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


Mobile-Payment Vendors Beware: Sing The Song Of Standards Or Get Out

November 10th, 2011
As the various mobile-payment vendors—including Google, ISIS and PayPal—try and woo retailers, they are finding the conversation repeatedly veering away from flashy functionality and into issues of standards compliance and providing specs that match what retailers are using today. Those are points of resistance, though, when the vendors desperately need to differentiate their offerings and to argue for critical time sensitivities ("you must trial this right now").

The retail chains, which hold most of the important cards in this game, are quite content to sit back and let the process take time. Cutting deals with whoever remains standing makes it slightly less risky anyway. We spoke with a few senior retail IT execs about their mobile-payment vendor discussions and the comments from two were the most illuminating. Dollar Tree CIO Ray Hamilton said he sees the tech limitations issues as already resolved ("I would prefer to pay with my smartphone than with a magstripe card—a crude, historic technology invented during my youth. Smartphones will have more than sufficient processing capabilities to encrypt data during the NFC transaction."). No, it's the standards issues that are his greatest concern, especially given that there are really hardly any significant mobile standards yet.Read more...


Wal-Mart, Costco, Kroger and Macy’s Discover The Cost Of Not Paying Enough Attention To Your Social Sites

November 10th, 2011
In retail, social media shares a very narrow attribute with CRM and Web analytics. All three were initially undermined because of the way they were sold to retailers. Specifically, the amount of effort required to extract value from them was criminally understated. A report this week showed the impact of such sales malpractice and slammed some of the largest retailers—including Wal-Mart, Costco, Kmart, Kroger and Macy's—for either ignoring complaints on their own Facebook pages or being ludicrously slow in responding.

Costco, Kmart and Kroger took the top dishonors, with each chain responding to zero of the complaints lodged against it during the review period (five working days in September). Wal-Mart ignored 41 percent of all legitimate complaints, Macy's ignored 35 percent of its complaints, Bloomingdale's ignored 20 percent, Nordstrom ignored 20 percent, Sears ignored 11 percent and Safeway ignored only five percent.Read more...


Macy’s Merged-Channel Inventory To Go Live In 2012

November 10th, 2011

Macy’s is testing a merged version of its brick-and-mortar and online inventory systems chain-wide, and it expects to go live with the new system early in 2012. On Wednesday (Nov. 9), Macy’s CFO Karen Hoguet told an earnings call that “we’re going to be able to do [chain-wide merged inventory] very soon. We’re testing it right now. And early next year, I think we’re going to start doing it more and more, with the systems we have today. Having said that, we are going to invest over time in better systems that allow us to maximize the inventory easier without as much manual intervention, but it’s not going to prevent us from doing the site to store to door.”

That merged inventory will presumably be the base for Macy’s item-level RFID efforts, which are slated to go chain-wide by 2013. Merged inventory could also smooth out some of the kinks in Macy’s Search-and-Send program, which lets one store access inventory from another store and have items shipped directly to a customer. That’s currently in only a few dozen stores, but it should be easy to roll out chain-wide once the merged-channel inventory is in place.…


Toys”R”Us Trial Shows Brilliance—And Folly—Of eBay

November 10th, 2011
Toys "R" Us is backing into in-store mobile payments by serving as the guinea pig for an interesting eBay trial. Smartphone-equipped toy shoppers will be able to purchase any Toys "R" Us product by scanning the barcode with RedLaser, now owned by eBay, with the mobile app fully processing the transaction. There's a huge catch, though: Any payment form other than eBay's PayPal need not apply.

The shortsighted payment limitations aside, this Toys "R" Us trial is quite clever and it showcases what eBay can do in the mobile space. Consistent with the mobile wallet pitch PayPal itself is making to retailers, parent company eBay's trial showcases the strength of being platform-agnostic. This trial can work just as well on an iPhone or an Android. (Note: eBay's information seems contradictory on how multi-platform it will initially be, however.) On the flip side, Google Wallet can work just as well on Visa and MasterCard. Therein lies the frustration of the Toys "R" Us trial.Read more...


