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


Amazon May Not Get Its .Amazon Domain-Name Extension After All

May 20th, 2013
Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and more than a dozen other retailers who applied for their own top-level domains (TLDs) were expecting to see them rolled out starting this year. But the Internet Corporation for Assigned Names and Numbers (ICANN) is running into more delays in approving the vanity domains, and some—including .amazon—look like they may not be available to retailers at all.

The problem comes down to the fact that anyone can object to a TLD that has special significance beyond being a trademark, and far more objections have been filed over the nearly 2,000 applications for the new TLDs. In .amazon's case, there's a South American river with the same name (what a coincidence, huh?)—and several South American countries believe that's a good reason for Amazon not to get control of .amazon. Read more...


Fighting Falling Same-Store Sales, Walmart Looks To Be Saved By IT

May 17th, 2013
As Walmart was reporting its first same-store sales drop in seven quarters along with a barely increasing profit on Thursday (May 16), it also detailed its impressive IT and e-commerce growth. Quarterly online sales soared more than 30 percent as the chain kept boosting its number of self-checkout POS units (a 38 percent boost in that quarter alone). "Customer response (to self-checkout) has been positive, with utilization across the chain up more than 300 basis point years over year," reported Bill Simon, Walmart's senior U.S. executive. And even while reports continue that Walmart staff cutbacks are slowing down its ability to stock its shelves in a timely manner, Simon spoke of using IT magic to improve efficiency and get those shelves loaded again.

"In the back rooms, projects like MyGuide and OneTouch also enabled improvements in stocker productivity by helping to facilitate the process of moving merchandise from the truck to the shelf and prioritizing work for our associates," Simon said. "In the first quarter, these initiatives contributed to an increase of more than 3 percent cases handled per work hour."Read more...


Retailers Can Put Anything In A User Agreement, But There’s A Huge Catch

May 16th, 2013
Legal columnist Mark Rasch recently received a $25 debit card as an honorarium for giving a speech. To "activate" the gift card from, he had to give them his name, address, telephone number, Social Security number, user ID, PIN, and answer to three security questions – all that just for 25 bucks. In fact, what he really did was to open a bank account with $25 and a monthly maintenance fee of $4.95. He apparently agreed to all of this on the website of under their terms of service. But that’s not all he agreed to.

Years ago, he got a Wachovia stored value card, which similarly had outrageous fees – fees for putting money in, taking it out, checking the balance, loading the card, not loading the card, as well as an annual fee, monthly fees, etc. It amounted to usurious interest rates and fees of over 3000 percent. When he called to dispute one of the fees, the person on the other end told him that his wife (who had just handed him the phone) had authorized the fee–she did not, and he knew this because he was standing right there. That's when Wachovia said they had recorded the call. To a litigator, them's fightin' words.Read more...


The Myth Of Showrooming Takes Another Hit

May 15th, 2013
The myth of showrooming—the suggestion that tons of shoppers are flooding stores to only use them as a physical showroom as they had always intended to purchase the product at Amazon—lives on. But a survey conducted in late April by Bizrate Insights is helping to add a little clarity. First, showrooming really doesn't happen very often. But more interestingly, when it does, it's more likely to be within the same chain. That's a problem all right, but the name of that problem isn't showrooming. It's internal politics.

Bizrate surveyed more than 9,000 shoppers (between April 24-30) who had just completed an online purchase at one of their e-tailers. The first—and arguably most meaningful—stat is an overwhelming 78.15 percent of those online purchasers had not looked at those products in any physical store. No surprise there, but it's a key number to remember the next time someone shouts about how showrooming is gutting brick-and-mortars. When they zeroed in on that remaining 21.85 percent of shoppers who had looked instore before buying online, most of them (54 percent) ended up buying from the same chain.Read more...


Amazon Says The Two Merchants Suing Them Sold Counterfeit Goods, Tried To Get Others To Raise Prices And Said Mean Things To Amazon

May 15th, 2013
Amazon has formally responded to a lawsuit from two of its onetime sellers—in which the sellers said Amazon held their money for more than 90 days, in violation of state law—by essentially saying, "We won't see you in court, buddy." Amazon's position is that a mandatory check-off box on its site means that sellers are not allowed to sue, having agreed to settle all disputes via arbitration.

