JB Hi-Fi Limited (ASX: JBH) has upped its game in order to compete with e-commerce titan Amazon.com, which is due to start trading in Australia tomorrow.
Amazon's pending arrival has no doubt caused plenty of headaches for management teams (and investors) of retail businesses around the country. Many fear that Amazon's dominance and ability to offer lower prices will draw shoppers away from traditional brick-and-mortar stores and instead to Amazon's online store, just as it has done in the United States.
Aside from low prices and a wide array of products, one other factor that attracts so many individuals to Amazon.com is its fast (and cheap) delivery options, and that is where JB Hi-Fi is trying to compete.
JB Hi-Fi has unveiled new speedy delivery options for its online customers, including same-day delivery.
Delivery prices and options vary depending on the product and customer location.
For instance, JB Hi-Fi appear able to deliver some small items via courier on the same day of purchase for $9.99 to the south-eastern suburbs of Melbourne, but not rural Victoria. There are also terms and conditions that must be met to qualify for same-day delivery, including (in my individual case, at least) that the purchase must be made before 2:00pm.
According to The New Daily, Amazon.com will not be launching its Prime service in Australia just yet, which offers members the ultra-quick and free delivery of their purchases.
It is likely that Amazon will need more time to expand its warehouses and delivery infrastructure around Australia before it can begin offering such services. However, although it is unclear how much Amazon.com will charge Australian customers for delivery on their products, it will likely be competitive given Amazon's focus on pleasing the end customer.
JB Hi-Fi is currently one of the most heavily-shorted businesses on the ASX, with 15.87% of its total shares on issue reported as short positions as at 16 November, according to ASIC. That compares to 10.96% for Metcash Limited (ASX: MTS) and 10.34% for Myer Holdings Ltd (ASX: MYR).
While Amazon does pose a clear threat to JB Hi-Fi it is pleasing to see the business upping its game in order to improve its position to compete, and make its online store more appealing.
JB Hi-Fi's shares closed at $22.31 on Wednesday, down 20.4% year-to-date.