Researchers: Thieves Can Read A Mobile Phone From 14 Feet Away

November 9th, 2011
Bringing Mobile Commerce in-store—for everything from mobile payments to mobile checkout—just hit another snag. Researchers have developed a way by which thieves could capture video of users typing on a smartphone screen from as much as 14 feet away inside a store, and then automatically extract passwords, PINs, payment-card numbers or other sensitive data from the video, which can be captured over the phone user's shoulder or even in the reflection of a user's sunglasses.

Shoulder surfing is an unavoidable problem with smartphones in a crowd, but 14 feet away feels like enough distance to be safe from video eavesdropping. And although there are workarounds to block the attack—turn down the screen brightness or turn off the pop-up keypress confirmation that makes the iPhone's virtual keyboard so much easier to use—it's unlikely that customers will be willing to do that. Store associates, on the other hand, might want to do both those things, along with being careful to guard their screens and watch for customers who happen to be using video cameras nearby. The biggest question is whether they can be convinced to do anything.Read more...

Item-Level RFID Being Crippled Due To Retail IT Fears

November 9th, 2011
Is item-level RFID a surveillance technology? Of course it is, if you're a thief—particularly a sticky-fingered employee. When missing product can be routinely discovered within hours instead of weeks, it's much easier to scan store security recordings to spot the theft. RFID wasn't designed for surveillance—that's just a side effect. Another side effect: item-level RFID's ability to let executives track exactly how well stock is moving in and out of stores on a daily basis. If you're the manager of a store with problems, that might feel like surveillance, too.

For many retail IT execs, it's more than a little uncomfortable. Store managers are on the same side as IT. Setting up systems to see who's underperforming—and exactly how, in near-real-time—can feel, well, a little dirty. Maybe that's why so few chains are doing it—and why most of the systems offered by vendors for using RFID data aren't built for that type of visibility. "Our number-one fight with software vendors is, your software doesn't do enough," said American Apparel VP of Technology Stacey Shulman. "'Well, it's what everybody else uses.' Well, it's not enough."Read more...

M-Commerce Looks Healthy For The Holidays—But Not That Healthy

November 9th, 2011
'Tis the season for Mobile-Commerce hype: On Tuesday (Nov. 8), Sybase and the Mobile Marketing Association announced that, according to an October survey, 62 percent of consumers are "poised to make purchases with their mobile devices this holiday season." Well, sort of. In fact, the survey of 1,000 consumers offers a slightly grimmer view of M-Commerce: Only 22 percent actually plan to use a mobile phone to buy anything—and that includes people who will just phone a retailer's call center and order that way.

If this was just another marketing survey that over-hyped its results, it would be one thing. But there's a serious issue at play here. The holiday shopping season of 2011 is going to be a crucial one in retail M-Commerce, the one where meaningful purchases start to happen and where millions of consumers will try—or consider trying—M-Commerce. And it is where they will be satisfied or dissatisfied. Even more crucially, there is a critical expectation issue at play. What will your CEO and board expect from mobile? Surveys will create the bogus impression that a huge number of mobile transactions will happen this month (the 61 percent from this survey's headline is a perfect example), and when that doesn't happen, you're going to be blamed.Read more...

In Finland, A Chain Tries An Extra-Slow Checkout Lane. Can Armchairs Make Customers Happy—And Maybe Buy More?

November 9th, 2011

While U.S. grocery chains are struggling with whether they’re better or worse off with self-checkout and express lanes, a supermarket in Espoo, Finland, is experimenting in the opposite direction: intentionally slow checkout. Dubbed the “don’t panic” lane, the slow-track checkout at a store in the K-citymarket chain offers armchairs for people waiting to pay, help putting products on the checkout belt and a generally relaxed approach to paying for merchandise.