Amazon's position is very direct: that by agreeing to be a seller, the merchant has to abide by the terms of the agreement, which includes arbitration. The sellers' legal position is focused on how long Amazon held the money and that it violates state law, which sets 10 days as the limit. By violating Washington state law, the action goes beyond the contract (and its arbitration clause) and needs to be settled by a government court, in open proceedings. Amazon's contract sets a maximum time of 90 days and the lawsuit contends that it didn't even meet that deadline.Read more...

PayPal Offers Free Card Processing, But For Who?

May 15th, 2013
PayPal is offering free credit, debit, check and PayPal processing for qualifying merchants until the end of 2013. The catch: The retailer has to trade in a cash register for a PayPal-compatible point-of-sale system, according to a blog post by PayPal president David Marcus on Tuesday (May 14). The promotion will go live in June, although applications are being accepted now, Marcus wrote. He didn't give any other details of the deal, such as how much trade-in value a retailer will get in order to buy a PayPal-equipped POS from Erply, Leapset, Leaf, NCR Silver, ShopKeep or Vend, or exactly what "free" means when it comes to processing costs.

But to qualify for the promotion, merchants currently must be primarily using an old-fashioned system such as a cash register, and PayPal may send out employees to collect the register and verify the system upgrade.Read more...

Card Processor Hit In A $40 Million Breach. Was It Yours?

May 15th, 2013
A U.S. payment card processor was attacked in February as part of a $40 million cyberheist, federal prosecutors said last Thursday (May 9)—but they didn't identify who the processor was. That left retailers no way of knowing whether their processor was the one that thieves breached to gain essentially unlimited access to the processor's systems, potentially including merchant card data.

It wasn't until Sunday that the mystery breach victim was revealed to be EnStage, a processor that's headquartered in Silicon Valley but outsources its processing to a site in India. And it's still not certain whether any merchant card data was actually stolen in the breach.Read more...

Is It Technologically Practical To Send Two Different Messages Simultaneously To Children And Adults?

May 15th, 2013
One of the most challenging retail sales issues is trying to market products to children. The pitch made to sell a cereal, game, toy or piece of clothing to a child will be different than the one aimed at a parent or guardian. That's tricky when the two are often standing next to each other. A child pitch might focus on a cereal's taste, with an adult pitch focusing on nutrition and price. Or a toy message to a younger customer might emphasize fun, while the adult pitch speaks of education. What if digital signage and in-aisle displays could simultaneously make different sales pitches to children and adults?

Through the use of lenticular technology, it's quite possible. Indeed, it's being used today for something of a much more serious nature. A Spanish operation called the Aid To Children and Adolescents At Risk Foundation has created a series of street signage that was designed to send a message to a potentially abused child, understanding that the abuser could very well be standing right him to the child.Read more...

Sears Gets A New CIO, And (Once Again) Makes Its Old One Disappear

May 14th, 2013
Sears Holdings has a new chief information officer. On Thursday (May 9), the chain said Jeff Balagna will become executive VP and CIO. Balagna arrives at Sears from drug maker Eli Lilly, where he was CIO for just over a year. Before that, he was CIO at Carlson Cos., the corporate parent of restaurant chain T.G.I. Fridays and Radisson Hotels, and later CEO of Carlson Marketing, a spinoff that specialized in loyalty programs.

What's not clear is what has become of Keith Sherwell, Sears' highly visible (and now former) CIO.Read more...

Mobile For Shopper Trends? No, But For CRM Depth, Yes

May 13th, 2013
The scenario is tempting. Retailers can have so much richer information about shoppers when they leverage mobile app data, including knowing when any one of those shoppers comes into one of your stores, roughly where they go and anything they scan. Although that's all true, it's also data that is about only a small percentage of your shoppers, and it's about your most loyal shoppers. Would extrapolation of that information yield any accurate trends about the rest of your potential shopper population?

Placed, a mobile geolocation vendor specializing in retail, found some intriguing stats when it was reviewing some of its retail findings. It found that the number of Barnes & Noble shoppers who were older than 55 increased 3.4 percent (for the month being probed) and that the number of customers earning fewer than $50,000/year decreased 2.2 percent. It noticed that Kohl's said its shoppers who earned more than $100,000 increased by 1.8 percent. And Target saw the largest increase in physical visits in the Midwest and Northeast regions of the U.S. Clearly, without many months (and perhaps years) of trend data, those stats are meaningless. But it does illustrate the kinds of insights that are possible when overlaying mobile geolocation tracking with CRM and demographic data.Read more...

