Is the Retailer/Supplier Disconnect Going To Get A Lot Worse?

Written by Evan Schuman
October 5th, 2006

A report slated to be published next month by Forrester Research suggests a very imminent trainwreck between manufacturers and retailers over the red-hot topic of localized store assortment, according to retail analysts who argued the issue during this week’s StorefrontBacktalk Week In Review audiocast.

This week’s panel featured Forrester Research’s Nikki Baird, the Retail Systems Alert Group’s Steve Rowen and Ken Morris of The Lakewest Group, along with StorefrontBacktalk Editor Evan Schuman moderating.

The ability for retailers to localize for various demographic segments, especially ethnic, is crucial. Michael Grover, the CIO for TWT Distributing in Charlotte, N.C., provides health, beauty and cosmetic products for a long list of major retailers and he gives a good example of the problem. “In one neighborhood store in Atlanta, which has almost 80 percent African-American customer traffic, a retailer has the same eight-foot section of hair care products that they have in a store in Minnesota with almost zero African-American customer traffic. Yet the same store in Atlanta has 42 feet, 8 shelves high, of regular hair care products that are of no use to African-Americans, like 30 plus shades of blond hair color. What is the message to the customer by this merchandising?”

But while retailers are preparing to be much more granular and localized in their stock, they are assuming that their suppliers will make this all happen. Those manufacturer/suppliers agree that the burden will fall on them, but they are more adamant that there’s no way they’ll be able to do it. “Some 62 percent of manufacturers think they are going to be the ones who will have to pack these more granular assortments, even though they don’t have that capability today,” said Forrester’s Baird.

To listen to the full discussion of the retailer/supplier disconnect, please click here.

Is the Unredeemed Giftcard About To Go Away?

Retailers today value the giftcard as much for encouraging sales as they curse it for causing accounting and security headaches and for being practically useless for CRM. But a California startup’s efforts to make giftcards more effective has a very good chance of making a difference, the panel said.

The efforts by might help giftcards in two ways: making it CRM-friendly by identifying both the buyer of the card and the user of the card; minimizing the unused portion of money left on the card by PlasticJungle selling that to other customers who will use it. To listen to the full discussion about the giftcard dilemma, please click here.

Is Hitachi’s New Active RFID Tag For Tracking Employees …. Or Customers?

The panel was skeptical about Hitachi’s new active RFID tag that it introduced this week, wondering whether the sophisticated high-priced tag was intended to do a lot more than merely track employees during an emergency, which is how it’s being presented.

To listen to the full discussion about the Hitachi tag, please click here.

Amazon Abandons Key A9 Search Functions

When decided to abandon several major?and highly-touted?features of its A9 search engine, it raised many eyebrows on our panel.

Among the capabilities are the ability for the system to remember a huge number of earlier searches and to show recent images of what that location looks like. If the concern was privacy, why give it up now, so many months after launch? Was it an inability to sufficiently sell the product? Again, that would have likely been discovered prior to launch. Perhaps it was too far afield from Amazon’s core mission (whatever that is these days)?

To listen to the full discussion about Amazon’s change of heart, please click here.


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Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
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