The pilot project is being done in conjunction with researchers at Aalto University, who thought mentally disabled customers would prefer a less hectic, more helpful checkout process. But it seems elderly customers and even parents with small children in tow also like the slow lane (those armchairs seem to be a big draw in both groups). Running customers through checkout at top speed may be the most efficient way to do it, but an extra-slow checkout offers plenty of opportunities to hit those armchair-bound customers with digital signage and potential impulse items—keeping some customers happier and potentially paying for itself with increased sales. For chains that have already given up on one-size-fits-all checkout, that slow lane might actually make good retail sense.…

Letting Customers Chase Your Thieves Gets Something More Valuable Than A Nabbed Thief: A Loyal and Happy Customer

November 8th, 2011
Do you need help tracking down the cyberthieves who periodically attack? Maybe you do, maybe you don't. But if you set up a mechanism to let your customers try and help, you might get something much more valuable than a captured thief: lots of happy and loyal customers. Sound strange? It is. But it's also true.

Consider this true story from Legal Columnist Mark Rasch: About a week ago, Rasch's wife's E-mail provider notified her that she was a baaaaad girl. Apparently she had sent out a bunch of spam in violation of the Terms of Service. Of course, it wasn't her, and he notified the provider of this fact. What happened next, or more accurately what didn't happen next, is a cautionary tale about the nature of the relationships between IT vendors and customers (like merchants) and the relationships between merchants and their customers.Read more...

How Not To Beat Apple In In-Store Mobile POS

November 3rd, 2011
If you want a perfect snapshot of how dominant Apple has become for in-store mobile POS devices—and why—look no further than Hewlett Packard's mobile POS announcement on Thursday (Nov. 3): a payment-card sled that attaches to HP's new Slate 2 tablet. This is bound to be a tough sell—remember, HP has just killed off a tablet line in a very public fashion (even though that wasn't the Windows-based Slate line). The HP tablet-and-sled combo together will be a hefty $1,200. Competing with Apple means HP will need to nail this product perfectly—right?

Yes, that's what HP needed. But instead of offering the tablet and sled as a general-purpose in-store mobile POS, HP is positioning it largely as an add-on to HP's own POS systems. OK, that limits the market. So does the lack of a clear advantage over an iPad (HP says being Windows-based will make it "easy for retailers to integrate," though a product manager acknowledged that iPads probably work fine with most retailers' systems too). Then there's the mag-stripe reader, which can work right out of the box in unencrypted mode. Wait, isn't that exactly what retailers don't want?Read more...

Behind The Scenes: The Mobile Prescription Alert Ideas That Winn-Dixie Rejected

November 3rd, 2011
Offering to alert pharmacy customers to prescriptions that are about to expire would be a terrific idea, were it not for privacy restrictions imposed by the U.S. Health Insurance Portability and Accountability Act (HIPAA). That's something Walgreens learned the hard way last month. Winn-Dixie, the $7 billion regional grocery chain, tackled the same issue and debated and ultimately rejected several tech approaches.

With so many chains offering pharmacy services, the debates provide a glimpse into how mobile strategies can slam into privacy rules and, sometimes, technology simply can't get around that. Tim Bell is the director for pharmacy managed care and systems at the 460-store chain operating in Florida, Alabama, Louisiana, Georgia and Mississippi. Bell said the issue is that the best approach for sending a quick alert (such as "Your Prescription for Lipitor is due for renewing. Should we renew?") and accepting ("Renew") is the least secure: text messaging.Read more...

Apple To Rip Up In-Store, Mobile Channels

November 3rd, 2011
Apple is about to complete its conversion to a merged-channel retailer—and maybe put its first stake in the ground for mobile payments, too. Most critically, Apple is changing how it doles out bonuses and commissions, which is the only way to get anyone's attention. Sales will no longer be credited to the division (online or in-store) that collects the money, but to whoever actually delivers the product. On November 3, Apple is expected to roll out a new system that will merge its in-store and mobile-commerce channels, offer a 12-minute turnaround time for M-Commerce orders and reward brick-and-mortar stores for pushing customers to shop online and pick up in-store. And—as you may have heard—it's letting customers do self-checkout, too.

