Will Warranty Enforcement Be Amazon Marketplace's Achilles' Heel?

When it comes to competing against Amazon, eBay or even Japan's Rakuten, one of the more challenging aspects is their third-party marketplaces, which give each a seemingly endless inventory at minimal risk. But the odds may be getting more even, as shoppers are starting to notice that some manufacturers are strictly enforcing their authorized reseller rules.

The immediate impact on shoppers is they may find that the expensive flat-screen TV, surround-sound speakers or refrigerator that looked like such a bargain on Amazon voids the warranty. The arguably-unrealistic expectation from consumer goods manufacturers—which sharply strengthens the hands of traditional e-tailers trying to fight against these third-party marketplaces—is that shoppers would not only notice the actual name of the merchant shipping the item, but would take the time to run that name on the manufacturer's site to see if they are truly an authorized reseller. Or they could just make the purchase from or and know for certain.

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Amazon’s Way Of Not Charging Until The Gift Is Fully Accepted

June 13th, 2012
Amazon was just issued a Patent for a way to let gift recipients decide if they want—and will redeem—their gift before charging the gift-giver. What Amazon describes in U.S. Patent 8,190,519 is solely intended to deal with digital gifts (music, films, E-books, games, ringtones, etc.), but there's no technological reason why this "no pay until the gift is accepted" approach needs to exclude physical products.

Although Amazon proposed this back on Sept. 30, 2008 (the patent was issued May 29, 2012), the problem it was trying to address still exists today. That would be giftcards that are never used, robbing the gifter of cash, the giftee of the gift and the retailer (depending on whether it was that retailer's giftcard) of the revenue and upsell potential.Read more...


Walmart, Safeway Fighting For Control Of .Grocery

June 13th, 2012
There's a .grocery domain in our future, and Walmart and Safeway are fighting over which chain will control it, while Amazon and Google battle to own .buy, .shop and .store. On Wednesday (June 13), the organization that oversees domain names—ICANN—unveiled 1,930 applications for new top-level domains to use instead of .com, and the list includes some of the biggest retail chains—and doesn't include even more big chains.

The retailers who shelled out $185,000 per name to buy their E-Commerce sites' domain names all over again include Macy's, Gap, TJX and Home Depot. But Kroger, Walgreens, CVS and Lowe's gave the vanity domains a pass.Read more...


Debenhams Pushing Free Wi-Fi Chain-Wide. A Different Strategy Or A Different Environment?

June 13th, 2012
As mobile in-store is becoming a more critical issue, the need for Wi-Fi has ironically lessened. That's because of increasing penetration in major areas of 4G. Some chains—such as Eddie Bauer—are opting to do without Wi-Fi entirely, while others believe it's essential to make sure the mobile performance is fast.

Debenhams, a $4.2 billion chain with 167 stores across the U.K. and Ireland, sees it differently and argues that free Wi-Fi—which the chain will shortly announce chain-wide—is crucial. Is this a U.S.-U.K. difference or a difference in strategy?Read more...


Amazon’s Retail Influence Is Huge, And Rarely Understood

June 13th, 2012
Maybe retail chains have been worrying about Amazon for the wrong reasons. The usual E-tail advantages—no sales-floor replenishment problems, no sales tax, no slippage—combined with Amazon's huge size can make it seem like pure-play online retail is Amazon's secret sauce. But this story, published by Retail Week, StorefrontBacktalk's new U.K. content partner, suggests Amazon's real ace in the hole is CRM data—specifically how Amazon obsessively analyzes it to understand how, why and what customers buy.

The piece quotes former Amazon Principal Engineer Darren Vengroff saying, "mountains of data and hundreds or thousands of experiments" are behind every new Amazon play, no matter how small. Chains have much of the same data, but they leverage it to hand out coupons one customer at a time. Amazon does it wholesale, slicing and dicing to identify whole new lines of business to invade. Read more...


Google’s Retail Change, From Free To Paid, Is Rightfully Scaring A Lot Of Merchants

June 7th, 2012
Given Google's strong dominance in the search world, coupled with the huge amount of E-tail business that comes in via Web searches, it's understandable that whenever Google tinkers with anything that might possibly or perhaps could impact that traffic, retailers get nervous.

Well, Google is preparing some major changes to a relatively small merchant area of its site. The fear is that, despite whatever assurances Google offers, the Domino Effect of this decision will impact Google's main search listings. And where Google goes, Bing and Yahoo are sure to follow.Read more...

Eddie Bauer: With Mobile, Less Really Is More

June 7th, 2012
In recent months, the retail mobile mantra seems to have been that more is better. Whether that's small chains pushing functionality as far as they can or chains trying to get involved in as many trials as they can. Jamba Juice, for example, is citrusing it up with mobile efforts with PayPal, Google Wallet and ISIS.

But 337-store apparel chain Eddie Bauer is going against the trend, deliberately opting for a minimalistic approach. No Wi-Fi in its stores, no in-store product location, no geolocation to locate stores and no mobile app at all. With a primarily female demographic aged 35–55, Eddie Bauer Digital Marketing Director Michael Saracino talks up his chain's new mobile site and said he is focusing on what he calls mobile's "practical features."Read more...

Oracle’s Patent Play: Go Ahead, Make Larry Ellison’s Day

June 6th, 2012
Oracle has jumped into an E-Commerce patent fight with guns blazing, asking a court to invalidate patents that have been used to sue Walgreens, Best Buy, Sam's Club, CVS and other large chains in the past year. The lawsuit, filed on June 1, says Oracle's customers are being sued or threatened for using its Web-commerce products, including its live-chat support feature.

What's unusual isn't that Oracle is stepping up to defend its customers. It's how the database giant is doing that: by using its initial court filing to list dozens of previous patents that, Oracle says, prove the Patents-in-Suit should never have been issued.Read more...

The Subway Data Breach, A Millionaire Hooters Waitress and Grape-Flavored Romanian “Protection”

June 6th, 2012

It’s certainly not unusual in federal cybertheft cases for the feds to use honeypot tricks to get overseas suspects to bring themselves to the U.S. And in the case of the massive data breach that hit the Subway fast-food chain last year, the Secret Service acted no differently. But this particular tale of extradition—involving a made-up millionaire woman who waited tables at Hooters for the benefits and the enjoyable customers and one suspect who brought into the States “three very large boxes of grape-flavored Romanian” (protection, he said, for the benefit of avoiding SPAM filters. Suffice it to say, they were rubberized)—is a little odd.

The story, from KrebsOnSecurity, tells the strange tale of getting two of the accused Subway cyberthieves to come to the U.S. without needing to be extradited. One was tricked with the offer of a free casino weekend; he left the plane carrying some clothes, money, jewelry and those fruit-flavored tax-deduction preventers. Asked if they were really grape-flavored, the suspect’s lawyer, Michael Shklar, confirmed they were. How was he so sure? “They’re sitting in my own damn file room,” he offered. As for the millionaire Hooters waitress, not sure what the Secret Service was thinking. Maybe, “He’ll believe it, because it’s such a ludicrous thing to make up”?…

Most Consumers Use Alternative Payments On Mobile, A Complete Reversal Of Desktop Pattern

June 6th, 2012
When an E-Commerce firm this week analyzed two months of recent online shopping data (for all of April and May), it found an interesting disconnect between shoppers using a mobile device versus those using a desktop device. When using a laptop or desktop, 62 percent of shoppers used a payment card, with the remaining 38 percent going for an alternative payment (PayPal, Amazon Payments, Google Checkout, etc.).

But when those same shoppers worked with the same retailers using an iPhone, iPad or Android device, 67 percent of them opted for alternative payments.Read more...

Teen-Focused Apparel Chain Turning Web Outages Into Sales Promotions

June 6th, 2012
Delia's, a 113-store national apparel chain (stores in 33 states, almost all in malls), is trying to master finding the sales promotion silver lining inside various Web crash clouds.

On at least three occasions over the last several months, the chain's site suffered a non-trivial outage. It happens. But Delia's cleverly turned these outages into a marketing opportunity by sending an E-mail to all of its customers, where the chain apologized for the outage and offered to show its sincerity by offering free shipping on all products—but only for a couple of days, if that. It's almost as though this was a promotion that Delia's had always wanted to run and simply used the outages to make it seem more special.Read more...

Switchable Grocery Checkout Lanes: The Complications Aren’t Obvious

June 6th, 2012
The U.K.'s second-largest grocer is experimenting with checkout lanes that can quickly be switched from cashier-staffed to self-service. The 520-store Asda chain, which is owned by Walmart, is expanding a one-store trial of the quick-switch lanes to four stores and reporting that a "surprisingly high" percentage of customers are choosing to use the new lanes.

At first glance, this looks likely only to expand the problems self-checkout already generates: theft, slowdowns when associates have to verify age for alcohol or tobacco, and equipment that's simply frustrating to customers. But opening up all unstaffed lanes as self-checkouts might actually make self-checkout work better.Read more...

U.K. Grocer Turns Warehouse Management Dashboard Into A Video Game?

June 5th, 2012

Flashy customer-facing technology is fine, but it’s nice to see a retailer giving employees something shiny to look at, too. U.K. online grocer Ocado is now using what looks like a 3D animated video game to give managers a better view of highly automated warehouse operations. Managers can “fly through the warehouse and see what’s happening in bright video-game-like colors,” a Bloomberg report said.

