Johannes Faul: What we've seen so far from Amazon is that they are sharp in pricing, but they are not aggressively discounting. So, on average, the items that we've been monitoring on average, they are roughly 9 per cent cheaper than the next closest offer, which isn't dramatically cheaper. But they are the cheapest on their standard delivery option and they are going to drive or improve the delivery times, in our view, to be best-of-class in Australia.

So, we think that for the leading Australian retailers in their categories, they will need to continue on this thing in online and they have the scalability to distribute or fractionalise those costs over many, many units and they will be successfully competing with Amazon in our view. But this is really where we are going to see a lot of improvement for the consumer is on the delivery times going forward.

Now, some categories are more immune or less impacted by online in general than others. Two of those that come to mind are auto parts or hardware where typically for the one you have a very low value to wait ratio. So, it's bulky items you'd be shipping and very expensive to ship and deliver.

And the other is the immediacy of use. The consumers need the hammer this weekend to continue doing what they are doing on their house or the tradesman needs that real now. And also, for auto parts you need to get that car back on the street quickly.

So, those are two categories that we see are more sheltered from online in general, also form Amazon. And then others like apparel, obviously electronics, those are the ones that are – they already have more sales online and therefore are more impacted.

Now, what that means though is the market sees it the same way. And we think that currently the market is overestimating the positives for those defensive, more defensive categories that I just mentioned, hardware and auto parts and overpricing the risk for those categories that would be more impacted.

So, therefore, in our view, you can see Bunnings' owner, which is Wesfarmers, is expensive and also Super Retail Group, which with half of their earnings from auto parts, you see that stock at the moment at the expensive end.

Whereas we see a department store retail, Myer, is currently our preferred pick in this space, which has a lot of headwinds ahead of it, but we think that those risks are more than appropriately priced in and we think that the stock presents an opportunity for investors at the current price levels.