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.

Top Stories


The Analytics Hole: Does Anyone Connect The Dots From Mobile To Web To In-Store?

May 2nd, 2012
Retailers spend an awful lot of time and money gathering and analyzing online and in-store stats about customer behavior. But what most seem to not do is try and connect the dots.

What did the shopper do right after scanning that barcode? If the answer can be found in mobile analytics data, you're fine. But if the answer can only be found by overlaying that mobile data with in-store CRM data, most won't see it. What about synching E-Commerce activity with calls to the call center two minutes later? Or linking an E-Commerce search to an in-store POS action 20 minutes later? How about social activity matched with any of the above?Read more...


John Lewis’ Mirror Trial The Latest In A Long Line Of Frustrated Efforts

May 2nd, 2012
For a half-dozen years, retailers have been struggling to find a way to make mirrors work as an in-store-to-Web sales device. Bloomingdale's was one of the first. Its idea was to let a shopper model prospective new outfits to the mirror, which would then transmit the images live to the Web and allow comments from total strangers or a smaller group of logged in friends.

Seems that it missed the fun social elements of physically shopping together. This week, it was British department store chain John Lewis' turn.Read more...


Macy’s, Amazon CFOs Say The Darndest Things

May 2nd, 2012
Two major retail CFOs in the last week both spoke with unusual candor. The Macy's CFO admitted how much she doesn't like coupons, but said that efforts to minimize them are doomed to fail.

And Amazon's CFO offered two interesting stats: One shows that Amazon is collecting a lot more state sales taxes than is generally perceived, and the second reports that almost 40 percent of Amazon's sales these days are not from products the E-tailer directly sells.Read more...


Wacky Legal Idea: Using Class-Action Lawsuits To Gather CRM Data

May 2nd, 2012
Here's your wacky legal strategy idea of the month: Settling a mostly frivolous multimillion-dollar lawsuit can be such a great CRM data generation mechanism that companies might consider filing such class-action suits against themselves. One recent class-action settlement delivered more marketing value to the defendant than it could have ever hoped for, pens Legal Columnist Mark Rasch.

That defendant is using the litigation to collect consumer information. It is learning the names, addresses, E-mail addresses and some purchasing habits of not only actual consumers but, presumably, about people who never bought the product and yet are interested enough (in either the product or the $20) to lie about having bought the product. There doesn't appear to be any limitation on how that information can later be used for marketing.Read more...


“Careless” Systems Integrators Now Directly Under PCI DSS

May 2nd, 2012
Mistakes made by careless or incompetent payment application installers or system integrators have led to far too many data breaches over the years. In each case, even though the reseller or integrator made the mistake, the merchant bore the ultimate responsibility.

Unfortunately, system resellers and integrators formerly fell in a governance gap in PCI, and their actions were outside the PCI Council's jurisdiction. PCI Columnist Walter Conway says "were," because that situation is about to change.Read more...

Considering An Operations Person For An Open IT Position? Don’t Do It

May 2nd, 2012
Operations often complains that the IT team is too disconnected from the business to perform at the highest levels. Business leaders clamor for IT staff who can talk about retail operations and back-office management, not just about information security and system availability, pens Retail Columnist Todd Michaud.

Every so often, an opportunity arises to fill an open IT role with someone from Operations who has "technical aptitude." In an effort to keep the peace, a lot of IT leaders make the mistake of accepting a transfer from the Operations team rather than hiring an outside IT resource. Although it sounds almost "romantic" in design, in my experience, it almost never works out.Read more...

Walmart’s Online Cash Creates New Fraud Problem

May 2nd, 2012
When Walmart launched its E-Commerce cash program on April 26, did it open the door to evil-minded rivals by giving them the means to falsely lock up merchandise? That is just one example of the many implications behind Walmart's move to enable people to use cash to make online purchases.

Beyond new security holes on the risk side, the reward side is equally huge. While everyone seems to have focused on the general unbanked audience, a much more interesting prospect for this program is teenagers. Plus, this is sort of an anti-showrooming move, where online shoppers are being lured into the stores. Revenue sharing between Walmart channels is also a point of nervousness with this program. And a store's inability to cancel such online orders—even if the customer then finds the item on the shelf—is problematic, too. This is a rare example of the kinds of compromises—between online and in-store operations—chains must make these days.Read more...

The Privacy Triple Play: Digital Giftcards Using Facebook Data And Geolocation

May 2nd, 2012
The challenge of giftcards has always been getting customers to remember them when they're actually near the store where they can be used. With that goal in mind, a giftcard service—working with Gap and Sephora—is trying for a marketing triple play: mobile geolocation on top of Facebook data on top of customized giftcards. When a customer is near a retailer whose giftcard they have, it will loudly flag that fact to the customer.

The geolocation opt-in alerts are an interesting twist, especially when a consumer is walking in a city (locally or when traveling) and has no idea that a particular retailer has a store three blocks to the right.Read more...

Google Trusted Stores Is Perhaps Too Trusting

April 26th, 2012

Google is trying to expand its Google Trusted Stores program—where participating retailers give Google average shipping times and Google grades them on customer resolution issues—by letting merchants display the results in Google ads. But there’s an issue with the Trusted Stores program itself, and it speaks to trust.

The idea that this is a good guide for consumers to find responsive retailers has two hurdles. First, retailers who know they have issues would simply opt to not participate, which itself skews the results, along with the fact that many merchants (especially smaller ones) are unaware of it. Second, there is little to no verification of the results. Beyond delivering misleading or outright wrong figures for customers, it does a disservice to honest retailers. Without verification and a much more representative sampling of retailers, it’s not clear how meaningful these declarations—whether or not they are on Google ads—can be. …

Walgreens’ Searchable Database Of Employee Expertise Has Huge Potential

April 26th, 2012

On Tuesday (April 24), Walgreens rolled out what it calls the “first online find your pharmacist” search tool. The idea is that different pharmacists have different backgrounds, different specialties, and this approach enables customers to connect with someone best suited for their medical issues. Whereas this specific app is narrowly focused on drug stores, could the concept work in other areas of retail?

What if chains asked all associates to pour into a database their specialties and backgrounds? What if a Best Buy site could steer you to a store and a specific associate who owns—and is, therefore, highly familiar with—your specific surround-sound system? What if you are a cross-country athlete and want to find a Sports Authority associate who is an expert in that specific sport? Perhaps the database might reveal a much more narrow area: A Macy’s associate who is familiar with Irish wedding gift traditions. A Home Depot employee with experience restoring Victorian mansions. The idea of creating an extensive, searchable database—Web-accessible, too—of all of your associates’ experience and expertise seems relatively low cost with two huge upsides. One: Possible new sales. Two: The very act of creating such a database sends out the message of credibility and a true desire to help the customer. …

IKEA’s Clever Banner: Ugly, Difficult To Use And Utterly Perfect At Making Its Point

April 26th, 2012

One of the problems with Web ads that try to be clever or funny is that they are rarely strategic. So they might be really funny—and get passed along to many prospects—but customers remember the situation and not the brand. Or they remember the brand, but not any positive attribute. IKEA, though, has crafted an almost unreadable Web ad that is positively brilliant at making its point.

The point of the campaign is that IKEA makes a wide range of furniture to fit in almost any space. So in what the chain is calling “the smallest IKEA store in the world,” it has made a 10.5×8.8 centimeter banner ad that literally lists some 2,800 products. It’s done by mousing over parts of the ad to reveal more and more products. In this rare situation, the Web ad is ugly, difficult to use and utterly perfect at making its point. IKEA discussed it in a one-minute video.…

Best Buy Express Kiosk Acting Very Differently Than It Was Supposed To

April 26th, 2012
Best Buy will "reexamine our processes around the Express kiosks" after an embarrassing column from a Time Magazine writer, who just happened to try one of the machines at a Hilton in Chicago. The tested Best Buy Express kiosk—which is owned and handled by a vendor that also creates them for Macy's and Apple—referred the customer to "a store representative" even though there obviously were none, offered an electronic receipt but then forced a written one and, most critically, offered significantly stricter rules for product return.

All this despite a rule that the kiosks are supposed to have the same policies as Best Buy stores. This situation also renews questions about how much—or how little—control retailers should have over kiosks that loudly proclaim their brands.Read more...

