A colleague and I were discussing Amazon’s imminent arrival here in Australia and the numerous articles about the impact it will have on local retailers. Some observers have predicted significant losses for Aussie businesses, whilst others insist that the threat is overblown.
The colleague, an Aussie and former Amazon employee grinned and said, “they have no idea.”
“No,” I replied, “they don’t.”
“It won’t be overnight, like some of the pundits have speculated, but it will be a complete annihilation,” he said. “Remember what Bill Gates said: ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.'”
To illustrate the state of Australian retail, allow me to describe my shopping experience today.
My family likes to play board games together. We play Settlers of Catan, Ticket to Ride and a handful of others. Today, I was considering buying a new game called Small World, from the makers of Ticket to Ride.
I was walking through the mall and spotted the game at Zing Pop Culture and it was priced at $98 AUD (~$77 USD). Expensive for a board game. So I looked online and found it Cubox, an online-only retailer, for $59 AUD + $11 shipping. I thought of asking Zing to match the Cubox price, but I expected that wouldn’t fly since it was an online-only shop.
Instead, I found the game for $79 at the online site of another local (brick & mortar) Sydney game shop, Games Paradise. I asked the salesperson at Zing if they would match the price of another game store and the salesperson told me that they only match prices of other physical stores that actually have the item in stock. I told her that Games Paradise is an actual store and suggested that we could call them to check their stock. Then she clarified that Zing would only match the price of another retailer in that same mall.
Wait, what???? The salesperson was super friendly, so I didn’t sarcastically respond about how that would be a totally reasonable position if we were in one of Singapore’s multi-floor consumer electronics malls where a hundred different shops are all selling essentially the same stuff; and that since there isn’t another similar shop in this mall, the price match policy is of literally (and I do mean literally) zero value. Rather, I said thanks anyway and left.
Where did I buy the game? To refresh, here were my local options:
- Mall store: $98
- Other local retailer for $79 (+shipping if I order from them online)
- Unknown online-only store for $59 + $11 shipping: $70
I chose option 4: Amazon. The game was $50 and shipping and customs was $21.50, for a grand total of $71.50 AUD. Granted, I went for the cheapest shipping option and it’ll be two weeks before I see the game, but I bought it from a reputable retailer at a fair price without any price matching nonsense.
Now imagine that instead of all of the effort described above I can simply go to amazon.com.au, buy the game for $50, and have it delivered to my door tomorrow (if not later today) for free. And imagine that I can do it for a virtual limitless variety of consumer goods. Once Aussies get a taste of that experience, it’s going to be difficult to convince them to head back into the smaller and smaller world of the mall.