Last month, I went through an exercise to see if online disruption matched all the hype and promise.
This test was in a different retail or service market, not for coffee.
My beloved wife required new tires for her vehicle.
These days, people tend to flip their cars more frequently, and despite owning numerous vehicles, we rarely go shopping for new tires.
It was a really long time ago.
So, I did precisely what most consumers in Australia tend to do first.
Start by researching on Google search.
This was also my preference; being time-poor, I needed to research later at night and compile my "preferences list".
First impressions - fewer tire sellers now than I remember when I was in the market to purchase car tires.
There may have been a degree of industry consolidation.
Second impression - what are all these unknown tire brands - how can they be rated and, more to the point, trusted?
Where's the reputation and history of these unknown brands, and how can the value be compared against brands I already knew so well?
With so many new, strange brands of tires, I was forced to cross-check or validate with review sites to check out the owner's experiences.
OK, it's hard to believe sometimes the extremely negative reviews (affectionately called the "troll" effect).
Tires only lasted 15,000km, but after reading one too many horror stories, I decided to narrow my focus on brands I was familiar with and avoid risks.
After all, my wife's safety will always be my most important value factor.
I was armed with my limited range of trusted quality brands, and the next step involved visiting nearby websites for tire sellers.
This included those "large" national networks, brands that I won't mention here, but you can guess who they are - specialist tire fitters that have been around for a long while and often sell one or many brands of tires, etc.
I had originally hoped this approach of searching would be the most convenient for a time-poor person. Most tire websites failed me by refusing to provide pricing on their websites. I was hopeful but needed to be certain.
God, that is frustrating. It's like an instant strike against them and an epic failure in my books.
I'm not talking about a single company here.
Most businesses use a counterproductive sales process that frustrates customers.
The "call for pricing" label is brain-stupid and annoying at 10 pm when tired, and it's the only time we are available to conduct research.
A price-hiding strategy tells me a sure sign of a failing business - too scared to publish pricing and using deceptive tactics to harvest your data by insisting you fill out detailed "Contact Us" forms.
I don't want them to know all my contact details when I'm just browsing because, at this stage in the shopping cycle, I'm just anonymously seeking an estimate of price before I even decide if they get my business.
Yet they have well and truly placed the cart before the horse.
In our modern era, products like tires are considered commodities.
It's easy to display pricing when the user is well-informed and has already selected the sizing. I have already done all the hard work; they don't need to add value by helping me.
Price hiders immediately lost my business (and respect) when they failed the first purchase step - providing a buyer with some ballpark estimate or pricing.
After the 3rd attempt at obtaining a simple solution price for our tires without speaking to someone yelling down the phone from a noisy workshop, I was now more than a little intrigued as to why they were acting this way.
It took a little while to discover the possible reason for price-hiding on tire seller websites.
Five minutes later, I found out why a specialist online disruptor offered the same tires (along with a much larger range) at far cheaper prices.
When I say cheaper, I'm talking about 20%, a big number when dealing with $1000 for a set of tires.
It's also important to put that into perspective - tires are not clothes or other merchandise imported with triple-digit mark-ups, so 20% is a significant difference in a competitive and mature market.
To validate my newly discovered theory, I reluctantly made phone calls during the day to tire "chains" to obtain pricing, and yes, it was more expensive.
No, most of them did not have the tires I needed in stock for immediate fitment.
Welcome to the other surprise.
Tires needed to be ordered, but unfortunately, the size of the tires was Australia's most common and popular for SUVs.
Despite this, no stock was available for purchase in any of the fitment centres.
This indicated that the fitment centres also ran a spoke and hub model, similar to the online disruptor.
Bingo.
The online disruptor offered 20% savings and a wider choice of 15 fitment centres (mostly small mechanics) within a 10km radius, including a premium fitment centre within 2km (suppose we were lucky).
They had a similar lead time for ordering the tyres from a distribution centre, which was remarkably similar to what the traditional National tyre retailers offered.
