Death of the middleman (Act 3)

Online shopping via smartphone

In my third article looking at disintermediation I examine the most famous of the Business 2 Customer (B2C) operations - the internet only shop.  Many have tried but few have lasted the distance.  One of the undisputed kings of the market is Amazon.  Amazon manages to play so many roles in the supply chain.  They are now so huge that they can perform the roles of wholesaler, distributor and retailer all at once.  They can even provide these services to thousands of internet shops that exist within the Amazon domain and use Amazon's massive infrastructure for running their business.

I'm a big fan of Amazon.  Although I've chosen to live at the bottom of the South Pacific in Wellington, New Zealand,  I like to do my shopping on the other side of the world.  Ah, the wonders of the modern age.  Take a look at one of my shopping encounters with this champion of the internet . . . .

• Are you a savvy online shopper?
• Do you expect, nay, demand a keen price on everything you buy?
• Are you prepared to spend considerable time researching the marketplace before you commit to buying?
• Do you feel a sense of pride when you finally make your purchase, knowing that you have done everything possible to secure the very best deal for the model you want?
• Do you approach this shopping minefield as a personal challenge of your tenacity to triumph over adversity?

If you answered yes to any or all of these questions, we share something of a common purpose.  I love the hunt for online bargains and I sometimes spend an alarming degree of time and effort on the silliest of things but I'm big and ugly enough to admit this.  Call me a product of the internet shopping age.

OK, maybe I do get obsessive about these things but I freely admit that I am happiest if I feel I have examined all the available information before I commit.  Sometimes this is straightforward - if only one or two suppliers can provide the goods then it's just a question of whether the price is right.  However, when there are many possible suppliers, that's going to take a bit longer to follow the research trail.  At this point many people give up and buy the first copy they can find but that is not me.  Oh no.

I'll illustrate this with a real-life case.  I'll call it Hunt the Wolverine.

X-Men Blu-Ray box set

I hadn't seen any of the X-Men movies and I thought it was about time I rectified that.  Sure, I could pick most of them up on weekly rental at the local DVD library or I could buy the individual parallel imported Zone 2 (UK/Europe) DVDs from the Warehouse for $10 each or less.  Mighty Ape could offer me the Zone 4 (NZ/Australia) DVDs for much the same price, if I wanted to pay some postage costs too.  They also had a DVD boxset of the four films, which was competitively priced but, here's the thing - the reviews all shouted this at me - buy the Blu-ray versions, they're so-oo much better.

Now the Blu-ray option introduced a whole new set of research challenges.  New Zealand, unfortunately, has not yet accepted Blu-ray as the way of the future.  I'd love to blame someone for this and frankly I don't know who is responsible - all I know is that it is taking way too long.  I'm guessing the movie studios are keeping their pricing too high, the distributors certainly are and the retailers are making a pretty poor effort at persuading customers to embrace Blu-ray.  For whatever reason, Blu-ray bargains in the local market are few and far between.  Generally for Blu-ray I need to look overseas.

Here's where the NZ shopper gets a bit of a break for a change.  Unlike the DVD zoning debacle where NZ ended up in a different zone to the UK, the movie industry (bless their cotton socks) did at least realise that they could sort some distribution/manufacture issues by including NZ/Australia into the European Blu-ray region.  Now don't get me started on the whole topic of zoning - at least with the better zoning for Blu-ray, I can buy my home zone from British and European retailers as well as local ones.  And with parallel importing rules as they are in NZ, I'm not even infringing on that score.

Top online shop - Amazon UK

Ask yourself though, are you ready to buy from overseas?  Well, this is something that clearly plenty of people are doing but it does scare others.  Let's assume that you are prepared to buy from a reputable giant like Amazon UK.  What should you consider?

• Will Amazon ship to me down here at the bottom of the world?  (The answer is not straightforward - certainly don't try buying computer games or software, but Blu-ray/DVD/CD is fine)
• What's the shipping going to cost me?  (Not shown until checkout.  Note freight on some books can be horrendous)
• How long can I wait?  (Probably takes about a week if it's in stock)
• What's the price in New Zealand dollars (not shown during the shopping process but broken down at checkout and payable in local NZ currency so you can avoid the bank conversion fees)
• What other costs are there (if you don't know how much you can spend before Customs will hit you with GST, you need to do some more research)
• Is the product going to work in my local market?  (Depends - and if it doesn't, that's your lookout)
• What if it's damaged or lost en route?  (Amazon are pretty good at sorting this out but you won't know that until it happens to you)
• Will the warranty be honoured if it goes wrong (this is an absolute minefield so I will only buy things that have a value that's not going to keep me awake at night if it fails)

Back to my story on my X-Men Blu-rays.  I finally found a box-set of all the movies at Amazon UK, which they supplied to me pre-Christmas in just 5 days for less than the cost of the DVD box-set offered on Mighty Ape, the cheapest NZ source.

I sat down to watch the first movie and 20 minutes in I knew that my Hunt the Wolverine mission had been worthwhile.  The picture and sound quality were spot-on and my sense of smugness for bagging a bargain was the icing on the cake.

Be a savvy online shopper (Wikihow tutorial)

Kiwis shop on their smartphones (Netguide)

Introduction to retail (Wikipedia)