Sears’ Move Into IT Services: A Baffling Step If You Think Of Sears As A Retailer

April 25th, 2012
Sears on Tuesday (April 24) launched a service to provide managed technology services for "brick-and-mortar enterprises across all industry verticals." It is a move partly aimed at Amazon's cloud service, with Sears promising much more customization and hand-holding. For many retail observers, this was a baffling step, another non-strategic distraction at a time when the 119-year-old retailer needed to do nothing more than focus on selling more products in its stores.

For Sears, though, the move made fiscal sense. With all of those dollars invested in IT systems—with more capacity than Sears needs—why not, in effect, lease out some of it? Put another way: Turn IT from a pure cost-center to a mostly cost-center that generates at least some revenue.Read more...

eBay’s Love-Hate Relationship With NFC

April 25th, 2012
eBay CEO John Donahoe, the man who popularized NFC standing for Not For Commerce, seems to have developed a love-hate relationship with near-field communication. He hates NFC and firmly believes it will never be adopted by large retailers, unless it is adopted by large retailers—in which case, he'll love it.

Oh, and Donahoe not only believes that NFC will never be adopted by large chains, but he has a specific prediction of when that adoption will happen—just in case he's wrong. And, no, we're not making any of this up.Read more...

eBay iPad App To Synch Auctions With TV Shows

April 25th, 2012
When we talk about merged channel, we're generally talking about the interaction of mobile, E-Commerce and in-store, plus perhaps some call center activity. But eBay is now prepping an app that is trying to overlap mobile—in this case, an iPad tablet—with television.

eBay CEO John Donahoe said the upcoming app is designed to function with specific TV shows, where it markets items that relate to the show. "You enter whatever channel you're watching and the TV show that you're watching. eBay inventory associated with that TV show pops up, and it's a very compelling experience," he said. How far could this go?Read more...

E-Nightmare: Minors May Not Have To Pay For Downloads

April 25th, 2012
In Mark Rasch's legal column this week, he points out that online purchases by minors are a potential legal nightmare and that a federal judge is now deciding the retail issue. But what if the case goes against retailers? Frighteningly, the way many digital purchases are processed makes it all but impossible to comply with the law.

How could iTunes refund an already listened to song or an already played game? That's not merely a business/profit question. From an IT perspective, there is often no mechanism to do it. What might start out as a legal problem will almost instantly morph into an IT problem.Read more...

Angry Nerds: The iTunes Youth Legal Nightmare

April 25th, 2012
It's not just those birds that are angry these days. The process by which Apple allows teens, pre-teens and even toddlers to download free apps, and then purchase game currencies within these free apps, may have landed the computer giant in hot water—with both parents and at least one federal district court in San Jose.

The case revolves around a longtime legal reality: Minors cannot agree to a contract. If they pretend to agree, it's non-binding and can't be enforced, writes Legal Columnist Mark Rasch. But what if an adult gives the child their password and permission to make a purchase? It's still the child doing it and the contract, therefore, probably can't be enforced.Read more...

Turning Back Office Into A Game, IT Style

April 25th, 2012
Why is it that the same people who will easily spend hours playing Angry Birds each week won't spend an extra hour improving their retail operations? Saving money just isn't sexy or fun. It's boring, and that's the biggest problem.

After many years in retail operations, Retail Columnist Todd Michaud is still surprised how little traction well-developed back-office applications receive. You would think that saving money on inventory, labor or marketing expenses would be all the motivation that a retail owner or general manager would need, but that rarely seems to be the case. That got Michaud thinking about some of the new social applications, like Foursquare, and what makes them successful: Gamification.Read more...

Home Depot’s SEO Furor

April 18th, 2012
What began as a Home Depot effort this month to get installers to boost the chain's Web traffic has morphed into a strange SEO Google mess, with a Home Depot E-mail encouraging those service providers to use invisible links on their sites.

This is not merely an issue of violating the rules of a major search engine. A lot of these partners—carpet installers, for instance—have minimal E-Commerce teams, which means they rely on partners such as Home Depot for E-Commerce guidance. And when chains give advice that is false and endangers the ranking of the sites of those partners, it is a problem.Read more...

