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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Domino’s New Live Video Stream: It Could Have Been Quite Useful, But It Wasn’t

May 1st, 2013
When Dominos announced its newest marketing tool, "Domino's Live," on Wednesday (May 1), it looked initially like it could be an extremely useful tool for pizza buyers. It's a Webcam in the Domino's kitchen that watches the pizza being put together and streams it live for anyone to watch. It's initially being done as a one-store (in Salt Lake City) pilot that runs just the month of May. The potential advantages of such an approach are significant. A customer could watch his order of a half-pineapple-half-pepperoni pie being made and notice right away that it's being incorrectly made as an all-pepperoni pie.

By dialing that store immediately, he might be able to have it fixed before it goes in the oven. It would discourage moves such as the time-honored pizza-chain tradition of taking ingredients that drop on the floor and put them right back on the pizza. All things that could truly speak to customer service and that could also give pizza buyers a reason to switch to Dominos. Unfortunately, that's not quite what Dominos has in mind.Read more...


Best Buy Exec Sets Up A Retail Site Outside IT, Gets Hacked

May 1st, 2013
This isn't something one sees every day. A senior Best Buy executive, instructed to create a blog to conduct Best Buy business, goes outside the Best Buy IT infrastructure to set it up herself—along with some colleagues in HR—using freeware and a $30/month hosting service. If the story stopped there, it wouldn't be that unusual, as frustrated managers have gone outside the corporate structure for decades, not wanting to wait for their project to rise to the top of someone else's priority list.

In this case, though, the executive was Best Buy's chief ethics officer, who wanted to have a site outside the direct control of corporate. And she learned a lesson about why one wants to be within the protection of a multibillion-dollar chain's IT department. She learned that when her Best Buy blog was shut down, possibly due to a cyberthief attack.Read more...


PayPal’s New Autofill Program Has Real Potential With Mobile

May 1st, 2013
EBay's PayPal (NASDAQ:EBAY) Tuesday (April 30) started pushing its new online login system, called Log In With PayPal. The essence of the new program is pretty much "autofill," in that it autopopulates the forms of any e-tail site that is part of the program. It also allows PayPal users to login in with their PayPal credentials—which is not new—a move that is intended to make it less necessary for shoppers to keep track of dozens of password/login combos for all of their favorite e-tail sites.

From the shoppers' perspective, that single login is not that exciting, as most have been doing a very insecure replacement: using the same login/password for those dozens of sites. In effect, that's what PayPal is doing. The security impact is that if there is a breach—at PayPal, at that shopper's computer, elsewhere—that password can now be used to access all of those sites. At least that's the hole until PayPal is contacted and the password is shut down or changed.Read more...


Amazon’s Five-Mile Threat

May 1st, 2013
Amazon will open eight new U.S. distribution centers between now and the holiday selling season, bringing the total to 54—with almost as many DCs outside the U.S., according to the CEO of e-commerce service provider ChannelAdvisor. The result of the ferocious building spree is that Amazon will then have a DC within five miles of most major U.S. cities. Put another—and more frightening—way: That means Amazon will very likely have a DC closer to your customers than many of your stores.

That dramatically cuts Amazon's delivery costs, and it's the most obvious explanation of why Amazon flipped its position on online sales taxes in 2011, from the leading opponent to a major supporter: All those warehouses give Amazon a big advantage over its e-commerce rivals, and it doesn't want those rivals to have a sales-tax advantage in return.Read more...


Walmart, First Data Say No To PayPal. (Is That Even Allowed?)

May 1st, 2013
PayPal's plan to use Discover's payment-card network to get its in-store payment system into most U.S. stores that accept payment cards isn't quite working out. Contrary to what the eBay subsidiary has been touting, all stores that accept Discover aren't automatically able to take PayPal payments—at least not until they and their acquirers explicitly sign on.

Result: Both Walmart and acquirer First Data have declined to accept the system, and Discover is now doing deals with acquirers one by one in order to get PayPal's system available in more stores. Discover said on Tuesday (April 30) that it has gotten a green light from 50 acquirers, and it is hoping PayPal will be live in 2 million stores by the end of this year, up from 250,000 now.Read more...

