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E-Commerce


Walmart Is Quietly Becoming Quite The Mobile Hipster

September 12th, 2012

With a staggering $444 billion in annual revenue, Walmart has generally been sluggish and conservative, allowing tech innovations to be toyed with by rivals such as Amazon.com. But in the last few months, Walmart has quietly started acting like quite the aggressive startup. It has embraced mobile and various innovative tech approaches, including an infatuation with social media, in a way that no major chain—especially not the old Walmart—has ever done.

Consider just the last couple weeks’ activity at Walmart alone, and it becomes clear how change is being embraced by Bentonville. And as anyone who has ever worked with an aircraft carrier knows, turning such a huge boat around quickly is hardly easy. How that’s happening at Walmart is the topic of StorefrontBacktalk‘s September monthly column in Retail Week, the U.K.’s largest retail publication. The column lives here at Retail Week. For those who don’t have a Retail Week subscription—shame on you!—here’s a copy at StorefrontBacktalk.…


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Walmart’s CRM Gateway: Mobile Checkout?

September 5th, 2012
Walmart's two-day trial last week to test in-aisle mobile checkout was about everything other than accelerating the checkout process. The chain saw it as delivering everything from a back door into a CRM system (which Walmart has never had) to making coupons and other incentives several orders of magnitude more effective and even gathering in-store geolocation data for marketing analysis. ("We may have sold 50 TVs this week, but based on the number of people standing by that area for more than six minutes, it looks like we need to tweak pricing more.")

When Walmart quietly (was it really intended to be quiet? More on that in a moment) ran this test at one store near the Bentonville mothership, many compared it with the chain's self-checkout efforts. But this setup's advantages make that particular function of minimal interest. Still, it's the most palatable explanation to offer shoppers.Read more...


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Walmart’s New Search: Context Will Have To Wait

September 5th, 2012
When Walmart.com announced its new search engine on August 30 and that it had already gone live, the retailer promised the ability to understand "the intent" of a shopper's search. As a practical matter, though, the new engine simply didn't. But "in the next couple of months," version two of the engine will actually consider the shopper's queries in context, according to the Walmart executive in charge of the program.

To test whether the initial engine was indeed able to factor in a shopper's intent, we searched for Apple. Understandably, the results were about iPhones, iPads and other hardware from that company. But we then searched for Oranges, Bananas, Pears and then again asked it about Apple, hoping that it would now understand our desire for the Garden of Eden edible type of apple, which Walmart.com does indeed sell. Nope, it didn't take the hint and continued to display mobile computers. (When we searched for "fruit," the desired apples did materialize in the results.)Read more...


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Walmart’s Clever Price-Comparison Trial: Show-and-Tell Without Going To The Store

September 4th, 2012
Walmart has started a trial in three cities where shoppers can E-mail photos of competitors' receipts, inviting Walmart to do its price comparison without the shopper ever having to actually walk into a Walmart. This clever gambit shares some of the strategy of its online cash program, where the chain didn't want to lose online shoppers merely because they didn't have—or didn't want to use—a payment card.

In this trial program, called logically enough "the Receipt Comparison Tool," the idea is to showcase hopefully lower prices to consumers who don't want to walk into a Walmart store. It's sort of a Missouri approach, with the shopper in effect saying, "Show me. I like my store. But if you show me concretely how you'd charge me less for the same stuff, I'll drive over to your store quickly enough. But you show me first." The IT challenge is to accurately compare prices for a specific Walmart store at a specific time—no easy task, given that each store has its own prices and that those prices can change hourly.Read more...


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Yes, McDonald’s Is Testing Mobile Payment In France. PayPal? Not So Much

August 23rd, 2012
That McDonald's/PayPal trial in France you've heard so much about for the past week? Turns out it's not actually a PayPal trial at all. McDonald's France, which has been experimenting with online ordering since 2010, launched a new version last February that does include the ability to pay online using PayPal—or any payment card—before picking up the order in a special line in-store. But a big new PayPal mobile payment app? That doesn't exist.