Wal-Mart MoneyCard Break-In Offers Lessons For New Payment Tactics

April 18th, 2012
As retailers accelerate payment experiments, a recent Wal-Mart experience with a well-established approach offers a cautionary tale. A Buffalo, N.Y., woman this month walked into her local Wal-Mart, gave an associate $1,000 in cash and asked for it to be loaded onto a Walmart MoneyCard, in preparation for a vacation. A couple days later, the customer discovered that the money had been removed by a thief in another country.

The fact that it was a thief who stole the funds is undisputed. However, the immediate next actions of Wal-Mart and Green Dot—which manages MoneyCard for Wal-Mart—is a textbook example not of what should not be done, but how it shouldn't be done.Read more...

7-Eleven’s New Age-Verification Provides Proof For Police, But Is Far From Perfect

April 18th, 2012
7-Eleven on Monday (April 16) started a new age-check system, one that provides digital proof that a specific person's credentials were checked at a specific date and time. This will provide the nation's largest convenience-store chain with a new independent way to fight back when police say that an underage customer's driver's license had never been checked.

But it won't address many of today's age-ID problems, including waiving license checks if the associate thinks the person is old enough, license photos often being bad enough to fool weak authenticators, and under-age consumers using the driver's license of an older sibling. Still, 7-Eleven has crafted ways to deal with some of those gotchas with the new system.Read more...

With IBM’s POS Sale, History Really Does Make A Difference

April 18th, 2012
The POS industry on Monday (April 16) had the most significant announcement in the last 10 years, as Toshiba TEC announced the purchase of the IBM Retail Store Solutions Business. The fact that IBM RSS was for sale was one of the worst kept secrets in the industry among analysts.

Several years ago, when Tom Peterson was general manager of RSS, it was a much larger group than the $1.15 billion in revenue reported in the release. Pretty much everything that wasn't mainframe or core supply chain fit under RSS, writes GuestView Columnist Greg Buzek.Read more...

Supreme Court: Can A Retailer Resell Cheap Foreign Products For A Profit In The U.S.?

April 18th, 2012
Buy low, sell high. Pretty simple. But a case currently before the U.S. Supreme Court tests whether manufacturers can prevent retailers from buying their products for the lowest price simply by, for example, printing the labels for the products outside the United States.

Take the example of a bottle of L'anza brand shampoo, suggests Legal Columnist Mark Rasch. The manufacturer in California sells the shampoo for, say, $5 a bottle in the U.S., but sells the same shampoo overseas for only $3 a bottle. It is perfectly legal for a retailer to buy the genuine shampoo overseas, import it back to the U.S., and then resell it for a profit. But add a label to the bottle of shampoo, and the situation may change. Read more...

Unhappy With Your POS System? Take A Peek At Your Last POS RFP. Don’t You Feel Bad Now?

April 18th, 2012
As retailers—over the years—have asked for POS improvements, vendors have responded by baking changes into the core products. The problem is that the results are now over-burdened with so many options they are a nightmare to use, tragically difficult to support and wallet-emptying to purchase.

Retail Columnist Todd Michaud has a suggestion: Go pull out the last POS RFP you put together and see what percentage of requirements that were in the RFP are actually in use today. It's a safe bet you'll be surprised, especially if it was a long time ago.Read more...

The Sign Of POS Hardware End Times: IBM Sells All Of Its Point Of Sales To Toshiba

April 18th, 2012
When IBM on Tuesday (April 17) announced it was selling its entire POS business to Toshiba TEC for US$850 million, it was arguably the most explicit sign yet that the retail POS hardware business is on its last legs. Not IBM's POS business, but retail POS activity in general.

Beyond IBM's history of selling out key areas (printers, laptops, disk drives, etc.) a year or so before the market is about to die, this time it's the popularization of in-store tablets along with the integration of mobile and E-Commerce that is aggravating POS's demise. Retail Columnist Todd Michaud predicted in January that this year would see the death of the traditional POS. IBM apparently agrees. (Related Story: Unhappy With Your POS System? Take A Peek At Your Last POS RFP. Don't You Feel Bad Now?Read more...


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