If that sounds like an afterthought, it very nearly is, even though self-checkout alone would be a big deal for most chains. What Apple is primarily trying to do is demolish the wall between stores and M-Commerce. It may not work—that 12-minute turnaround promise may just be impossible, and some of Apple's plans for prioritizing customers can collapse when things get busy. But if it does work, it may also represent Apple's demonstration of how it plans to offer mobile payments to other retailers—without either NFC or mimicking a plastic card.Read more...

PayPal’s Pitch To Retailers To Use Its Mobile Wallet: Making The Most Of A Few Temporary Differences

November 3rd, 2011
In the battle to woo retail partners, PayPal this week put out its best digital wallet presentations in a pop-up store in the Tribeca section of New York City. With presentations done by PayPal staffers and professional actors, PayPal is preparing to run retailers through five scenarios of mobile wallet retail usage. Unfortunately, PayPal's demonstrations look eerily like those from Google and ISIS.

The problem is that the digital wallet concept—a place where you can cram in every payment method, CRM card and discount reminder—is the same, with trivial differences in partners and technology. PayPal did showcase some differentiators—such as the ability to pay with airline miles or other points programs, in addition to changing the payment method days after the purchase has been finalized—but it also conceded that there's nothing preventing Google or ISIS (or Apple or others) from offering identical services.Read more...

Debenhams Gets Clever About Mobile Invisible Pop-Up Stores

November 2nd, 2011
In unrelated trials this week, Debenhams—the UK's second-largest department store—and eBay are trying to push the mobile limits of creating stores with no physical infrastructure. But unlike Web sites, these virtual stores exist in a specific place to which customers must travel. In Debenhams' case, a human being at that location would see nothing, except other human beings oddly pointing their phones around the sky.

The virtual store is not new. In a much publicized trial this summer, Tesco re-created almost all of the merchandise from one of its stores as a series of high-res photographs with QR codes on the walls of a South Korean subway. But the Debenhams' effort takes it farther than any other retailer. At least consumers arriving at that subway would see pictures of products and could guess what to do. In the Debenhams' trial, consumers were directed to very prominent street corners in London (Trafalgar Square), Manchester (Albert Square), Birmingham (Centenary Square), Cardiff (Cardiff Castle) and Glasgow (George Square). They then loaded a mobile app onto their phones. If the geolocation of the phones matched what the app had been programmed to look for, it would display a ghostly image of a dress.Read more...

Mobile Wallets—And Receipt Digitization Firms—Could Send Your Data Right To Your Rivals

November 2nd, 2011
The Holy Grail of customer relationship management—or, given your perspective, The Black Hand Of Death of CRM—is cross-chain transparency. That's where you see not only every transaction from your customers within your own chain but also everything they purchased from every one of your rivals and when. The potential for this type of transparency will exist with the various mobile wallets being pitched, but an even more likely and more frightening source of this data will be companies that are offering to digitize paper receipts.

Whether such a possibility is good or evil depends on whether you are salivating over seeing your rivals' transactions or envisioning your rivals seeing all of your transactions. Officially, none of the mobile wallet players—including Google, PayPal and ISIS—has threatened to sell peeks at your transaction receipts to your rivals, although no one is willing to rule out future revenue sources. But the smaller vendors that are offering your customers free digitization of their paper receipts—and usually an offer to also store any already-digitized receipts—are the more likely sources of this cross-merchant data.Read more...

Google Will Charge For Maps—Just Enough That You Might Notice

November 2nd, 2011

Google is finally beginning to tighten the screws on users of its Google Maps. Well, sort of. On October 26, the search giant said that, starting Jan. 1, 2012, it will begin charging $4 per 1,000 views through its Maps API—but only for Web sites that exceed 25,000 map-views in a single day. Because Google is only counting the initial map access in that 25,000, it should be pretty easy for retailers to calculate whether this change will cost them anything at all.