Even the possibility that the French order-online-pick-up-in-store system is being tested for eventual U.S. launch looks like wishful thinking, considering how differently McDonald's uses customer-facing technology in France.Read more...


Mobile Conversion Rates May Not Mean What They Seem To Mean

August 22nd, 2012
When E-Commerce execs look at stats comparing mobile and desktop online shopping, one key goal is often to determine conversion, meaning how often consumers close the deal and buy something. But does typical conversion rate data really show that information when it comes to tablets and smartphones?

A report this week from vendor Monetate, for example, showed that desktop devices (laptops, PCs and Macs, primarily) in Q2 2012 typically converted at 3.34 percent, while tablets converted at 3.17 percent and smartphones came in at a measly 1.09 percent. The question is, though, what does it mean when a smartphone shopper doesn't close the deal? Could that shopper actually be inside the store at the time and close the deal by taking the item to a checkout lane? Or perhaps that customer is on the train coming home from work and chooses to do the research, browsing and deciding on his or her phone and then saving the winning product to a shopping cart, with the intent of purchasing that night from a laptop at home?Read more...


Macy’s: Adding Same-Day Delivery Would Cost Us Next To Nothing

August 15th, 2012
The big news from Macy's earnings call on August 8 isn't that the department store giant might someday offer same-day delivery if customers ever show a desire for it. The real news is that same-day would require almost no capital outlay, nor will expanding Macy's current store-to-door delivery program beyond the currently planned 290 stores, according to the person who should know: Macy's CFO.

By not building out its delivery capabilities according to some grand plan, the 800-store chain has put itself in a position to do almost anything it wants. And because the CapEx is so low, the ROI is essentially instantaneous.Read more...


Sears, KMart Outage Was To Prep For The Holidays

August 15th, 2012

The sites for Sears and KMart were down for about three hours on Wednesday (Aug. 15), starting around 9:00 AM New York time, in what the chain said was an intentional outage to prepare for an unspecified infrastructure upgrade for the fourth quarter. Planned weekday outages are becoming more common and, for some chains—such as Home Depot—it can be an ideal time to take the site down. One apparel chain has even been using outages as marketing opportunities.

And when Best Buy recently had its own planned outage, not only did the retailer reveal how dependent its physical stores and call centers have come to be on the site, but it also set itself up for an imminent move to the cloud. And it’s that type of infrastructure improvement that Sears had in mind. “It’s a longer term enhancement that we did want to get complete in advance of the holidays,” said one Sears manager. Outages—they’re not just for disasters anymore.…


FTC Says It’s Now Going After A Lot More Than Just Violated Privacy Policies

August 15th, 2012
In another sign the FTC is putting some teeth in its enforcement, the commission followed up the announcement of its $22.5 million privacy settlement against Google on August 9 with a list of ways companies may be turning themselves into FTC targets.

In a blog post on Monday (Aug. 13), FTC Senior Attorney Lesley Fair said that following a published privacy policy isn't enough. The FTC could go after businesses that misrepresent privacy protections in their opt-out and customization instructions—or even just those that join an industry self-regulation group but then don't follow its code of conduct.Read more...


At $83.8 Billion A Year For School Supplies, The Definition Is Broader Than Most Assume

August 13th, 2012

A recent survey report from the National Retail Federation (NRF) touted how much would be spent on school supplies, sometimes more generically referred to as back-to-school spending. Even with that encompassing umbrella term, the figures seemed to be quite a reach. We noticed this when American Express—citing the NRF data—talked about parents spending $83.8 billion in school supplies this year.

