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E-Commerce


Amazon’s Secret Weapon May Be A Mystery To Amazon, Too

March 20th, 2013
Is Amazon Marketplace really the E-tail giant's "secret weapon"? That's reportedly how a Walmart (NTSE:WMT) executive described it at a top-management meeting in February. Amazon (NASDAQ:AMZN) itself may not hold its collection of third-party sellers in quite such high esteem—especially since March 15, when two of them launched a class-action lawsuit complaining that Amazon routinely holds up payments it owes to the sellers.

In fact, Amazon Marketplace now brings in almost 12 percent of Amazon's retail revenues. But it also represents more than 40 percent of the goods sold on Amazon's site, which makes the Marketplace merchants both competition and a huge market-research pool for Amazon—and, potentially, a legal time bomb.Read more...


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NeimanMarcus.com’s Fake Faux-Fur Fiasco Draws A Real 20-Year Consent Agreement

March 20th, 2013
In what is probably a sign of the real-vs.-fake end times, Neiman Marcus agreed on Tuesday (March 19) to stop labeling real fur as "faux fur." According to a very real FTC complaint, between October 2009 and November 2012, the luxury chain's NeimanMarcus.com and BergdorfGoodman.com websites sold a Burberry jacket, a Stuart Weitzman shoe and an Alice + Olivia Kyah coat described on the sites as trimmed with faux fur, when actually the trimming was real fur.

Part of the reason Neiman Marcus got into trouble here is that it started selling the fake faux fur products less than six months after settling a previous FTC fake faux fur investigation. But the bigger problem may be the fact that physical stores have human beings who can catch some of these labeling problems before they become a federal case. Online stores don't.Read more...


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Is Target Trying To Become Amazon For Cooks?

March 19th, 2013
Target (NYSE:TGT) is quietly getting into the E-Commerce infrastructure business. The $68 billion chain announced last Thursday (March 14) that it is buying online cookery sites CHEFS Catalog and Cooking.com, both of which sell kitchenware and utensils. But Cooking.com also provides the backend for several high-profile celebrity cooking websites -- and Target apparently intends to keep its hands off that business as long as it keeps growing.

Keep in mind that it's barely a year and a half since Target could barely keep its own newly built E-Commerce site running, after a decade of having its E-Commerce operations run by Amazon (NASDAQ:AMZN). That's fresh in the minds of Target E-Commerce execs, so if there's any chain that can see an advantage to becoming a mini-Amazon for cooking websites, it's Target.Read more...


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Court: Retailers Not Bound To Online Promises. Their Shoppers Are

March 14th, 2013
A recent dismissal of a class-action lawsuit against the LinkedIn (NYSE:LNKD) social network raises the question of whether anyone is bound to keep the promises they make on their website at all. If taken at face value, pens Legal Columnist Mark Rasch, the court's dismissal means that companies are not bound to meet their own promised obligations but their customers are bound to comply with the Terms and Conditions of the website, whether they read them or not.

When LinkedIn premium customers Katie Szpyrka and Khalilah Wright learned that the website operator had been hacked, and that 6.5 million stolen LinkedIn passwords had been posted on the Internet (together with the user's e-mail address), they went to sue LinkedIn for failing to provide adequate security and appropriate encryption for these passwords. Because users frequently use the same passwords for multiple accounts, stealing their LinkedIn passwords and E-mail addresses might expose a host of other accounts to compromise. Read more...


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Walmart, Safeway, Amazon Share Same Domain Strategy: Mine, Mine, Mine

March 13th, 2013
Walmart (NYSE:WMT) and Safeway (NYSE:SWY) are each trying to privatize .grocery, so no competing chains can use it. Barring an unexpected change, one of the two will lock it down. Meanwhile, the spotlight has been on Amazon (NASDAQ:AMZN) for attempting to get exclusive use of .books. Other retail-friendly top-level domains (TLDs), including .toys, .kids, .tools, .shoes, .fashion and .food, are also in play.