FTC Eyes Data Brokers, And That Could Raise Retailers’ CRM Costs

May 10th, 2013
Data brokers are now in the sights of the U.S. Federal Trade Commission (FTC), and that could affect some retailers' customer-information systems. The FTC sent out letters last week warning that some brokers might be violating federal law by collecting and selling information on individuals, even if the information is publicly available.

There's no indication that any retailers are being targeted directly by the FTC. But increasingly, retailers that collect large amounts of customer data through CRM or loyalty programs are using additional data they acquire from brokers to fill in the gaps as they build a picture of customers. Some chains even use data as minimal as a name and Zip code, plus broker-provided data, to get a complete CRM record on a customer from a single transaction.Read more...

Bank Using Voice Biometrics To Authenticate Customers. Could It Work In Retail Call Centers?

May 10th, 2013
Retail security experts have long argued that shoppers in-store provide more security identification potential than those online and that shoppers phoning into a call center offer the least. But a major U.K. bank is using biometrics to authenticate telephone customers by using the customers' pre-recorded vocal patterns. Could the same approach help reduce fraud pushed through retail call centers?

The bank, Barclays Wealth and Investment Management, uses 20 to 30 seconds of the conversation with the phone agent and compares the audio WAV file to a sample taken from that customer earlier. If the software thinks it's a match, the agent is silently signaled that the customer's voice has been verified. If the software does not find a match, agents are supposed to use their regular security questions to verify.Read more...

Target’s Joint Program With Facebook Goes Out Of Its Way To Exclude

May 10th, 2013
Target (NYSE:TGT) has started a trial program with Facebook, where its customers get discounts on products on services that are pushed through the social network, if they buy them inside a Target store. Bafflingly, the effort prohibits users from using the program to work with, even though that would be the much easier and intuitive way for shoppers to use the service.

This is far from the first time that Target has talked up its commitment to a merged channel/omnichannel strategy, while delivering something that seems to force shoppers to stay in whatever channel Target is pushing at that moment. Consider the chain's giftcard digital strategy deployed during last year's holiday season.Read more...

The Security—And Legal—Headaches With Retail Twitter Accounts Just Got Worse, Thanks To The SEC

May 9th, 2013
The United States Securities and Exchange Commission (SEC) has approved a final rule allowing publicly traded companies to disclose "material nonpublic information" to the public through social media. In other words, if you have something you want to say to the public, instead of releasing a press release or putting it on your webpage, now you can comply with SEC rules by simply sending a tweet. But, as the Associated Press learned when its Twitter feed was hijacked, it's not entirely clear when you send a tweet that it's actually you who sent that tweet.

Companies spend a great deal of money to manage their social media presence, penned legal columnist Mark Rasch. They hire consultants and experts to craft a message that they will be putting out on Twitter. They monitor these networks for disgruntled customers and respond when customers mention their names. However, because of the inherent insecurity of social networks, companies need to do more to ensure that there Twitter feeds, Facebook pages and other social networking sites are secure. Otherwise, like the Associated Press learned, social networking can be decidedly antisocial. Read more...

C-Store Chain Mapco Express Hit With Remote Access Breach

May 8th, 2013
Regional convenience-store chain Mapco Express (NYSE:DK) said on Monday (May 6) that thieves may have stolen credit and debit card information from all 377 of its stores during March and April.

"The hackers accessed the payment processing systems used in all of our stores from March 19-25, in certain stores from April 20-21, 2013, and at two stores in Goodlettsville and Nashville, Tenn., from April 14-15, 2013. If you used your credit or debit card at one of these locations during these time periods, you card data may have been compromised," the retailer said in a statement.Read more...

Online Sales-Tax Bill Passes Senate, With Surprises Ahead In The House

May 8th, 2013
Now that the U.S. Senate has passed its bill to allow states to force online retailers to collect sales tax, the question for both brick-and-mortar chains and E-tailers is how quickly—or slowly—the bill will move through the House on its way to becoming law. The 69-27 vote on the Marketplace Fairness Act on Monday (May 6) was lopsided, as expected. But that may be the end of any foregone conclusions as the bill heads into a much less certain future.

One assumption has already gone by the boards: House Speaker John Boehner plans to send the bill to the House Judiciary Committee, instead of the Ways and Means Committee, which would normally handle tax legislation. The Judiciary chairman, Robert Goodlatte, has said he has reservations about the bill, and hasn't yet scheduled any hearings on it. And as anyone who has followed the progress of this over the years knows, in a Congressional committee, the chairman can decide whether a bill lives or dies, no matter how the rest of his colleagues might vote.Read more...