NCR’s Anti-Skimming ATM Tech Could Also Help Store PINpads

May 1st, 2013
New anti-fraud technology that NCR (NYSE:NCR) announced last week for its ATMs might find even broader use in point-of-sale PINpads—but not the way that most PINpads are currently designed. The new features, which NCR is calling SPS (for "skimming protection solution"), involve two elements. First—and most technically interesting—is a jammer that disrupts a skimmer that has been attached to the front of an ATM. When a motorized card reader pulls a payment card into the ATM, the electromagnetic jammer prevents a skimmer from reading the mag stripe on the card.

The second, more mundane technology is having the card-reading device send diagnostic information to the bank in real time when there's evidence of tampering. Read more...

CMOs Should Watch “Revenge Of The Nerds” And “Real Genius”

April 30th, 2013
The biggest challenge that is facing marketers in the next five to seven years is the quest to become relevant, which means that they need to become data geeks. In fact, it is crucial that they become bigger and better geeks than their IT counterparts. As the pendulum moves from art to science, many marketing leaders find themselves on a platform of skills that are no longer the keys to success, writes retail columnist Todd Michaud.

Instead of IP addresses, they need to think about e-mail segmentation. Instead of database clusters, they need live content marketing. Instead of disaster recovery, they need to wake up focused on integrated marketing across all digital channels. It’s as much science and math as configuring a new router, and that has many marketers nervous. And it should. But as these marketers find their way into this new world of math and science (digital relevancy), they need to be careful to not cross the fine line between being relevant and being just plain creepy.Read more...

Walmart’s Employee Mobile Trial Is That Rare Bird: It Helps Associates While Helping Corporate’s Bottom Line

April 29th, 2013
Sometimes, a program that makes associates happier—even Walmart associates—can also help the bottom line. Consider Walmart's mobile (and, to a lesser extent, desktop) program to make it easier for associates to find other work within their Walmart store.

Walmart (NYSE:WMT) has announced that it is expanding—to chainwide—an experiment to let associates more easily see work opportunities in other departments at their store, as a way to supplement their pay. "For example, a bakery or deli associate can now request to work an available shift in electronics or the lawn and garden area and vice versa," the Walmart statement said, adding that "this program is showing value beyond filling available shifts. It's providing associates the opportunity to help build their careers by learning about different departments, which helps strengthen our stores and benefit associates and our customers."Read more...

Tesco Really Doesn’t Like NFC

April 26th, 2013
Near field communication (NFC) is retail's whipping boy these days, with almost every analyst and vendor going out of their way to point out how poorly it's done and how bleak the NFC future is. And although deep shopper apathy about NFC has justified many of those critiques, major chains—wanting to keep their options open—have hesitated in outright attacking NFC. That's why a blistering critique from the world's third largest chain, Tesco, is so potentially devastating.

"NFC was revolutionary 10 years ago but I think it just might have passed its sell-by date," Lyndon Lee (Tesco Enterprise Consultant Architect) told attendees at a mobile payments conference in London this week, according to a report in NFC World. "Is mobile NFC at the right place, at the right time? I don't see any real movement or activity. NFC usability is not really revolutionary and, for the general public, is it really that cool? I think the next generation won't think it's cool enough for them and they won't use it. Mobile NFC is unappealing."Read more...

The Legal Risks Of External Surveillance

April 25th, 2013
The cooperation of retailers like Lord & Taylor in the Boston bombing investigation proved to be invaluable and provided the most important clues to catching the two terrorism suspects. But retailers should be wary about using that incident as an invitation to increase the amount of surveillance that they conduct both inside and outside of their stores. Video surveillance, although a very powerful tool for certain things, can lead to loss of customer confidence, and even to liability, writes legal columnist Mark Rasch.

In the United States, it is generally presumed that the use of video surveillance technology in non-"private" places ("private" as in bathrooms and changing rooms) is perfectly legal. Unlike audio surveillance, which is regulated by federal and state law, there appears to be little regulation of video surveillance technologies. Retailers regularly employ them for loss prevention purposes, inventory management, and to defend themselves in liability lawsuits such as workers’ compensation claims or "slip and fall" claims by customers. Video surveillance technology can also be useful in tracking customer behavior and traffic patterns; footfall analysis; to evaluate the effectiveness of advertising or displays; and even to evaluate the gender, age and behavior of customers.Read more...

Facial Recognition May Not Work For Security, But For CRM, …

April 24th, 2013
With all of the in-store changes being pushed by mobile—including the long-overdue-predicted disappearance of the cashwrap—retailers are going to be moving payments in-aisle and pretty much anywhere instore. Does facial recognition make sense? One vendor on Tuesday (April 23) tried, with a system that allows facial recognition to unlock a refrigerator, which determines which products are removed based on weight.