That may not be as paranoid as it first looks. Amazon filed (and paid the $185,000 per TLD application fee) for 76 separate vanity TLDs—all of which it intends to restrict to Amazon and its subsidiaries. (Yes, we looked at all 76 applications.) Some of the most obvious TLDs retailers might conceivably be interested in—.shoes, .toys, .fashion, .jewelry and .tools—have no retailer applicants. They've all been applied for by companies that actually believe they can sell domain names ending with those TLDs. There's also .food, which is the focus of a three-way competition among two domain registrars and the Food Network, which wants to take it private. Amazon, Google and a Hong Kong foundation are each fighting for .kids. How likely is it that .book—owned by Amazon or anyone else—will have an impact? Barnes & Noble (NYSE:BKS) owns both book.com and books.com, which both redirect to the chain's own site. That doesn't seem to have given B&N much of a monopoly.Read more...


Privacy Sure Isn’t What It Once Was

March 12th, 2013

When it comes to softening up shoppers and making them more comfortable sharing personal information with retailers, nothing has done a better job than social media sites. Mobile devices, with their geolocation capabilities and continual beaming of “this is who I am” signals to anyone who chooses to listen, come in a close second. But a recent study has challenged that thinking. Understanding the nuances of how shoppers perceive privacy, what information they consider to be private and what incentives will work to make them give up data is crucial, whether it’s for a CRM (individual) strategy or to merely better understand shoppers in aggregate. With teen shoppers, the challenge is different. The tactic to get them to surrender a piece of private data has to start with understanding what they consider private. What Facebook and Youtube have indeed done is to make them think many of the most intimate details of their lives are not private. Hence, if you want their E-mail address, a one-time $5-off coupon may be all that’s needed.

This is explored in StorefrontBacktalk‘s March 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. You can also check out all of our recent Retail Week columns here.…


Dick’s Sporting Goods Takes A Different View Of Online Stats

March 12th, 2013
In a wonderful E-Commerce example of the time-honored "different strokes for different folks," executives at both Dick's Sporting Goods (NYSE:DKS) and Macy's (NYSE:M) saw the identical trend: Online, in-store and mobile sales are becoming hopelessly tangled. Macy's solution on February 26: Stop reporting online numbers. Dick's solution on Monday (March 11): Break those numbers out even more.

Here's how similarly both chains view the problem. On February 26, Macy's CFO Karen Hoguet said: "Candidly, it's getting so hard to know what's a store sale and what's a mobile sale and what's Internet. It's getting harder to figure out the lines between them." On March 11, Dick's CEO Edward Stack said: "We are making this reporting change because, as we build out our omni-channel platform, it is becoming apparent that the traditional sales channels are overlapping with the digital space and that providing comp sales on a combined basis will be more meaningful." But by "combined" Stack means that online numbers will be explicitly broken out. "We will continue to provide the size of the E-Commerce business as a percentage of total sales," he said. Stack gave the example that E-Commerce for this quarter was 8.6 percent of total sales, which placed online sales at about $155 million for the quarter.Read more...


Judge Rules That A Large Data Breach Is Not Proof Of Inadequate Security

March 12th, 2013
A federal judge ruled on March 5 that LinkedIn (NYSE: LNKD) is not obligated to compensate a pair of its customers who had sued following a LinkedIn data breach last year. Of particular interest to retailers is the customers' argument that the social networking site had promised to protect customer data "with industry standard protocols and technology." They then argued that the breach itself somehow proved such security was not delivered. The judge didn't buy it.

No security system is perfect, so the existence of a break-in—on its own—doesn't prove that security procedures were not followed nor that they were not appropriate. The case—heard in U.S. District Court for the Northern District of California in San Jose—raised several other arguments for customer seeking compensation for the breach, and the court shot them all down. To start the proceedings, the customers had to make a case for how they lost money as a result of the breach, given that it appears none of their personal information was ever used by the thieves.Read more...


