The Modern Market

In the Lion King, Mufasa tells his young son Simba; to never go into the shadowlands. Wise advice. 

The ACCC would no doubt provide the same advice to customers when it comes to the marketplace. If vendors are not prepared to clearly display their prices and the quality ratings of their goods, then stay away. Trouble ives in the shadows.

A market is an arena in which commercial dealings are conducted. 3000 years ago you would see them in the bazaars of Persia. In medieval England you would see them in village fairs. Last century saw the development of the bricks and mortar super-markets. However the mega marketplace of this century lives in the cloud.

A critical element of the market is visibility. 

In the past, short of going to each vendor in the market and asking for the price, the only way to ascertain the best price and best quality would be by word of mouth. The information in circulation was limited.

Thankfully the internet makes things a lot easier. Search engines can sort the cheapest and most expensive loaf of bread. The bread with the highest and lowest customer ratings.

Now, not every vendor selling bread has an obligation to put their bread prices online. However, there are some goods and services where absolute market transparency has broader ramifications.

Take for example, petrol. There are numerous vendors in the marketplace that sell petrol. 

Imagine if petrol prices were not required to be displayed on the side of the road. Motorists would need to pull into a service station to read or be told the petrol price at the pump. If the price was too expensive, they would drive off and go to the next petrol station. They would repeat this madness until they found petrol that was appropriately priced. This is a shocking customer experience. It adds to traffic congestion as people waste their time looking for petrol. It's very inefficient as people use petrol to find cheap petrol. This was a classic example of information asymmetry. Where information and power was heavily on the side of the petrol stations.

Therefore governments passed a law requiring all petrol stations to display their price on the side of the road.

This worked for the last century, but doesn’t cut it for this century. 

With the main information medium being your mobile phone, it makes sense that a government focussed on the customer would also require the petrol prices to be displayed online. 

But now we enter the information flood zone. 

Imagine if you had to download half a dozen apps to have visibility of the various petrol prices. This is information white noise. It makes it harder to get the information you actually need.

The NSW Fuelcheck app, is an example of improved market transparency and a customer centric channel to easily absorb information. It has been a real success story. 1.4 million downloads. Customers giving us feedback 44,000 times, with a mighty 94% thumbs up.

The great thing about Fuelcheck is that the data is open source and available at data.nsw.gov.au. This means other vendors and start ups can use the data to build even better products and services. For example, car manufacturers can re-skin the data and incorporate this feature in their new line of smart cars. 

NSW Fuelcheck is also a Regtech heaven. Real time information is key. Customers can easily report on their app when the price displayed online does not match the price sold at the pump. This means regulators can literally call or otherwise notify the service station within minutes of a complaint. This is a much smarter allocation of resources. 

Traditionally my side of politics leans towards a classic laissez faire market in play. Small government with little intervention. 

In our data world we need a new form of strategic intervention to keep customers safe and the market strong.

The market is the bedrock of capitalism. When it is working well, the competitive tension drives lower prices, spawns innovation and improved goods and services. It is a self cleansing reform engine. It's a beautiful thing.

A well oiled marketplace means a well informed and confident consumer. 

Our challenge today is that we are bombarded with information. 24 hours a day. Through increasingly new mediums, platforms and channels.

An information flood can be just as devastating as an information drought.

Governments will increasingly have a greater responsibility to protect both the customer and the very market itself, in a world where we are being drowned with information. 

In addition to for example FuelCheck, what other goods or services could benefit from this level of transparency?

What other shadows exist that requires a dose of sunlight for Simba the customer? 

….. 

Victor Dominello 

10 March 2021