning Auckland supermarket one of NZ’s most profitable

Burning Auckland supermarket one of NZ’s most profitable

17 Jun 01:54 AM
Help for those helping hardest-hit
sponsored

Help for those helping hardest-hit

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP