[LINK] e-commerce

[stephen at melbpc.org.au]

AAMI shuts its retail branches in move online 

By Gareth Hutchens June 4, 2011

ONE of Australia's most well-known insurance brands has joined a growing 
list of companies to dump "bricks and mortar" and jump online.

AAMI Insurance - whose parent company, Suncorp, is the country's largest 
general insurer - says it will close its national network of branches 
within two months and shift its entire business online.

It has 24 branches nationwide. About 100 staff will be affected.

A spokesman for the firm said there had been a "significant shift" in the 
number of customers wanting to do business online and the trend was 
likely to continue.

"These days the vast majority of business is now transacted over the 
phone or over the internet. In fact the branch network accounts for less 
than 2 per cent of our revenue these days," AAMI's corporate affairs 
manager, Reuben Atchison, said.

The Financial Services Union said it did not think the decision to close 
the branches, many of which are in regional areas, was wise. ''One of the 
big dilemmas is that a number of these branches are in regional areas, 
and it will create some difficulty in finding redeployment options for 
those people,'' the national policy director of the Financial Services 
Union, Rod Mason, said.

''I think this is a very interesting move, one that we witnessed through 
the banking area when people were moving to online banking. It didn't 
work for the banks. They lost direct marketing capacity and they lost 
their branding within these areas. We've relayed to AAMI our concerns 
about the decision, however they've made the decision to push ahead.''

Analysts say Australian businesses have been turning away from Main 
Street towards the internet in greater numbers.

"Australia Post entered the market for car insurance in 2009, [offering 
it] over the phone and online [only]. It's obviously something that's 
been [going on] in the industry for a while," a senior analyst at 
IBISWorld, Zlatan Katetanovic, said.

"AAMI's obviously trying to capitalise [on] that also, trying to reduce 
costs by saving on rent and cutting staff and improving efficiency … It 
is somewhat representative of the wider industry."

The news comes as the federal government heard that 88,000 retail jobs 
would be lost if the GST loophole on internet purchases was not closed.

In a submission to the Productivity Commission's inquiry into the retail 
industry, the National Retail Association said yesterday the internet was 
making it harder to compete with foreign retailers. The government must 
create a "level playing field", it said.

If duties on purchases under $1000 were not imposed things would only get 
worse. "Other countries impose and effectively collect taxes and duties 
on imports purchased online and there is no reason for [the] Australian 
government to toss this in the 'too hard' basket," it wrote.

<http://www.smh.com.au/business/aami-shuts-its-retail-branches-in-move-
online-20110603-1fl0u.html#ixzz1OFkgqslF>
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Cheers,
Stephen