Evan Schuman's StorefrontBacktalk

Why is it that the more retail execs applaud the brilliance of a merged-channel strategy, the more chains roll out everything but? Michelle Tinsley, director of transactional retail at Intel, thinks she’s figured it out. It really is just a matter of culture.

“There is a lot of infrastructure and culture built around today’s model of doing retail, which—unfortunately—is still historically a brick-and-mortar type of model. So your incentive plans, your enterprise systems, all are gauged toward a brick-and-mortar. In the last five to 10 years, we’ve added onto that an online capability. But it’s very much bolted on,” Tinsley said. “Even organizational structures have the online version of the store competing with the brick-and-mortar.” Tinsley was a guest this week on StorefrontBacktalk Radio, where she discussed ways to push merged-channel strategies that will actually get them deployed.…

But even better, of those Amazon shoppers who saw that icon and then made the purchase, most of them ended up not using same-day delivery, opting instead for next-day. Given the way Amazon Prime is priced, same-day didn't typically cost any more than the $3.99 next-day pricing. So what is it about same-day that is so enticing that it drives 25 percent conversion boosts but is so unattractive that shoppers opt to not use it? Is this like those people who post burglar alarm system signs but don't use the actual service, because the sign delivers 90 percent of the benefit?Read more...

The attack sought order numbers—which in turn enabled a shipping address to be changed and free replacement merchandise to be dispatched—and it highlighted various problems that retailers could easily fix but don't. For example, do CS reps take the time to review chat transcripts and activity history in an effort to spot repeated fraud attempts? Shouldn't a change of address set off all types of alarm bells? In this instance, it was to a maildrop that reshipped packages overseas, and that specific address had been noted in Amazon's own records. The system hadn't been told to flag anything going there, even after it had been discovered?Read more...

It then took more than 12 hours (including a false start or two) for Amazon's team to re-create the data, and several more hours to slowly get the system working again. Total outage time: 23 hours and 41 minutes. In short, Amazon's cloud forgot everything it knew about how to let customers do load balancing.Read more...

Runner up was Victoria's Secret, which had 18 hours of total downtime but spread it over more than 30 short outages, mostly between 3:00 AM and 5:00 AM. That smacks of maintenance outages that were actually planned, even if they weren't planned very far in advance.Read more...

It’s no secret that NYC-area online grocer FreshDirect had an outage on Christmas Day. And it’s no secret why: The company apparently lost track of the fact that its domain name registration expired on December 23. That’s bad enough. What’s worse is that the grocer still doesn’t seem to be on top of its domain name problem.

After the site was back online, FreshDirect told The Wall Street Journal and Bloomberg News that its registration has now been renewed until 2024. Except, well, it hasn’t: The Whois record for freshdirect.com says the domain name now expires in 2022—and once again, right before Christmas. Any bets as to whether next time FreshDirect will remember to pay its domain bill a year earlier than it thinks it needs to?…

The problem for retail chains is the vagueness of definitions for sites aimed at children. Is the toy section of Walmart.com such a site? What about games at McDonalds.com? Then there's the Catch-22 of asking ages online. If you ask, you'll be required to segregate the data from anyone in that age group and handle it—no pun intended—with kid gloves. (No pun intended. That was a play on words, not a pun.) And if you don't ask, you have the perfect defense that you didn't knowingly collect data from under-age shoppers without parental consent. Did the FTC really intend to encourage what Legal Columnist Mark Rasch calls the Sgt. Schultz Defense?Read more...

The last time these Wall Street guys almost accurately picked a vanishing retail brand was Borders. It turns out that E-Commerce makes even the most zombie-like retail names harder to kill. But that's not the only thing involved.Read more...

The second problem is that Best Buy Chat is often not available and shoppers are met with a pop-up saying "Sorry, no Best Buy chat representatives are currently available. Our chat representatives are currently helping other customers. Please call us at 1-877-xxx-xxxx instead." If the chat is that busy, how long will the hold time likely be? Kind of makes an E-mail option look attractive, no?Read more...

This new program is bizarrely ordinary, offering functionality that Amazon—and almost all of its rivals—have offered for years. Could this reflect Amazon's adapting to a new environment, where many of its longtime competitive advantages—such as sales-tax-free sales—are going away? Even its move into same-day delivery is not a differentiator anymore, with Walmart, Google, eBay and Macy's toying with the same program.Read more...

If ever a retailer missed the point of merged channels, this is it. Does anyone think a customer would wait an hour in a store—or on the phone—for a response after asking an associate, "Is this in stock?"Read more...