For many retailers using Google Maps just on “find a store” pages, that pricing pretty much wipes out any incentive to jump ship to Microsoft’s or Yahoo’s map offerings—changing and testing the code would probably cost more than paying the overage fee on a few busy days. (If you’re a heavier user, because you have Google Maps in logistics or other geotracking applications, you may want to consider your options.) The actual pain may be trivial this time around, but it’s still a reminder that free Internet services probably won’t stay free forever—even from Google, which really wants retailers to be its new best friends.…

Are Macy’s, Target and Kohl’s Ready For A Really Early Black Friday?

November 2nd, 2011
Macy's, Target and Kohl's this week all announced they'll be opening brick-and-mortar stores at midnight on Black Friday, as the start of holiday shopping keeps carving farther into Turkey Day. That presents a tricky E-Commerce issue, though: When does Black Friday start online? If those door-buster deals show up for E-Commerce shoppers at midnight in New York, that means they'll be available in San Francisco at 9:00 PM on Thanksgiving night. After all, it seems silly to try to block Web shoppers from buying online before their local stores have opened. (Really, this year you're going to refuse to take their money?)

But there's certainly a difference between a marketing event that begins at midnight and one that starts in the middle of prime time on the West Coast. Last year, Kohl's started its Black Friday sales at 3:00 AM New York time, midnight Pacific time, with Macy's and Target an hour later. That didn't make much of a difference online—it was still late-night across the U.S. But wind those times back a few hours, and suddenly it won't just be night owls who are hammering on E-tail sites.Read more...

The New Mobile Privacy Debate: Navigating Between Discipline And “Icky”

November 2nd, 2011
Envision an in-store system that addresses every customer by name and points out to the customer—out loud, in earshot of other customers—prior purchases, including highly sensitive products. The system would know the customer's address, relatives, neighbors and friends, and might even mention embarrassing incidents involving the customer as a child. The name of this invasive system is "the friendly shopkeeper," and almost every corner pharmacy, grocery and hardware store had one back in the 1950s and 1960s—back when we like to think customers were very privacy conscious.

Conventional wisdom is that consumer resistance to invasive marketing consistently softens over time with each new retail tech innovation. But the friendly shopkeeper demonstrates that's not a linear trend. And there's a school of thought that says mobile technology may break that trend, too. The potential invasiveness of mobile payments is so intense that customers might rebel and resist all privacy-infringing efforts even more—making mobile dangerously likely to blow up in retailers' faces.Read more...

Williams-Sonoma Skates On ZIP Code Privacy Lawsuit, Federal Judge Rules

November 2nd, 2011
About a year ago, retailer Williams-Sonoma got into legal trouble in California for having its cashiers ask people using credit cards to provide their ZIP codes (to be used for marketing purposes) in violation of a California statute that made it unlawful to ask for "personal information" as a condition of accepting a credit card. A federal court in New Jersey has now let Williams-Sonoma off the hook for doing the exact same thing in the Garden State, leaving the state of the law of ZIP codes at best uncertain.

Several states have laws that restrict either in whole or in part the use of certain personal information as a condition of accepting a credit card, pens Legal Columnist Mark Rasch. The trick, though, is whether to write it down or not. (Hint: You really don't want to write it down.)Read more...

New Visa PCI Compliance Stats: Level 1s Up, Level 3s Down Slightly, Level 2s Down Sharply

November 1st, 2011
Level 3 merchants, whose compliance Visa only started making public this summer, have seen their relatively weak compliance numbers drop further, according to new figures the card brand released Monday (Oct. 31). Level 2 chains saw an even stronger drop, while Level 1s continued their improvement trend.

The numbers on their own are somewhat of a concern, given that compliance in any group is supposed to steadily improve. That's especially true with a new entry, such as Level 3s, which start at such a relatively low level of compliance. In this instance, though, the explanation for the compliance dip might lie in a recent increase in the number of Level 3s trying to get compliant.Read more...