Cracking The Code Of Amazon’s Instant Pulldown Menu

March 8th, 2013

Say what you will about Amazon (NASDAQ: AMZN), but it’s an impressive operation when it comes to sweating the details. One such design innovation from Amazon—it’s ultra-smooth, almost instantaneous-responding pulldown menus—was driving one developer crazy, until he (possibly) figured out how Amazon’s people did it. The developer is Ben Kamens, who is lead developer at Khan Academy, and this is his theory on the pulldown magic, along with his suggested code for replicating it. The trick appears to be not that different from Amazon’s gravity-based link assist Patent, where the system anticipates where the cursor is headed and opens the pulldown a split-second before the cursor gets there, making it feel like an immediate response.

Pulldowns have always been an efficient programmer tool

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(lots of content, minimal space), but never a shopper favorite. They are typically infuriating to use, with the submenus disappearing as the cursor tries to get there to click. Amazon’s approach fixes this issue, too, because the submenus politely stay there, assuming the shopper’s click will eventually arrive. Hats off to Mashable for first spotting this.…


You Know What Your Shoppers Did Last Summer

March 7th, 2013
If consumers make purchases both online and in brick-and-mortar store, you know a great deal. You have surveillance pictures of them in the store. You know what they purchased and what they looked at. You have browser information. If you subscribe to any of the dozens of data aggregation or marketing sites, you know whatever is shared. With "big data" you have aggregated this data, too. Now imagine if you had to tell each and every one of your customers exactly what you collected and what you did with that information. We mean everything.

That is already the law outside the United States and Canada, writes Legal Columnist Mark Rasch, and it may already be the law in those two holdout countries. It's a matter of interpretation.Read more...


Today’s Mobile Uncharted Territory Lesson: What Happens When Your Processor Is Ordered To Not Take Payments?

March 6th, 2013

Today’s frightening question: What happens when your payment processor gets into a legal fight and suddenly can’t process your transactions? This is likely to happen periodically with mobile payments, as patent violations and state revenue rules start to play out. As if to prove that point, Illinois is ordering Square to halt any payments processed within its borders, something that is not likely

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to sit well with Illinois Starbucks (NASDAQ:SBUX) fans—nor Starbucks itself, nor any other Illinois Square merchant.

The Illinois cease-and-desist order involves the ghastly accusation that Square has not obtained the proper state license, something that is complicated by the fact that Square is arguing it doesn’t qualify for that particular license. Square has been fighting this battle in other states, too, with varying results. This is just something to remember when mobile processors are pitching their extreme savings. When entering new, uncharted financial waters, the costs get lower as the risks get higher. This won’t likely be an issue in about two or three years. But for now, having one or two back-up processors is probably not a horrible idea.…


CMU: Consumers Have Sharply Reduced Public Data Sharing

March 6th, 2013
For years, conventional wisdom about privacy has been that shoppers—especially younger shoppers—have been consistently sharing more information online to the general public, a trend that would likely continue as privacy desensitization progressed. But a report released Tuesday (March 5) from Carnegie Mellon University found the opposite when it tracked 5,076 Facebook (NSADAQ:FB) users from 2005 through 2011, one of the most extensive studies of social media privacy yet.

"Over time, Facebook users in our dataset exhibited increasingly privacy-seeking behavior, progressively decreasing the amount of personal data shared publicly with unconnected profiles in the same network," the CMU report said. The implications for retailers are stark, suggesting that many of the privacy strategy underpinnings on both retail and e-tail may be flawed. The report also found that those same consumers started sharing more information during that period, but only with people they assumed to be in a private group. And that sharing was expanded "both in terms of scope and amount of personal data." For retailers trying to extrapolate insights from this report to apply to chain CRM and mobile programs, these two conclusions are frustrating.Read more...


Can Google Get Chains To Solve The $10 Delivery Ceiling?

March 6th, 2013
Google's same-day delivery service for retailers will reportedly have an Amazon (NASDAQ:AMZN) Prime-like twist: a fixed annual price. That could open up a wide range of options for chains, including retailers paying the yearly fee (expected to be between $65 and $70) for favored loyalty customers. That, in turn, might make the delivery service financially viable for Google (NASDAQ:GOOG) and retailers.