That's bad news, not just for this same-day test, but for the eight to ten chains reportedly signed up for the trial who will lose days' worth of deliveries on the critical run-up to Christmas Eve.Read more...

This puts retailers in an awkward position. As malls and stores track mobile device activity, retailers will likely have no idea the age of the shoppers associated with phones and tablets unless they ask—which is exactly what COPPA is intended to prevent.Read more...

When asked if they personally want to use mobile as a payment device, the overwhelmingly strongest answer—across literally every demographic group sampled—was the single answer of "not very or not at all interested." That's a wonderful statistical illustration of today's challenge for mobile payment: A lot of people think it's a great idea, but they personally have no interest in doing it. It's great, though, they believe, for everybody else.Read more...

The ongoing saga of Card Activation Technologies (CAT)—the gift card patent owner that has been suing many of the nation’s largest retailers including RadioShack, 7-Eleven, Nordstrom, Macy’s, Starbucks, JCPenney, Sears, OfficeMax, TJX, McDonald’s and Walgreens—took another bad turn for CAT as a federal appeals panel upheld on Monday (Dec. 10) a federal court that had ruled against CAT. CAT has previously said that all of its survival hopes are based on a successful appeal. The financially strapped CAT’s only choice now is to try an appeal to the full circuit or even to appeal to the U.S. Supreme Court directly, both of which would be considered long shots.

Still, CAT attorney Mark Peterson said his client has about 30 days to decide its next move. The case that the Third Circuit sustained included a memorable line from Kent A. Jordan, who was serving as trial judge but who is primarily a member of the appellate panel. Jordan referred to one CAT claim, involving granting another party more time to amend a complaint, with the comment that “it takes some chutzpah to mount those objections.” It’s likely to take more than chutzpah for CAT to mount another appeal.…

Facebook went down for about an hour on Monday, apparently due to what Facebook said was “a change to our DNS infrastructure.” Like many DNS mishaps, the users who couldn’t reach the site were scattered around the world, as many could get through when their local DNS lookups updated. But in a heads-up for all of retail, Facebook’s mobile sites never went down.

Based on pings to both Facebook.com and m.facebook.com, Facebook handles load-sharing by routing (non-mobile) traffic to different servers, and that’s probably what the DNS infrastructure change they made had to do with. Because the mobile site was not using the DNS load-balancing—all those requests went to the same IP address—it didn’t suffer from the problem. This is exactly the potential advantage that retailers want to leverage for their sites. By keeping the mobile sites active—and, of course, available for desktop traffic too—it’s one additional level of security when the site has problems. Don’t forget that when the site goes down, a lot of in-store functionality can crash right along with it. The lesson is that you want a separate IP address for your mobile site, so you’re not putting all your IP eggs in one basket.…

When Walmart started pushing its same-day delivery, I don’t think they had in mind what Kansas City Walmart shopper Marsheanna Clark did on Saturday (Dec. 8). Then again, neither did the newborn that she delivered there. The 20-year-old, 39-weeks-pregnant Clark was standing in the checkout lane when soon-to-be-newborn Marshayla decided that checking out would be a good move. Her water broke, which is an indication of a birth that needs to happen quickly. (Not always, though—my wife’s water broke some 15 hours before our daughter was born, but I think that was mostly done to torture me.)

As Clark went to the parking lot and was about to create her very own Walmart self-checkout lane, an off-duty police officer saw her and assisted in the parking lot customer creation. An

impromptu delivery area was created using one of the Walmart benches, with assistance from a firefighter and someone described merely as a Salvation Army bell-ringer. (Look for an imminent Walmart ad touting a woman who grocery-shopped at the Kansas City Walmart and left the premises 10 pounds lighter.)…

Supervalu’s Jewel-Osco grocery chain is taking an unusual tactic. It seems to be taunting Twinkie aficionados—who have never been known as the most restrained of shoppers—to run down to its stores and clear out inventory. The chain put out a statement Monday (Dec. 10) that it will be receiving “what is believed to be the final shipment of Twinkies in the country” and that the 20,000-box shipment will be available on Tuesday (Dec. 10) morning. “There will be no limit on how many items a customer can buy” and the items will “be sold at regular price,” the statement said.