Wal-Mart’s Christmas Price Guarantee Doesn’t Believe In E-Commerce. Nor Much Else, It Seems

October 27th, 2011
Wal-Mart on Monday (Oct. 24) unveiled its Christmas Price Guarantee, whereby the chain promises that if a customer finds a Wal-Mart-purchased item "advertised for less at another store, Wal-Mart will give the customer a giftcard for the difference through December 25. Guaranteed." Unfortunately, the exceptions and practical limits of the offer have enough strings attached to keep Santa's elves well-stocked through at least late March.

First off, the world's largest retailer is excluding any online sites. Really? In late October 2011, you're still not convinced that E-Commerce isn't just a fad? Second, it's a clever move in that once customers purchase an item from their lists, they are unlikely to continue researching and looking for it.Read more...

The Real iPad Security Workaround: Don’t Trust iPad Security

October 27th, 2011

By now you’ve probably seen how easy it is to unlock an iPad 2 without knowing the password. Local TV news anchors are having a field day with this one, because even they can figure out how to exploit the hole Apple left in iOS5. It requires using the iPad 2’s magnetic smart cover and about five seconds of poking buttons and covering and uncovering the screen—a truly impressive security fail.

Apple has come up with a workaround (change the smart cover-related settings) and promises a patch soon, but this should still remind retail chains they need to be doing their own security in apps running on in-store mobile devices. Making sure a custom app automatically locks itself when it’s not being used will cost an associate a few extra seconds for one more password, but you really don’t want a thief to walk off with a tablet running a live application that’s connected with your payment or inventory systems. (And if your in-store iPads don’t have their own smart covers? Let’s just say that thieves tend to come prepared.)…

Sears’ Local E-Commerce Move Trying To Change Consumer Behavior

October 27th, 2011
Sears on Wednesday (Oct. 26) made its local-only E-Commerce move, rolling out two new sites ( and that would limit their displays to just products sold by and available at the most local store. It would also display non-advertised local sale items plus—and this is a nice touch—a preview of items slated to go on sale the following week.

There are two main drivers behind this move. The first is the recent E-Commerce obsession with local: consider Wal-Mart's local Facebook move two weeks ago. But the second issue is the rapid death of many regional newspapers, which are taking to their graves the local circulars. The Sears local move not only enables the chain to migrate many of those local promotions from dead-tree to pixels, but it also is upgrading the experience. Consider a circular where the ads instantly disappear as soon as the product is out of stock.Read more...

Home Depot, Macy’s, Target Evaluating QR Codes That Show Different Things Based On The Consumer’s CRM

October 27th, 2011
A QR code approach that will display different information—and initiate different actions—based on the purchase history of the person scanning it is being evaluated by Home Depot, Target and Macy's, according to the CEO of the QR vendor that is trying to sell that system. This next-generation QR code tactic leverages tracking codes from the mobile phones to establish a customer history and thereby permit highly customized responses.

"At the scan, we get a certain amount of metadata as a result of the scan itself—operating system, carrier, cell tower being used, etc. We get all of that," said Scanbuy CEO Mike Wehrs. "We know what that app has scanned in the past." Indeed, Wehrs argues, the app can secure data from the QR code plus the phone plus online data accessed from a retailer's loyalty card database. "If the app integrates with their CRM files, it can give a completely customized experience."Read more...

In-Store Trial: 3 Mobile Datapoints To Locate Customers

October 26th, 2011
In a five-store trial—slated to expand chain-wide in the next two weeks—the Meijer grocery chain has gotten creative about letting customers locate products on the shelves using their phones. Given that GPS won't work in-store and that in-store hardware sensors are expensive and labor-intensive, the chain is using a combination of Wi-Fi signal strength and product-barcode scanning to zero in on the customer's location.

The potential of this microlocation mobile approach is compelling, because it provides a relatively easy—and somewhat accurate—way to help customers find product. Of course, that's not the goal of all chains. Some chains—such as Costco—depend heavily on the customer stumbling on impulse buys as he/she wanders the aisles in search of the elusive clothes pins or peanuts.Read more...


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