A “first-person grocer” may sound silly, but consider a typical software dashboard—nothing but numbers and acronyms. Even if a problem flashes red, it still takes time for a manager to identify what the numbers mean. Ocado’s system uses analytics to flag any efficiency problems in the 295,000 square foot distribution center; the game graphics are then used to render views of the problem. Like Kroger with its self-checkout tunnel, Ocado built this system itself, because no vendor offered the type of software it needed for DC management. No word on whether Ocado, like Kroger, plans to market its homegrown system to other E-grocers. (Or maybe just polish it up and sell it to video gamers. If they’ll buy baseball and auto theft, there’s gotta be a market for warehouse operations.)…

The Next Batch Of Monthlies Barely A Week Away

June 5th, 2012

Just a reminder that StorefrontBacktalk now has five free monthly newsletters, each one focusing on a different key area for us: E-Commerce, Mobile, PCI/Security, In-Store and CRM. The Monthlies—see the descriptions here—are available to anyone via a quick E-mail sign up.

The Monthlies publish the first half of each month, and they are a great way to catch up on all of the news in a given area. So before you miss the June Monthlies, sign up for your free copy. …

A Touch Of Class Action

June 5th, 2012
Retailers have won a major procedural legal victory against credit-card issuers when a federal appellate court in New York refused to force them to individually arbitrate claims against the financial institutions, despite the existence of an arbitration agreement that mandated such arbitration. The litigation creates a split among federal courts regarding the enforceability of these mandatory arbitration agreements when they conflict with other federal laws.

But the merchants' victory may be a Pyrrhic one, pens Legal Columnist Mark Rasch, because consumers may use the same rules to invalidate arbitration provisions and file class-action lawsuits against the merchants themselves. Read more...

PayPal: Chains Get PINs, Small Fry Get The Good Stuff

May 31st, 2012
PayPal's strategy for its retail mobile payments program is clearly a two-tier approach. For large chains—the existing Home Depot rollout plus imminent deployments from JCPenney, Abercrombie & Fitch, Toys"R"Us, Foot Locker and Barnes & Noble, in addition to 10 others—the mobile services will be barebones, identical to the phone-number-and-PIN system that Home Depot is using.

The more interesting PayPal mobile capabilities, such as displaying a headshot to confirm customer identity and alerting the store as soon as a registered customer walks in, are only being offered for much smaller retailers, typically one-location boutiques.Read more...

Could The BlackBerry Save Mobile Payments? Maybe It’s The Only Thing That Can

May 31st, 2012
Everybody is waiting for Apple in NFC mobile payments—the theory being that the iPhone's try-anything-if-it's-Apple owners will embrace tap-to-pay as soon as the company endorses it. But Apple is in no hurry, and Google Wallet and ISIS aren't exactly taking off, while PayPal prefers phone numbers and PINs. The one player desperate enough to jumpstart NFC mobile payments may be RIM.

Yes, everyone hates the last-generation E-mail king, which on Tuesday (May 29) announced an operating loss and layoffs. But earlier this month RIM also finally agreed to let carriers and banks use NFC-enabled BlackBerrys for payments in Canada—without coupons, ads or a cut for RIM.Read more...

Faced With Soaring Fraud, Shell Oil Pays Each Franchisee Gas Station $400 To Boost Security

May 30th, 2012

When Shell Oil got fed up with the soaring fraud rate at many of its gas stations, it prioritized deploying better security. But faced with the franchisee conundrum that Shell didn’t own the systems it wanted to upgrade, it took the unusual move of paying the owners $400 per station to install new locks. It initially offered only $250, but franchisees weren’t moved.

This followed Shell having created “its own test lab to replicate fraud and try out new deterrents,” according to a report in CSPNet. StorefrontBacktalk Retail Columnist Todd Michaud, who has managed IT for several franchisee chains, said the resentment of franchisees regarding IT is legendary. “Most franchisees feel that IT spending belongs in the same level of hell as the IRS. Even if the spending shows to have significant benefit attached, too many failed projects, broken promises and over-inflated ROI tied to past projects haunt the decisions of today,” Michaud said. “Many times, franchisors are left with no options but to incent or even fund the technology investment to make it happen. Unfortunately, most franchisors feel as strongly about not paying for franchise IT as the operators do themselves. In this case, my guess is that the incentive to the jobbers far outweighed the” damages from continued fraud.…

The Danger Of Comparing Mobile Stats

May 30th, 2012
You say potato, I say integrated mobile commerce infrastructure. Three reports released this week illustrate that however much confusion exists today about mobile commerce terminology, there's always room for more. When you see mobile projections, think hard and ask a lot of questions before you paste the data into a PowerPoint. Let's start with Tuesday (May 29): Two respected marketshare companies, Gartner and IHL, released reports about the mobile market.

