Australia Post partnership with new online department store delivers a “kick in the guts” to retailers

Australia Post has struck yet another partnership with a new online retail store, as the organisation attempts to evolve by striking deals with more eCommerce operations.

But retailers aren’t happy. Russell Zimmerman, executive director of the Australian Retailers Association, says it has reservations about the way the partnership has gone ahead.

“Obviously, we do have some concerns that a body like Australia Post is a type of preferred supplier, if I could put it that way,” Evans told SmartCompany this morning.

“However, more competition is always good.”

Grant Arnott, chairman of conference group Online Retailer, also told News that “this is going to be perceived as a major kick in the guts for a retail industry already under significant pressure from overseas retailers”.

This isn’t the first time Australia Post has attempted to update its image. It continues to roll out new parcel lockers so recipients can pick up deliveries after post office stores have closed, and offers eBay a special shipping rate.

The new store Australia Post is partnering with is called Tarazz and it boasts it is “Australia’s largest online mall”, with over 250,000 items from retailers including Wal-Mart.

According to Fairfax, Tarazz is also in discussions with other department stores including Macy’s, Banana Republic and J. Crew, and other British-based luxury brands may follow.

The store has been launched by Tom Kiing, the managing director of investment firm Bridge Capital. He has also served as a director of Sportsco for eight years and as a director at mobile group Jumbuck Entertainment since 2008.

Kiing and Tarazz were both contacted this morning but neither were available prior to publication.

The business joins a crowded market. Both Myer and David Jones are busy putting together their own “omnichannel” offerings, and fashion-oriented sites such as BrandsExclusive and OzSales have already targeted more high-end fashion markets online.

However, the partnership with Australia Post allows it to differentiate from the market by accessing faster postage.

“Australia Post is also committed to supporting Australian retailers to take advantage of the online boom. With the largest retail network in the country, we understand the importance of the physical store environment and the online offer,” the organisation said in a statement.

Evans said while the ARA welcomes more competition, there is some concern about why Australia Post would have been chosen as a partner.

“However, the important thing is that retailers need to be in the online space. We need to make sure they’re engaging, and we need to make sure they’re able to compete against online and bricks and mortar.”