Google has been testing a same-day delivery service since last fall with several chains, limited to employees and a small number of other testers. The big problem is the one that all same-day efforts in the U.S. have faced: Even affluent customers won't pay more than $10 per delivery.Read more...


Best Buy’s 2-Year Site Rebuild: Will It Have A Target On Its Back?

March 6th, 2013
Best Buy (NYSE:BBY), the poster child for showrooming, has just discovered that its E-Commerce sites have big problems. On a March 1 earnings call, CEO Hubert Joly said the chain's multiple websites are unintegrated, effectively making multichannel retailing impossible. Best Buy's solution: patching up the current sites with improvements that will start showing up in April and launching a completely new E-Commerce platform in "a couple of years."

Joly didn't mention that the website problems date from Best Buy's long outsourcing arrangement with Accenture, which the retailer is quietly unwinding. But an all-new online platform that will take years to develop after a long period of outsourcing—what could go wrong with that plan? Oh, right—ask Target (NYSE:TGT).Read more...


Will Amazon’s Cursor Patent Lead To Manipulated, Unintended Clicks?

March 4th, 2013
In online, when does anticipating a user's likely move and making that move easier morph into imposing what the retailer wants the shopper to do? Can the programming power to make a site visitor's cursor go where the retailer wants—and to specifically click on what the retailer wants clicked, such as "click here to purchase"—be something merchants can be expected to be disciplined about using? This ethical and marketing question (now there are two words rarely seen together) is prompted by a patent granted to Amazon on February 26.

That patent discusses using what Amazon (NASDAQ: AMZN) calls "gravity-based link assist" to guide a cursor to where the system thinks the shopper wants it to go. And to do so more quickly than some systems can. Although the patent specifies that this approach can be used in laptops, tablets and a wide range of other devices, its initial focus is on ebooks. That is because of a very specific technical issue: ebooks often have much slower refresh rates, so slow that shoppers can be confused about whether they have successfully clicked a link.Read more...


Is Customized Pricing Brilliant Or An Imminent Disaster?

March 1st, 2013
A recent patent by search giant Google (NASDAQ:GOOG) may fundamentally change the sales process from a 21st Century marketplace back to a 7th Century shouk, with prices based on sellers' perceptions of who their customers are and what they are willing to pay, argues Legal Columnist Mark Rasch. There is a huge difference between "dynamic advertising" and "dynamic pricing." In the case of the former, he says as an example, he got an ad for a Toyota while his more affluent friend got an ad for a Lexus. Fine, he didn't want the Lexus anyway. In the case of the latter, he and his friend each got ads for the same Toyota Camry, but his friend's price was different from his. And that is based on what Google, and possibly the Internet, knows about his friend.

And if you go online to search for a better price? The results are "rigged." If you are showrooming at a Best Buy (NYSE:BBY), see a 60-inch LCD for $950 and scan the barcode for an Internet search for a lower price, Best Buy could pay Google (or others) not to deliver lower prices—either to the world or to certain profiled individuals.Read more...


At JCPenney, Everybody Gets A POS iPod In March

February 28th, 2013
All JCPenney (NYSE:JCP) associates will be able to do in-aisle checkout "within one month," the troubled chain's CEO said during an earnings call on Wednesday (Feb. 27). The move comes as 25 percent of sales transactions in the stores are already being done on mobile POS.

The 1,100-store chain is also a few months away from going live with a new financial system from Oracle (NASDAQ:ORCL, to be followed before the end of the year by merchandising, planning and allocation systems, all of which will replace legacy systems. That's presuming the board's patience with CEO Ron Johnson holds out—unlike most big chains, JCPenney's E-Commerce site isn't doing any better than in-store, and the chain lost $552 million during the last three months.Read more...


