Amazon threat pushes Australian retailers to speed up

Australian retailers face rising competitive pressure from Amazon, Temu and Shein as delivery expectations tighten and operational gaps in fulfilment and returns widen, according to Shippit's 2026 Commerce Delivery Report.

The report said global platforms are forecast to command 36% of Australian eCommerce in 2026. It linked that shift to consumers' expectations around speed, reliability and the ease of post-purchase service.

Delivery speeds have improved across the market, the report found. The average parcel now arrives in 1.7 days. Retailers, however, still promise 5.2 days at checkout on average. The report said the 3.5-day gap sits in pick, pack and inventory allocation.

"Delivery is no longer a cost of doing business, it is the business," said Rob Hango-Zada, Co-Founder and Co-CEO, Shippit.

Shippit said carrier performance has strengthened during peak trading periods. On-time delivery rose to 93.7% during peak, based on the report's data. The company said this shifts competition away from carrier reliability and towards execution inside retailers' own operations.

Speed and cost

The report framed fast delivery as an expected feature rather than a premium service. It said fast delivery has become cheaper since 2018, falling 43.9% from $31.00 to $17.39. Standard delivery has moved in the opposite direction, rising 15.4% from $9.00 to $10.39.

It also pointed to performance during major discounting periods. Retailers offering same-day or next-day delivery outperformed peers by 3.5% to 4% over Black Friday and Cyber Monday, the report said. Shippit linked the outperformance to conversion and customer trust.

The report argued that many retailers have not aligned their checkout promises with their actual network performance. It said that misalignment can reduce conversion and repeat purchasing, particularly when customers compare delivery windows between local sites and major platforms.

Fulfilment bottlenecks

The report said fulfilment is now a primary constraint on growth. It placed emphasis on store and warehouse processes, alongside the quality of inventory data.

It said many retailers still cannot locate stock accurately until after an order is placed. The report linked that to split shipments, missed estimated delivery times and higher fulfilment costs.

Shippit said investment priorities for 2026 include inventory accuracy and visibility. The report presented real-time inventory as a factor in delivery predictability and cost control, as well as checkout conversion.

"The reality is clear: 2026 will be a fight for relevance and revenue. The economic environment remains uncertain, consumers more demanding, and global giants like Amazon, Shein and Temu now set to control more than a third of Australian eCommerce, this trend will only continue. Survival, let alone growth, will demand clearer insights, faster execution and better experiences than ever before," said Hango-Zada.

Returns and loyalty

The report also highlighted returns as a commercial issue rather than a service add-on. It said 92% of Australian consumers are more likely to shop again after an easy return.

It also said retailers have tightened return policies as margin pressure has increased. The share of retailers offering easy returns fell from 97% in 2018 to 58% in 2025, the report said. Free returns dropped from 49% to 14% over the same period.

Shippit linked those changes to customer lifetime value and repeat purchase rates. It said retailers face trade-offs between the cost of returns and the risk of lost customers.

AI and automation

AI adoption featured as another dividing line in the report's assessment of retailer readiness. It said 62% of retailers identify AI as the biggest trend ahead. It said some retailers have moved beyond pilot projects and applied AI across inventory and fulfilment.

Shippit also said large-scale automation is in a "correction phase". The report said expensive deployments can fail when built on poor data or broken processes. It said spending is shifting towards process improvement rather than automation programmes pursued in isolation.

Retailers Baby Bunting and The Nile contributed insights to the report, alongside analysts and technology leaders, Shippit said.

Citi's Director of Retail and Gaming Research commented on the demand outlook for the sector. "In 2026, we anticipate an acceleration in consumer spending. For retailers, capturing that demand presents a big opportunity. Our work on household spending capacity suggests it will improve meaningfully into 2026, and that's historically tracked well with retail sales. What's compelling is that some categories, particularly electrical, aren't just riding the cycle - they have real demand drivers. Retailers that align with genuine purchase triggers will outperform," said Adrian Lemme, Director of Retail and Gaming Research Citi Australia.

Shippit said execution consistency will shape outcomes as delivery and returns become more visible points of comparison between local retailers and global marketplaces. "In 2026, winning retailers won't be the ones promising faster delivery, they'll be the ones able to execute it consistently," said Hango-Zada.