Although the current version of the system has serious technical limitations, the potential is probably greater for facial recognition than any other technology. Unlike PIN, cardswipes or any other form of biometrics, facial recognition has the promise to do far more than verify identity, including guessing at emotional state, gender, age and other attributes. Selling suntan lotion? How about the ability to identify shoppers with deep tans? Want to be able to tailor suggestions made to first-time shoppers based on gender or age? With a thermal scan comes the ability to pitch hot cocoa to shoppers whose skin is especially cold or ice-cold lemonade to those whose skin is especially hot. (It could factor in the outside temperature so that it doesn't confuse someone who has been working in the sun with someone who is just running a fever. And if that shopper does have a fever, how about 50 cents off Tylenol?)Read more...

Online Sales Tax Bill Could Help Chains With Taxes, Too

April 24th, 2013
Online sales taxes are marching toward reality much faster than anyone would have expected even a month ago. The "Marketplace Fairness Act," which would allow states to collect sales taxes through online retailers even if the merchants don't have physical operations in those states, is being debated in the U.S. Senate this week after being fast-tracked to avoid the Senate Finance Committee, where every previous version of the bill since 2001 has died.

One key element of the bill that won't relieve the tax pinch but should simplify the implementation: A state can't start requiring collection of the taxes until it provides free software that nails down all the complexities of that state's sales tax structure, including automatic calculation of what rates are owed on which products for any location in the state.Read more...

Gap’s Take On Typical Buy-Online-Pickup-In-Store Programs: Too Efficient

April 24th, 2013
When Gap looked at buy-online-pickup-in-store programs, the president of Gap digital saw the programs that others chains have as very efficient. Indeed, far too efficient. It allowed the shopper to come in, get their merchandise and leave far too quickly. The chain on June 10 will launch its answer to this feature, something called reserve-in-store, and it is designed to get the shopper into the store and to keep them there for as long as practical.

The most concrete difference between the two approaches is that Gap will force shoppers to pay for their goods in-store. After it's reserved online, the customer has until the end of the next business day to show up, pay and pick it up. That's good for getting shoppers deeper into the store, but not so good for guaranteeing the sale.Read more...

Data Breach At Gunpoint: Kmart Armed Robber Gets Pharmacy Files

April 23rd, 2013
It is IT's worst nightmare: What if an armed violent criminal hits the store and empties the safe and, perhaps unintentionally, takes our unencrypted data backup? It happened to Kmart at its store in Little Rock, Ark., according to a statement parent company Sears issued Monday (April 22). The statement, which came more than a month after the March 17 armed robbery, was forced by rules from the Health Insurance Portability and Accountability Act (HIPAA). At 8:55 PM, some 55 minutes after the store had closed, the intruder confronted the store's assistant manager, who had just closed the store for the night, when he went into the parking lot to get to his car.

The thief stabbed the assistant manager's car's front driver side tire, presumably so that the assistant manager would be occupied when the thief pointed a silver gun at him and ordered him to open the store and to then open the safe, according to the police report. The thief helped himself to the contents, including about $6,000 in cash and that day's backup disk. The disk, which was unencrypted and apparently not password-protected, included the full names, addresses, dates of birth, prescription numbers, prescribers, insurance cardholder IDs and drug names for some 788 customers, according to Sears. Read more...

Online Sales-Tax Bill Could Get Senate Votes This Week

April 22nd, 2013
A proposed law to let states collect online sales tax was fast-tracked by the U.S. Senate on Thursday (April 18). That means the measure, which was officially introduced on Tuesday (April 16), will bypass the Senate Finance Committee, whose chairman opposes the bill. A series of votes on the bill will likely begin this week. The bill, known as the "Marketplace Fairness Act," would allow states to require online retailers to collect sales tax, even if the e-tailer doesn't have a physical presence in the state.

Different versions of the proposal have been introduced in Congress for years, but all have died without a floor vote. Senate Majority Leader Harry Reid used a special process under Senate rules to bypass the usual procedure. The proposal showed some life last month when it passed a test vote 75-24 during the budget debate. A big difference this time around: (NASDAQ:AMZN), previously the biggest opponent of Congressional approval for online sales-tax collection, now supports the measure.Read more...