Is American Airlines’ New Social Program—Where Influencers Get Free Airport Club Access—Something Retailers Should Try?

May 8th, 2013
The idea of retailers assessing customers' value based on their social media influence—rather than what they personally spend—is not new. But the challenge of meaningfully figuring that out is still huge. American Airlines on Tuesday (May 7) announced that it was going to offer people who have a high social influence free access to its airport lounges. On the plus side, this is one of the first major programs to offer shoppers a concrete item of value (people pay a lot to join airline clubs) in exchange for having a high social influence number. The downside is that the company calculating the social influence number—a vendor called Klout—has taken the easy way out. It simply counts up the Twitter followers and Facebook friends (and other social media stats) and looks at forwarded Tweets.

It doesn't take the next logical step and try and determine actual purchasing clout. For example, the most meaningful number would be how many dollars of purchases did that shopper's Tweets generate? It's nice if someone has a lot of Twitter followers and if they Tweet that the shoes on your homepage now are must-haves. But an influence rating needs to factor in what happened after that Tweet went out. Did it deliver 48 purchases of that product from the recipients of that Tweet?Read more...

Nordstrom’s Typhoid Outbreak Used POS Data To Contact Individual Shoppers

May 8th, 2013
After a cook in one of its in-store restaurants was discovered to have typhoid fever, Nordstrom is trying to directly contact customers who might have been exposed to the disease. The retailer is sifting through point-of-sale transactions from the Nordstrom Cafe in the store at San Francisco's Stonestown Galleria mall in an attempt to identify specific customers who could have been exposed, but that's proving more challenging than expected, a spokesperson for the chain said on Monday (May 6).

The San Francisco health department notified the store late last Thursday (May 2) that an employee was diagnosed with typhoid and may have exposed customers who ate in the restaurant to it on April 16, 17, 18, 20 or 27. As of this week, no cases of customers or other store associates having the disease have been reported, according to the health department. But Nordstrom is still trying to track down anyone potentially exposed.Read more...

Discount Dilemma: Remember, Customers Will Compare Online Prices They Find

May 8th, 2013
Consumer Reports' Consumerist website is having some fun with an FTD customer's complaint that a "customer appreciation" special deal was actually more expensive than the price a new customer could find on the floral association's site. It seems the customer had bought an FTD bouquet for a friend, then later searched the FTD site for Mother's Day bouquets. "My husband also started looking for FTD arrangements on his computer, and found that the prices listed for him were $3 to $5 cheaper than those listed for me," the customer wrote to Consumerist. Clearing all the FTD cookies from my browser made my prices drop precipitously. Clicking on the 'customer appreciation' email link to FTD brought the prices back up."

For customers, Consumerist's wisecrack—"Watch out for the Customer Appreciation price penalty"—seems pretty appropriate. For retailers, though, it raises a serious problem. You want to reward returning customers. You also want to entice new customers with low prices. The easiest way to tell who's returning (and link them with CRM data) is with cookies—but that's an invitation to embarrassment if new and returning customers happen to compare notes.Read more...

Best Buy, Home Depot, Gap And Others Lose Major Patent Gift Card Lawsuit

May 8th, 2013
A large group of major chains—Best Buy, JCPenney, Barnes & Noble, Gap, McDonald's, Toys R Us and Home Depot—has been dealt a major patent legal blow Friday (May 3) when a jury unanimously sided with a Texas company that owns a gift card processing patent.

Technically, the jury verdict didn't say that those chains had violated the patents, but merely that the arguments from those chains that the Texas company's (named Alexsam) patents should be ruled invalid failed. The next case will address the issue of whether those chains had in fact violated those patents. That said, much of the evidence that the chains used to indicate why the patents were invalid can be turned right back against them now to prove that their processes are so similar that it must be a patent violation. As a practical matter, it's unlikely that this case will see another jury trial, as the parties will almost certainly work out a deal, in which the chains would simply buy licenses for the Alexsam patent. The question will be how much they'll agree to pay for the patents.Read more...

In Kmart’s Armed Data Breach, Police Somehow Not Told Everything

May 8th, 2013
When a Kmart suffered the loss of sensitive pharmacy customer information in mid-March during an armed robbery, Sears officials and lawyers quickly reviewed details and made sure to follow all federal rules—especially HIPAA guidelines. Somehow, though, Kmart never got around to mentioning the data loss to the police, who were never able to find the gunman because the only physical evidence he took with him—a disk containing that day's data backup—was unknown to them, thanks to Sears.