The online disruptor also provided a free car wash and vacuum and a 12-month puncture warranty, which was not part of the standard offering from the national tire retailing chains.
Now, faced with some facts and details to enable comparison, it was rather telling with the differences, and perhaps it all seemed too good to be true.
I was initially sceptical, but the prospect of saving money, ordering online at 10 pm, flexible convenience and useful value-added benefits from a disruptor proved far too compelling.
Going back to the original search and the national tyre retailing chains, I could see an excuse why they might not publish their prices because it's just so easy on the web to compare deals, but by hiding prices, they immediately lose a large portion of interested shoppers - dropping off when they can't find what they are ultimately seeking.
I know I was one of those who abandoned the moment their offer could not be processed instantly or easily.
Hiding prices is akin to giving a powerful impression that the business is running scared and under attack.
Ultimately, it will shrink as the online specialist aggressively builds market share through price and value by acquiring more customers.
We need to determine if their actions contribute to achieving profitable growth.
Some old-school tyre chains are trying to innovate by having mobile fitment available - saving the effort of taking the vehicle to a centre.
However, this convenient service comes with a hefty price tag.
As a result, only a small percentage of customers who prioritize convenience over price will use it.
Of course, the online disruptor needs to recruit partners to match this service somewhere down the track.
Never in my dreams had I ever thought a market like car tyres would be so ripe for disruption, but there it was before me, begging to be tested.
We saved $216 on a set of 4 medium-range tyres from the online specialist, and despite my long-held ethics to always firstly support local businesses in our area, the differences were just too big to ignore.
I was also probably a bit peeved at the "call for pricing" policy used by local companies, the difficulty in trying to speak with someone to obtain pricing when they don't answer the phone, or it's engaged or noisy when they answer.
The online disruptor informed us every step of the way, and the process worked relatively smoothly.
A follow-up offer was smart marketing to incentivise us to refer our friends to their service - they also had the fitment centre call us on the phone a week afterwards to ensure everything was OK - now that's not something the local chains had ever done in the past.
It's called a healthy level of respect for the customer.
Many industries and markets are already well down the path of disruption.
Cycling stores are closing down everywhere, having been outplayed by online competitors.
Furniture and homewares are transitioning to online models, and just about every physical product is considered first in the online realm before the physical.
Even selling motor vehicles is moving to an online focus as showrooms become more expensive.
Failing to evolve or adapt to challengers is a sign of either arrogance, fear or laziness.
A do-nothing strategy, or ignorance of the potential threats, means market pressures will inevitably squeeze incumbents.
I doubt whether traditional tyre retailers have the foresight or innovation to fight back adequately.
We also bet that online specialists already know how to win in the market against them, exploiting their weaknesses in price, value, options, features and follow-up service.
What's unclear in this example is whether there are some pockets of funding disruptions in the tyre retail industry, e.g. selling at a loss to "acquire customers and market share" whilst simultaneously "damaging or hurting" competitors by impacting their profitability and preventing businesses from setting market prices.
I will not mention the name of the company we dealt with, but I can tell you that it is part of a large, ASX-listed corporation with interests in different motor vehicle industry segments.
This is likely to have given them valuable insights and a more comprehensive range of services, thanks to their deep pockets.
As a result, they might be using portfolio pricing to create a competitive advantage and establish a strong brand image.
In effect, the online tyre specialist controls the retail price without added burdens of store leases and staff; they have a much leaner structure to play the game longer and harder, which may force competitors to disappear or to "downsize" their infrastructure as they battle margin squeeze.
Using large amounts of capital funds to build and distort markets has been a common business strategy for centuries.
Recently, many tech companies like Uber and Food Delivery Services have done the same.
They operate at a loss for longer periods, using their deep pockets to disrupt the market and outlast competitors until they succeed.
As they scale, it will be important to maintain the service quality when using a myriad of partner networks.