Amazon Issued Patent To Make Mobile Purchases Anonymous

April 19th, 2013
When Amazon was awarded a patent this week to allow for anonymous online purchases—anonymous from shopper to shopper, not anonymous to Amazon—it could be the world's largest e-tailer taking its next step into payments. The actual money part of the payments are still to be handled through the same means Amazon does today—payment card, bank account debits, gift cards, Amazon Store Card, etc.—so it's not about Amazon becoming a processor. What it does, though, is add a layer on top to allow consumer-to-consumer transactions to be done without sharing private information with strangers. (Or, much worse than strangers, relatives.)

When this approach would make sense depends on the nature of the transaction. If the purchase involves the seller sending a physical product to the recipient, the recipient has little choice but to reveal name and street address. But for digital purposes, it could work well. And it might even work with physical shipments, assuming the recipient uses a post office box or some similar alternative.Read more...

New FTC Geolocation Ruling Will Force Retail Data Changes

April 18th, 2013
On Monday (April 15), the U.S. Federal Trade Commission (FTC) cut a deal with some manufacturers whereby they agreed not to include "phone home" software, which would tell the leasing company the address of the computer or other device without the express consent of the lessee. The retail bottom line: All of those apps you're using to gather shopper information may now legally require very specific notices. That, plus the always-feared opt-out for gathering any geolocation data. Uh-oh.

The FTC consent decree involves shoppers who lease computer equipment and other devices equipped with GPS tracking or other tracking software, pens legal columnist Mark Rasch. If a consumer fails to make a scheduled payment, or if they default on the terms of the contract, the leasing company would activate the software, which could do things like turn on the cameras on the computer, capture keystrokes on the computer, or use either Internet protocol or GPS tracking to determine the exact location of the computer. In this way, the retailer would be able to engage in a form of "electronic repossession" of the device, either shut it down completely, or sending someone in to actually physically retrieve the device. Read more...

Boston Bomber Caught On Lord & Taylor LP Camera?

April 17th, 2013
Loss Prevention security footage from a Boston Lord & Taylor located across the street from where two bombs had detonated near the Boston Marathon finish line on Monday (April 17) captured footage of someone leaving the bag with the bomb in position. This is far from the first time retail security video has been used to help solve a crime that does not directly involve that retailer, but it might go down as one of the most historic.

The bombing, which killed three people and injured 176 others, was one of the more devastating terrorist attacks in the U.S.. The footage from a surveillance camera at Lord & Taylor "has provided clear video of the area" but law enforcement officials were initially vague about what was captured, according to The Boston Globe. "The camera from Lord & Taylor is the best source of video so far," said Dot Joyce, a spokeswoman for Boston Mayor Thomas M. Menino.Read more...

Interchange Judge Orders Retailers To Change Anti-Settlement Websites

April 17th, 2013
Retailers who oppose the proposed payment-card interchange settlement will have to change the information posted on their websites, a federal judge ordered last Thursday (April 11). The changes required include links to the official site that merchants are supposed to use for objecting to or opting out of the settlement—and a banner stating that the judge determined previous information on the sites to be misleading.

In a hearing in Brooklyn on Thursday afternoon, U.S. District Judge John Gleeson said that unhappy plaintiffs, including the National Association of Convenience Stores, the National Restaurant Association and the National Grocers Association, and their lawyers in the class-action suit have until today (April 18) to decide on a plan for fixing the information on the sites.Read more...

As Many As 2.4 Million Card Numbers Stolen in Breach at Regional Grocery Chain Schnuck’s

April 17th, 2013
Who says regional chains can't compete with the big boys? On Sunday (April 14), the 100-store Schnuck Markets grocery chain revealed more details about the breach it reported in March, and the numbers are impressive: 79 stores breached, with as many as 2.4 million payment card numbers potentially stolen over a four-month period. That puts it in the same class as breaches in recent years at Barnes & Noble, Michaels, Aldi and Hancock Fabrics stores.

But unlike those attacks, Schnuck's said its PINpads were not tampered with—the attack was apparently done entirely through malware implanting somehow on Schnuck's payment-related systems. An even more troubling revelation: The breach activity seems to have begun on Dec. 1, less than a month after the chain's QSA validated its systems as PCI DSS compliant.Read more...

For The First Time, Amazon’s March Traffic Is Higher Than December. Figuring Out What That Means, Though, Is A Lot Trickier

April 17th, 2013
For years, it's been a given that major e-tailors see December as their most active month, and that's certainly been the case for Amazon (NASDAQ:AMZN). Until now, apparently. New figures from Comscore show March 2013 as Amazon's highest traffic month ever.