The Little Rock, Arkansas, police investigating the armed robbery—where the gunman slashed the assistant manager's tires to distract him before ordering him at gunpoint to open the safe—were not happy about being kept in the dark and possibly lied to. The investigating detective, Det. Julio Gil, "only learned of the cartridges being stolen from Kmart when he was called by media," said Sgt. Cassandra Davis, who is in charge of the Little Rock Police Department's public affairs unit. The detective "called Kmart and Kmart only then confirmed. He had to call them and ask about it before he learned what (the gunman) had actually taken. No one from Kmart made a report," Davis said.Read more...

Walmart Builds Own Search, No Competitive Advantage In Buying

May 7th, 2013
Walmart is arguably the most tightfisted retail chain in the world, constantly driving out costs any way it can. So why is the world's largest retailer now focused on building its own technology instead of buying it off the shelf? According to the chain's e-commerce chief, that's the only way it can get a competitive advantage from the technology.

"We can't do what we need to do and want to do with off-the-shelf solutions," said Neil Ashe, Walmart president and CEO of global e-commerce, speaking at a retail conference last week. And one of the first big projects to come from the insourcing is a proprietary search engine that has tighter integration with local stores that will let Walmart continuously customize its search without having to wait for outsiders to develop the features it wants.Read more...

Can Ebay Pull Off A Giant Touch Window For New York Shoppers?

May 6th, 2013
Ebay and retailer Kate Spade are doing something this summer that would have been unthinkable just a few years ago: creating a pop-up store in New York that will feature a gigantic touchscreen store window. Let's be clear—what would have been unthinkable would be a relatively small (82-store) apparel chain taking on something this technically aggressive, even with a partner as big as eBay to help foot the bill.

Leaving aside all the obvious unanswered questions—from "how do you physically protect a giant touchscreen?" to "how much of an exhibitionist does a customer have to be to browse a web catalog that's taller than she is, right out in public?"—it's a testament to how inexpensive and physically tough this kind of technology has become that it's viewed as practical. Of course, that all assumes that the chain and eBay will actually get it to work as advertised.Read more...

Foot Locker’s Mobile Redesign Slows Site To A Web Crawl

May 3rd, 2013

If a mobile site redesign’s job is to make a site look better and to deliver more sophisticated functionality, then the mobile site changes at Foot Locker (NYSE:FL) delivered. But if the goal is not to slow things to a Web crawl, it apparently failed. Such is the assessment of mobile performance firm Keynote, which evaluates retail mobile performance every month. After the redesign, Foot Locker site availability plunged from 100 percent to 93.42 percent, Keynote found, according to Internet Retailer. That’s the difference between being ranked as the faster retail site late last year and performing dead last on the publication’s 30-retailer index at the end of April. Its 10-second October 2012 home page load time had slowed to 17.42 seconds in April.

“The newly designed site has double the number of page objects and triple the amount of kilobytes,” said Herman Ng, mobile performance evangelist at Keynote. “Another factor that appears to be slowing down its mobile home page is that it now has multiple objects coming from third-party domains, and some of them have a much slower average load time compared with page objects hosted on the Foot Locker domain.” Hg added: “We also noticed Foot Locker’s site availability, also known as success rate, fluctuated the most out of all the retailer sites on the Keynote index. This means there could be back-end stability issues. Another common reason could be that they didn’t provide a maintenance message to end users when their site was undergoing routine scheduled maintenance.”…

How To Defend Against a Cookie Monster

May 2nd, 2013
A new U.S. Federal Trade Commission (FTC) case illustrates how retail chains can get in serious legal troubles when they use third parties to help mine shopper data. Although the FTC did not, in that case, go after the retailers who either provided the marketing company with access to the data or who purchased the analyzed data, we can expect that, in the future, either the FTC or consumers themselves will go after those chains.

Retailers routinely hire technology companies or marketing companies to help them better know their customers. These outside vendors can help retailers comb through mountains of data to determine the profiles of their customers, their wants and desires. But if retailers want to avoid liability for unfair and deceptive trade practices, they had better ask not only what these companies can do, but also how they plan to do it, writes legal columnist Mark Rasch. Even buying aggregated data from an untrustworthy source, or allowing a third party to mine your consumer data, can lead to big trouble.Read more...


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