It seems the NRF has a return to classes for K–12 families costing $688.62, with estimates of $95.44 on actual school supplies, $129.20 on shoes, $246.10 on clothes and $217.88 on electronics. Families with college students will average $929.35, but that includes things like dorm furniture and college-branded apparel items. Also food, which was never something I thought of as a back-to-school item. Wouldn’t parents have to buy clothes, shoes and electronics for their K–12 kids even if they weren’t in school? And don’t college students eat pretty much continuously throughout the year? (About every hour, according to my recollection.) That said, food is being sent to school with students and many of these categories have some relevance. It’s a huge number, but retailers might want to rethink what they consider school supplies.…


eBay’s Same-Day Delivery Contrasts With Amazon’s Same-Day In Just About Every Way

August 9th, 2012
eBay this month has joined Amazon in experimenting with same-day delivery. Although both are delivering same-day, they are doing it in almost the opposite way. Amazon's effort is being offered at a Premium price, while eBay is offering close to loss-leader pricing. Amazon—rightly or wrongly—is seen as a threat to brick-and-mortars, whereas eBay is emphasizing that it's buying from partner retail chains at full price. Amazon's same-day delivery requires very early morning orders and as long as 13 hours for delivery, whereas eBay is targeting—and, it claims, delivering—everything within one hour.

eBay's trial run seems to be deliberately low-cost and extra-fast delivery to truly see who would use such a service under the best of conditions. It's highly unlikely that a national rollout could continue such specs. eBay's approach isn't all good for retail partners; only the eBay brand is shown, which reduces the chains to unseen suppliers—albeit well-compensated unseen suppliers.Read more...


What Does Time Spent Mean For A Mobile App? Not What You Might Think

August 8th, 2012
A very interesting mini-report from Nielsen came out on Wednesday (Aug. 8), one that ranked the top mobile shopping apps used in June. But when it also listed those with the highest time spent, it glaringly failed to say why. And that "why" makes all of the difference.

In that category, Shopkick blew everyone away with an average of 3 hours, 19 minutes and 11 seconds. So why did Shopkick blow everyone else away, average time spent wise? It has to do with the nature of that app, not that its users were so enraptured by the content.Read more...


Can Timing Text Ads Make A Difference?

August 8th, 2012

Charlotte Russe, a 500-store youth apparel chain, recently cited almost 100 percent read-rates on its text messages, which pretty much indicates the lack of understanding of text open-rates. In E-mail, an open-rate means someone has read the subject line and the from line, and then decided the message is worth exploring. In text, “opening” means far less, if anything at all. But that doesn’t mean there are no good ways to gauge message effectiveness—redemption rates do a wonderful job—and it also doesn’t mean there are not good ways to make those messages get read more often. Consider, for example, a customized honeypot approach—sort of CRM for texting.

Few retailers are using text timing as a means to send such messages more effectively. Most consumers tend to open and respond to texts during certain hours, based on their schedules. To determine those optimal times requires little more than sending some very deep discount offers—offers too good to resist—to get targeted shoppers to respond quickly. By sending two or three such honeypot messages over the same number of weeks (use different days to gather more data), you can map the best times to send messages to those shoppers. This approach goes beyond tailoring the message to the individual shoppers. It also tailors when to send that text.…


It’s Official: Pre-Authorization Data Is In Your PCI Scope

August 6th, 2012
Like many QSAs, PCI Columnist Walter Conway frequently gets asked whether pre-authorization cardholder data—that is, card data written on paper or stored electronically before the transaction is authorized—is in scope for PCI. His answer has always been that if you have any cardholder data, you must handle it in a PCI-compliant manner. That advice applies whether the data is pre-, post- or somewhere in the middle of the authorization process.

Unfortunately, some vague wording and a quote from the very first PCI Community Meeting caused some merchants to question this conclusion. They argued that cardholder data only comes into PCI scope after the transaction is authorized. We now can put this question to rest. The PCI Council has come out with an official statement to QSAs declaring that all cardholder data is in scope, whenever and wherever it is.Read more...


Could “Make An Offer” Pricing Ever Work In-Store?

August 1st, 2012
Should major chain sites use "make an offer" pricing? It sounds heretical, but it's being considered at several major chains. The most interesting argument is that it's a great way for retailers to circumvent minimum advertised price (MAP) restrictions. But could it boost sales of slow-moving SKUs? Even more outlandish, could it move more top-selling items?