Macy’s Stops Reporting Online Stats, Blames Too Much Channel Blur

February 27th, 2013
Arguing that "the line between stores and the Internet is blurring so much," Macy's (NYSE:M) has become the first major publicly held retailer to stop reporting its E-Commerce stats. Setting aside the fact that Macy's would always see less disclosure—especially to rivals—as a nice thing, the move signals an important step for omni-channel/merged-channel retailing. The day when in-store, mobile and online are so intermixed that they can't be meaningfully broken out is the same day true merged-channel retailing has happened. For Macy's, that day happened on Tuesday (Feb. 26).

"Candidly, it's getting so hard to know what's a store sale and what's a mobile sale and what's Internet. It's getting harder to figure out the lines between them," Macy's CFO Karen Hoguet told analysts on Tuesday. When asked for some E-Commerce projections, she said: "I really can't give you that number. I mean, I don't know it. But clearly, the growth is continuing very aggressively. But sometimes, it's being bought on a mobile device sitting in a store. So I'm not sure how to define that."Read more...


Barnes & Noble Founder: It’s The Stores, Stupid

February 26th, 2013
One of the delicious ironies of merged-channel retail is how easy it is to lose track of the real business. When Barnes & Noble (NYSE:BKS) Chairman Leonard Riggio said on Monday (Feb. 25) that he wants to buy the chain's regular bookstores and E-Commerce operation, everyone suddenly took another look at what was presumed to be a dying brick-and-mortar business. Surprise! The stores are profitable. It's the Nook that's been bleeding the retailer dry.

The Nook was supposed to be merged-channel perfected: Buy anywhere, instant delivery, no DCs required. The physical stores were expected to be steamrolled by Amazon (NASDAQ:AMZN). Instead, Amazon has crushed the Nook, while B&N's stores (with no more competition from Borders) are hanging on. Welcome to Merged Channel 2.0—or possibly Merged Channel II: The Showroom Strikes Back.Read more...


Germany Wants Amazon To Loosen Its Third-Party Seller Restrictions

February 25th, 2013
German anti-trust officials are investigating the non-price-compete contract clauses at Amazon (NASDAQ:AMZN), which require third-party sellers to not sell anywhere else for less. If the agency finds against Amazon—the Associated Press quoted the agency head as saying there was "considerable" evidence that Amazon is indeed breaching cartel rules—and if the ruling spurs other agencies in other countries (including the U.S.) to act, then this has the potential to be very disruptive to Amazon. Those third-party sellers are crucial to Amazon's seemingly infinite inventory, and the ability to offer the lowest price is critical to Amazon's strategy.

"Amazon's price parity clause, under which sellers are deprived of their freedom to sell a product offered through Amazon cheaper on another Internet sales channel, could violate the general ban on cartels," said Andreas Mundt, the head of Germany's federal antitrust office (the Bundeskartellamt), on February 20.Read more...


British Department Store Allowing Online Shoe Returns At Gas Stations

February 25th, 2013

John Lewis, the huge British department store

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chain, is taking an interesting twist on E-Commerce returns. The idea of having free unlimited returns for online-purchased clothing and shoes (especially shoes) is well known, but the chain is trying to make it more hassle-free by allowing those free E-Commerce returns at more than 5,000 convenience stores, gas stations (OK, petrol stations) and newsstands. Returning too tight sneakers when you fill up for gas on the way to work?

The initial deal is limited to online purchases (no trying to return stuff purchased from a physical John Lewis store) and is further restricted to clothing, shoes and “fashion accessories.” (Wonder if the argument that an iPad Mini or a coffee machine is a fashion accessory would fly?) The John Lewis free shipping deal comes through a partnership with CollectPlus, a large U.K. parcel service. Completely non-coincidentally, the incoming E-Commerce chief for John Lewis—Mark Lewis—is the former head of CollectPlus. Regardless of where the idea came from, having a relatively quick and painless way to return those “looked good on screen but are in reality stunningly ugly patent leather pumps” is a good one. Anything that makes shoppers more comfortable with buying a lot of clothes on the chance that they’ll keep some …