The move, which also includes Ding Dongs and Zingers, is baffling. There is every reason to suspect that Twinkie-maker Hostess Brands—which is going bankrupt—will sell the Twinkie line to somebody as that specific brand can undoubtedly still make a profit, especially with new pricing. Hence, there will be more Twinkies, but not from a company called Hostess. Yes, the idea is sort of like a profitable loss-leader tactic, where the idea is to sell lots of stuff to those Twinkie-loving folk. But what happens when the inventory runs out? Could get ugly. Maybe Jewel-Osco misses the Walmart Black Friday types of damage and pandemonium? …

Some news stories, having picked up on a published U.S. Federal Trade Commission (FTC) Q&A, said that Best Buy wasn't being generous, that federal law required that the consumer could keep the extra iPads and not pay for them. Like almost all matters legal, pens Legal Columnist Mark Rasch, the truth is not quite that clean. The laws referenced are intended to punish retailers from shipping items to people who bought nothing and then trying to force them to pay. A shipment in error—especially one to a legitimate customer—was never envisioned, nor was accidentally sending a larger quantity of that which was legitimately being purchased.Read more...

Didn’t we learn this lesson last year with Best Buy? On Black Friday morning, a Houston-area couple got up at 2:00 AM to order thousands of dollars’ worth of appliances from Sears. They got their order confirmation E-mail, went back to bed—and woke up to find another E-mail telling them their order had been canceled. Then the appliances were delivered, but charged at the regular prices thousands of dollars higher. It took a local TV station’s cage-rattling to get Sears to honor the Black Friday prices.

Sears’ explanation—the system sent confirmations before checking inventory but sent the cancellation E-mail almost immediately—misses the point. It’s 2012, not the dawn of E-Commerce. Inventory is online. Customers don’t need to be reminded that they just placed an order, only notified that their order will be honored. There’s no reason for two E-mails, nor is there any excuse for confirming an order by E-mail before checking inventory. That will take an extra 30 seconds? Five minutes? It’s E-mail. Nobody expects sub-second response times, not even customers. They do expect a “confirmation E-mail” to confirm they’ve made a purchase—and it’s long past time for retailers to get that message.…

Retailers have become—understandably—quite smitten with texting shoppers, given the immediacy and intimacy involved. This starts with capturing their mobile numbers, which has to be done very carefully or retailers will suffer the legal headaches that now bedevils Walmart and Papa Johns.

But there’s a huge downside with texting. Namely, many shoppers either do not have texting plans or they have very limited texting plans. That means those sale price heads-ups are costing your customers’ money and, most likely, alienating them to a massive degree. Although harvesting mobile numbers is relatively easy, identifying who has a generous texting plan is not. AT&T, in what the telco says is an industry first, on Wednesday (Dec. 5) unveiled a program for retailers to send marketing texts to shoppers without those shoppers racking up charges, whether or not they have a text plan. Shoppers must use AT&T and retailers—initial chains include Gap, Staples, Zales and Neiman Marcus—will have to work within the limits of AT&T’s program, suggesting that the texts may be able to flow as freely as a chain might want. But it’s an interesting workaround for the text customer charge issue.…

The Web site, where a company "publicly" advertises its goods and services and shows its prices, is similar to the brick-and-mortar store. However, unlike the store, access to the Web site is granted subject to a "contract" between the merchant and the visitor, typically a "Terms of Use" agreement linked to on the bottom of the homepage. Visit the site, and you are agreeing to these terms. Violate the terms, and you are visiting the site unlawfully, exceeding the scope of your authorization to use the site. Or, in legal parlance, violating the computer hacking statute, 18 U.S.C. 1030.Read more...

This new pricing transparency could severely undermine the purchase behaviors these optimized prices were supposed to cause. Will shoppers wait out fluctuations, knowing that prices will eventually drop sharply again? Will the dizzying speed of the changes make them ignore the price wars entirely and default to the chain and products they're most comfortable with? Should this new shopper pricing transparency change how retailers use pricing optimization? Chains today are soon going to have three buckets of pricing optimization options to crunch: internal, such as inventory level, close-outs, slow-moving SKUs, manufacturer incentives, etc.; external, such as competitor price monitoring or what rivals are running out of; and customer/CRM, which is individualized pricing based on a shopper's purchase history, cart assortment and demographics—for both online and, ultimately, in-store pricing.Read more...

This data-retentiveness puts these chains in a tricky position. Every retailer wants large quantities of CRM information from customers. Telling those same customers they don't have control over information about their store-branded credit-card accounts (as in, customers can access it themselves but can't have an aggregator collect it for them) risks turning the image of chains from a friendly retailer to that of a paranoid Big Brother—especially as chains start behaving more like banks.Read more...