This discussion, though, is really about a much more strategic and fundamental issue. With showrooming and reverse showrooming and everything in between, does the very nature of retail Web pricing have to be rethought? Once the price comes off the Web page, everything is up for discussion. Customized pricing? Pricing based on how generous shoppers have been with their last five purchases? Is this another way to ditch the bottom-feeder bargain hunters? Will chains offer deeper discounts to people who shop with a short list of their most direct rivals? Will Target.com charge a lower price to someone coming to its site from an Amazon visit as opposed to a Barnes & Noble visit? And could this flex pricing ever make the transition to in-store, leveraging mobile?Read more...


Can A Mobile Coupon Concept Work With The Cloud And A Single Processor?

July 25th, 2012
Around January of next year, 10 major retail chains will be testing a way to have coupons associated with a shopper's specific payment card. The reductions will then be automatically deducted from the total purchase with no effort—not even a button press—from the store associate. The trick with this trial is that the marriage of card and coupon, along with the automatic reductions, is done by the processor.

If this approach works—it's already been tested with much smaller merchants—the potential is for payment cards to be associated with anything that the full-blown digital wallets have promised: giftcards, loyalty programs, stored value, etc. Read more...


The Details On A Pair Of Amazon D-DOS Crashes, Just One Presidential Term Late

July 25th, 2012

Every four years, Americans elect a President, enjoy Leap Year and watch the Olympics. And the last time those things were happening—four years ago—Amazon may not have been perfect at thwarting D-DOS attacks. But even then, it was pretty good at protecting its card data. This comes from federal documents recently unsealed, documents that described three successful D-DOS attacks against Amazon, eBay and Priceline. The first Amazon attack happened on June 6, 2008, at 10:23 AM California time and continued for about four-and-a-half hours, until Amazon fought it off. “During the attack, the bots involved in the attack requested large and resource intensive Web pages on a magnitude of 600 percent to 1,000 percent of normal traffic levels,” according to the newly unsealed federal indictment of a pair of Moscow-based alleged cyberthieves.

Three days later, starting at 10:06 AM California time, the second D-DOS attack against Amazon began. This time, it took Amazon three days to fight it off. The filing also said one of the accused was found with data for more than 28,000 credit cards. But Emily Langlie, a spokesperson with the U.S. Attorney’s Office for the Western District of Washington, said none of the cards were from Amazon, eBay or Priceline, suggesting the payment-card protections did their job.…


JCPenney CEO: E-Commerce Is Going To Hit A Ceiling

July 25th, 2012
JCPenney CEO Ron Johnson believes E-Commerce is a toothless threat to stores. On July 18 Johnson told a conference audience he thinks that E-Commerce is like the catalog craze of the 1980s—its share of retail sales will eventually plateau, making it only a minor challenger to brick-and-mortar sales.

That theory is crucial to the century-old chain's makeover, which Johnson said will also include all-RFID sales ticketing within six months, elimination of cashwraps by the end of 2013, and a plan to combat showrooming by making 75 percent of its inventory JCPenney-only products to make direct price comparisons impossible.Read more...


Walgreens First To Map Every Store In A Mobile App. Now If Customers Just Knew About It

July 19th, 2012
Walgreens on Tuesday (July 17) announced that it has become the first national retailer to map all of its stores in a mobile app. That would certainly be good, were it not for the fact that it's unlikely many of Walgreens' customers will ever know about this.

That means no signage telling customers about it, no references on the retailer's Web site (and certainly not its homepage), no marketing, no reference in E-mails to customers and no associate training so that at least they can tell customers. The mobile map app itself doesn't even have Walgreens' name, so if a customer using either an Apple or an Android smartphone went searching for Walgreens, he or she wouldn't find it. The only way to download the Walgreens map app is for a shopper to happen to know to search for the vendor's name.Read more...


Amazon Same-Day Delivery? Stores Not The Target

July 18th, 2012
This week saw a wide range of media reports stating that Amazon, thanks to its recent state tax deals, may offer shoppers same-day delivery and that this, as one Slate headline said, "will destroy local retail." Just a few problems: First, the tax deals are years in the making and have little to do with this. Second, no, Amazon offering same-day delivery won't mean the end for almost any retailers. How do we know? That's the third point: Amazon has already been delivering products same day—for more than three years.