Showrooming Showboating: If It’s In Context, It Wouldn’t Sound Good

February 25th, 2013
A showrooming study published on February 22 tries to make the case that Best Buy (NYSE:BBY), Target (NYSE:TGT) and Walmart (NYSE:WMT) are winning their battles against showrooming. But the lack of context makes a better case that showrooming is almost impossible to measure and might not even meaningfully exist. The study, done by ClickIQ, reported that all three chains saw fewer in-store shoppers eventually purchase online, when comparing 2013 data with 2012 data. What the study didn't explore was whether more shoppers were simply doing their online research first and then choosing to buy from an E-tailer.

To be blunt, the retail concern is whether Walmart and the like are losing more or fewer sales to Amazon (NASDAQ:AMZN) and the like, and this study simply didn't try to address that.Indeed, answering that question is the more likely next step for shoppers if these chains are losing the battle against so-called showrooming. After shoppers come into, let's say, Target repeatedly and then find that E-tailers repeatedly offer the same for less, those shoppers would simply stop bothering to even drive to Target and would go straight online. This study would interpret that outcome as a win for the physical stores—because the percentage of people who go into the store and then buy from the store would go up—when it's actually a clean loss.Read more...


Amex Experiment: Replace Cards Online With Passwords

February 22nd, 2013
American Express on Thursday (Feb. 21) took a page from both Apple iTunes and Amazon 1-Click, launching a program in India that allows online shoppers to use a password instead of having to type in card number, expiration date and security verification number. Beyond speed for shoppers, this approach takes all of that sensitive data out of the retailer's servers. The India rollout is the first test of this tactic worldwide.

The program, called ezeClick, was developed by the Amex India group and is being closely watched by Amex corporate. "We let each market develop what they need and what they think will work for them," said American Express Spokesperson Jim Tobin. "I assume it will start showing up in other markets."Read more...


Copyright Quagmire: Amazon’s Cloud Music Legal Dilemma

February 20th, 2013
In the retail legal quicksand that today's constantly evolving digital content rules are creating—remember California's Supreme Court saying this month that E-tailers can ask for Zip codes but physical stores can't?—Amazon (NASDAQ:AMZN) is now rediscovering that nothing is so complex and muddied that lawyers can't make it worse. The issue: downloadable content copyright and a delightful unintended consequence.

For years, Amazon has allowed shoppers who have purchased music CDs from Amazon to download and otherwise listen to audio tracks on an Amazon cloud for free. The legal copyright prerogative for Amazon to do this stems from the shopper owning the physical CD. But what happens when that customer no longer has possession of that CD? What if it's been given away or sold or destroyed or lost or stolen? All of a sudden, the legal basis for that copyright permission has vanished. And this gets a lot worse.Read more...


Abu Dhabi Addresses Go E-Commerce Friendly. Only 6 Billion More Addresses To Go

February 20th, 2013

Abu Dhabi is going to an E-Commerce-friendly street address system. The capital of the United Arab Emirates announced on Sunday (Feb. 17) that, over the next 30 months, every building will get a number and every street will get a unique name (in many cases a much shorter name, in part to satisfy the needs of online forms), along with a short postal code. Currently, streets may be known by multiple names. For example, 7th Street is also Zayed the First, but it’s commonly known as Electra. And although the street Abu Dhabians call “Bank Street” is lined with banks, it’s formally named Khalid bin Waleed Street. Even some new glass-and-steel hotels have addresses like “Between the Bridges.”

Although local couriers are currently able to navigate the city to make deliveries, U.S.-style addresses should simplify things for E-tailers using addresses or postal codes for things like payment-card verification. It’s also a useful reminder for E-tailers that online forms designed for U.S. addresses aren’t necessarily going to work well in the rest of the world. With its population of 2.4 million people and a per capita income just below that of the U.S., Abu Dhabi is hardly a little desert oasis. But having three names for every street may not be so bad—just ask anyone who has tried to find an address on Peachtree in Atlanta.…


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