The significance of Amazon having its highest month ever is minimal, as the world's largest e-commerce site has repeatedly broken its own record, as its traffic has grown over time. But the fact that Amazon saw more traffic in March—a traditional ho-hum traffic month—than December is noteworthy. To be fair, the Comscore figures show that March only barely beat December (105.3 million unique visitors for March 2013 versus 104.8 million for December 2012), but that marks the first time March has even come close. March 2012 saw 90.2 million versus December 2011's 97.4 million, and March 2011 had 61.5 million compared with December 2010 at 76.7 million, according to Comscore figures.Read more...

Walmart Joins NRF, Ends Longest-Running Retail Feud Ever

April 16th, 2013
Walmart has now officially joined the National Retail Federation (NRF) as a member. For those new to retail, this may seem to be no big deal, but the background is that Walmart (NYSE:WMT) and the NRF have been in what amounts to a blood feud for decades.

Why have the world's largest retailer and the world's largest retail organization been doing this Hatfields-and-McCoys thing? This all started back in 1969, when the NRF was known as the National Retail Merchants Association and Walmart's annual revenue was about $30 million (about $190 million in 2013 dollars). According to several people involved, the bad feelings started when Walmart founder Sam Walton came to New York City—where the association was based at the time—and lobbied to join the group. They did something that one doesn't do to Sam Walton: They rejected him, saying that they didn't want Walmart as a member. Given that there is nothing that has been more a part of Walmart's culture than holding a grudge, that rejection kept Walmart out of the association for 44 years.Read more...

Starbucks Weighs In On “Download Mobile App Vs. Get Customers In-Store” Debate. And The App Won

April 15th, 2013
A classic retail mobile question is whether it's better to get shoppers in the store or to get them to download the retail mobile app. Starbucks (NASDAQ:SBUX), which has one of the most successful mobile payment programs in retail and also happens to not have the typical online-offline internal corporate conflicts, has come down squarely on the "'tis better to get the app downloaded" side.

For years, the coffee chain has pushed a promotion called Pick Of The Week, where it gave free copies of various pieces of digital media (songs, apps, games, etc.) to shoppers who went in-store and grabbed a card with a code on it. As of April 9, Starbucks has changed the program, no longer requiring the card to get the digital goodies. All it requires is downloading the app. "The intent is really to build a relationship. You don't need to go into our stores," said Linda Mills, a Starbucks senior manager for global brand public relations. "This is about educating about our product offerings and just engaging with our customers."Read more...

The Hannaford Data Breach Case Lives On. Lawyers Ask For Judge To Reverse Himself

April 12th, 2013
Lawyers for consumers affected by a huge data breach involving the Hannaford grocery chain have asked a federal judge to reverse himself and to allow a class-action lawsuit against the grocer to proceed. In a twist, the attorneys are asking that any awarded money be given to the bank officials, who would then—in theory—distribute it to victim consumers.

Attorneys wrote to U.S. District Court Judge D. Brock Hornby that the Hannaford case allows for banks to be paid directly. "This can all be done without disclosure of the actual identity of any bank customer. It is hard to imagine that a card-issuing bank would not cooperate in a process that would provide cash benefits to its customers," the filing said. No, it's really not at all hard to imagine the likes of Chase Manhattan and Fifth Third not being at all cooperative with a new and untested method.Read more...

The Claw Beats The Taxman

April 11th, 2013
Remember as a kid going to the arcade and playing "The Claw?" You know, the machine that contained a pile of plush toys, where you would put in an endless stream of quarters, and hopefully be able to snag one of those toys? After about $10 worth of tries, you would eventually win a stuffed flounder worth about a quarter, right? Well, the Texas Supreme Court has weighed in on the sales tax consequences of that transaction,which comes down ultimately to the questions of what did the consumer pay for, and what did they receive? And this might provide some limited guidance for other retailers, pens legal columnist Mark Rasch.

When you sell something, the price is supposed to be a bargained-for negotiation between a willing purchaser and a willing seller. You are buying a product or a service. Tub of popcorn, $2. Tub of popcorn at a movie theater, $6 (but for another 25 cents you can get a jumbo!) The consumer is buying a product, the product has a specified "value," and that transaction is called a sale. And the government gets a slice of that "sale" – maybe 6 percent of the sales price. Sales taxes typically apply to retail sales (merchant to consumer) of non-exempt tangible personal products, and to certain specified services as well.Read more...


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