There are a lot of interesting twists involved in this same-day delivery strategy—including some unusual ways one Amazon insider said the master site could deploy it—but there's a bizarre trend here.Read more...


Amazon’s Latest Pricing Glitch: What Will It Take For Third-Party Controls To Be Put In Place?

July 18th, 2012
On Tuesday (July 17), a wide range of third-party products on Amazon showed special pricing: one cent. The pricing glitch was, yet again, caused by some third-party integration and a coding error. How many third-party hiccups will Amazon—not to mention every other major E-Commerce site—suffer prior to putting in place serious checks before partners can do some serious damage to Amazon fundamentals?

A lot of Amazon sellers will have a lot of cleanup to do, but there's a bigger issue here. Customers who go to Amazon had their orders canceled and, third party or not, that's going to undermine their faith in Amazon. Buying from a third party on Amazon's site is supposed to be the best of both worlds: a chance to give business to small players while enjoying the security and reliability of the Amazon environment.Read more...


Best Buy’s Security Alert: Good Letter, Lousy Link

July 18th, 2012
If there's an art to warning E-Commerce customers about security problems, Best Buy may need a course in Remedial Security Finger-Painting. This month, the chain sent an E-mail to an unknown number of its online customers warning that logins and passwords stolen from other sites were being used in an attempt to hijack bestbuy.com accounts. But the letter managed to convince at least some customers that the E-mails were phishing spam.

The problem: Links in the letter that customers were supposed to use to reset their passwords—but those links clearly weren't going to bestbuy.com. The irony: In trying to fix a situation where customers' passwords were stolen for bad purposes, Best Buy's letter was inadvertently crafted such that it looked like an attempt to steal customers' passwords for bad purposes.Read more...


How Real Are Facebook Likes? It Turns Out Not Real At All

July 17th, 2012

Just about everyone involved in E-Commerce knows deep down that social media “Likes” are not indicative of anything and that even most consumers are not impressed with lots of Likes. But it’s nice to see concrete proof every now and then. And so a report on July 13 was quite interesting. The BBC piece described an experiment where a reporter created an entirely non-existent business, which he called Virtual Bagel, with a tagline “We send you the bagels via the Internet. Just download and enjoy.” The reporter observed, “Seems like nonsense. Surely, nobody is going to be interested in that.”

Well, some 3,318 Facebook Likes later, the BBC found that the Likes were coming overwhelmingly from Malaysia, India, Indonesia and Egypt with almost none from the U.S. and the U.K. “People in certain parts of the world are incredibly keen to click, for no apparent reason, on random” sites such as the bagel “imaginary business,” the BBC report said. When it comes to exposing the absurd claims of social site Likes, I think it’s safe to say I like this BBC report.…


Is JCPenney Dumping The Datacenter?

July 12th, 2012
JCPenney's IT layoffs announced on Tuesday (July 10) aren't just the next shoe dropping after the 1,100-store chain's COO publicly shredded its IT operations in May. The job cuts—which now represent more than one out of every four headquarters IT staff, according to JCPenney sources—also signal that the retailer is preparing to dump a huge part of its current IT operations without necessarily having anything ready to replace it with.

The purge also sets the stage for the chain's "new technology platform" that CEO Ron Johnson said will be announced in August. From all indications, the focus will be on mobile and in-store, not the datacenter.Read more...


Best Buy’s Customer Satisfaction Problem: How To Measure Happiness

July 11th, 2012
Best Buy has been busy telling investors of its plans to give bonuses to store associates when good customer-service scores are found, in addition to bonuses for strong sales. At a glance, this is commendable and could be a sign the chain now understands that the only true way to fight showrooming—and, ultimately, to survive at all—is through much happier customers.

But dig deeper into the vague statements and it's unclear if any of those happy conclusions are warranted. It might be that the only meaningful bonus involved here is the one Best Buy had hoped Wall Street would give it for even talking about customer-service score bonuses.Read more...


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