Gartner said: "Worldwide mobile payment transaction values will surpass $171.5 billion in 2012, a 61.9 percent increase from 2011 values of $105.9 billion." Within minutes, a statement from IHL said: "Mobile in all aspects of retail is now a $5.5 billion market worldwide."Read more...

Mobile POS Moves Forward, With MasterCard’s Blessing

May 30th, 2012
PCI Columnist Walter Conway has just seen the future of mobile point of sale (MPOS), and he thinks those ubiquitous plug-in card-reading dongles may be winning. It doesn't matter that these MPOS approaches pose risks for cardholder data, that the payment applications are not PA-DSS validated or that they are not part of a point-to-point encryption (P2PE) solution as recommended by the PCI Council.

MasterCard on May 23 released formal guidance giving retailers a roadmap to implement MPOS using smartphones, tablets and other devices equipped with a "card reader accessory." The problem? The recommended best practices may not be PCI compliant and they conflict with MasterCard's own rules, as the card brand acknowledges.Read more...

Should Retailers Fight For Their Customers’ Privacy? Only If You Like Having Customers

May 30th, 2012
When Ford Motor Company, investigated the sale of counterfeit parts on eBay, it subpoenaed seller records from these companies. What it did next, although perfectly legal and even reasonable, may have troubling implications for commerce and privacy. Because the Dearborn, Mich., automaker did not want the sellers to know they were under investigation, pens Legal Columnist Mark Rasch, Ford got a court order not only requiring eBay and PayPal to pony up the records but also removing the requirement that eBay and PayPal tell the sellers that Ford wanted their names, addresses, records of sales and bank account information.

Remember those pesky privacy policies that say, "We will never give out your information without your knowledge or consent?" Well, not so much.Read more...

Inspections Should Be A Standard For Any New CIO

May 30th, 2012
As an IT leader, Retail Columnist Todd Michaud's least favorite phrase from his business partners is, "Well, can't you just simply…" No matter how someone finishes that sentence, the answer is, "No." The implication being that this person in Operations, Marketing or Finance believes he or she knows a simple way to solve the problem at hand. But it is never that easy. If it was, it would have been done already.

One of the biggest reasons CIOs fail—and, as a result, have such a high turnover rate—is the ghosts of decisions past.Read more...

Sears Learns That Merged-Channel Is All About Visibility. And If Systems Are Flawed, You Don’t Want That Stuff Visible

May 30th, 2012
Sears has been going through a rough patch these days, but a recent detailed customer complaint about how a ship-to-store order was handled is illustrative for reasons that go far beyond this retailer. It's a powerful reminder that what makes merged-channel work is visibility through tech automation, provided that what is visible is actually correct.

As chains become more merged-channel and outright encourage customers to fly back and forth between mobile, in-store, online, call centers and Twitter interactions, the lack of visibility into real-time inventory is going to create headaches much worse than mere out-of-stocks.Read more...

Budget Cutting Threatens Retail-Friendly Government Data

May 23rd, 2012
One of the most useful sources of customer and retail business information could become a casualty of the budget wars in Washington, D.C. On May 10, Republicans in the U.S. House of Representatives passed a budget package that eliminates funding for the Census Bureau's American Community Survey (ACS), which collects large amounts of data useful to retailers under the census's umbrella.

What's particularly alarming about this exercise in budget-cutting theater is that data from the ACS couldn't be accurately generated by private-sector surveys. At a time when retailers can finally sift through huge datasets cost-effectively, this one could disappear.Read more...

Gap’s Piperlime Problem: Online To Stores Isn’t So Easy

May 23rd, 2012
Moving a brick-and-mortar retail chain online is a pretty well understood process at this point. Gap is now facing the opposite problem: how to turn its online-only Piperlime store into a brick-and-mortar business. The verdict so far: This isn't as easy as it was supposed to be.

The irony is that opening new store brands online is easy, once a chain has its E-Commerce presence up and running. Infrastructure can be shared, and the challenge is mainly making the new brand distinctive. But if anything, going the other way is actually harder than opening a completely new physical-store brand from scratch.Read more...

Apple’s Mobile Payments: Not Bluetooth, But Maybe Closer Than You Think

May 23rd, 2012
Does Apple really plan to use Bluetooth instead of NFC for mobile payments? Probably not, but you'd think so based on the buzz over the past week from the Apple-watching echo chamber. The consensus: All iPhones and iPads now have Bluetooth built in. It will take years for NFC to get into enough phones to matter. Ergo, Apple will use Bluetooth for its mobile wallet and sweep the table.

That's unlikely—if widely deploying a technology was the problem, contactless cards would have wiped out magstripes years ago. But will Apple use Bluetooth for payments? We may know by the end of the summer.Read more...


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