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Electronics Top Shopper Back to School Lists, SortPrice.com Says

Posted in Ecommerce, General News / Technology, Retail, tagged , , , on August 12, 2011 | 1 Comment »

With the back-to-school shopping season in full swing, what items are consumers targeting most?

According to price comparison site SortPrice.com, electronics and gadgets are once again the most sought-after products in 2011.   The company rolled out its annual top 10 popular back to school products list yesterday, which is compiled using site traffic and user searches.

Gone are the days when pencils, pens, and spiral-bound notebooks dominate back to school shopping lists, though SortPrice is quick to point out that the economic climate is still having an effect on consumer buying habits, even now during the industry’s second-biggest shopping period of the year.

“With the economy still clearly affecting consumer buying habits, we’ve got an interesting dynamic going on this back to school season,” says Doron Simovitch, SortPrice co-founder and CEO. “While parents seem committed to spending extra time looking for the best price on back to school essentials, that diligence hasn’t necessarily translated down to students, who are still targeting higher-end electronics in particular as must-haves before they return to the classroom this fall.”

So what does this year’s SortPrice top 10 look like?

1- Apple iPad 2

2- Sony Cybershot Digital Cameras

3- UGG Girls and Women’s Boots

4- Acer Netbooks

5- Jansport Backpacks

6- North Face Hooded Sweatshirts and Outerwear

7- Bed-in-a-Bag Bedding Ensembles

8- Converse Chuck Taylor All-Star Sneakers

9- Diesel Messenger Bags

10- High-Definition Web Cams

We were surprised to see the iPad so high on the list given its hefty price tag but it’s apparent that more students (and their parents) are viewing Apple’s tablet as a must for a successful school year.

Thoughts on SortPrice’s list?  Leave us a comment with what you’re targeting for back to school 2011!

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Are Online Sales Taxes Confusing Consumers?

Posted in General News / Technology, Online Sales Taxes, Retail, tagged , , , , , on July 26, 2011 | 2 Comments »

The rise in new online sales tax bills in states across the nation has been a top story within the e-commerce and business press over the course of the past year or so.  It seems, however, that not everyone is reading those stories.

In a newly released survey sponsored by the International Council of Shopping Centers (ICSC), 64 percent of consumers in states that have enacted new internet taxation laws either don’t know or do not believe that they’re required to remit sales taxes on web purchases when a retailer does not collect them on their own.

“The results of this study point out that there are widespread consumer misperceptions about the requirement to pay sales tax on Internet purchases,” said Michael Kercheval, CEO and president of ICSC.  “The data shows people are confused as to whether or not they are – or should be – paying tax on online purchases.”

While the study does not elaborate on why so many people are confused about the existence of the new taxes (we’ll get to that later), it does contain some other relevant important data.

For example, 93 percent of the 1,000 consumers polled said they would continue to shop online if taxes were collected at the point of purchase, and even in the event of 100 percent compliance on online sales tax collection among merchants, consumer online shopping behavior would not be materially or substantively impacted much.

Despite that, it would appear that online shopping has not completely made traditional shopping and retail storefronts obsolete just yet.

Nearly three quarters of the consumers believe brick and mortar stores have an “important role to play in the 21st century marketplace.”  And in that vein, many of the respondents selected “choice” and “convenience” as key decision criteria, in addition to price, when contemplating a purchase.  This indicates at least a continued partial reliance on brick and mortar shopping options.

From our vantage point, the ICSC seems to be supporting online sales taxes in order to level the playing field with brick and mortar retailers, which is to be expected given the scope of their work.  The study’s press release openly touts the Main Street Fairness Act, which we’ve covered here before, calling it a first step toward establishing that marketplace for a new century.

Still, we can’t help but wonder if this study was more focused on the confusion surrounding new taxes or simply a way to beat the drum for brick and mortar retailers on the whole.  Granted, the ICSC does adequately identify a problem here, citing low consumer compliance with tax rules for online purchases.  And yes, the study does make the next logical connection: that such consumer misconceptions have led to an unfair advantage for online retailers over their brick and mortar counterparts.

But why does the ICSC then go on to tout mostly vague data about the importance of those brick and mortar stores rather than delving deeper into the obvious question that arises from this study (at least in our opinion):  why are consumers confused about their online sales tax responsibilities?  Is it a question of poor communication between lawmakers, regulators and their constituents?  Are shoppers feigning ignorance?  Are retailers not informing shoppers of their tax duty?  Is the confusion a by-product of hastily written and implemented laws that don’t include adequate considerations for enforcement?

Now look, economists, we are not.  But when nearly two-thirds of the shoppers in states using online sales taxes are in the dark on the issue, it certainly begs the question: what’s the point of a tax if no one knows about it and thus, isn’t paying it?  If online sales taxes are to fulfill the aim they’re designed for, then there needs to be a better analysis and reconciliation of this confusion that the ICSC says is rampant among shoppers.

What’s your take?  Why are consumers confused about paying online sales taxes?  Leave us a comment with your response.

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Groupon’s Privacy Policy Catches Lawmakers’ Attention

Posted in General News / Technology, Mobile Commerce, tagged , , , , , on July 22, 2011 | Leave a Comment »

Having established itself as the clear-cut leader in the growing daily deal industry with an army of loyal fans and customers as well as an anticipated $3 billion in revenue this year alone, one would be hard pressed to say that Groupon has anything to worry about these days.

Or do they?

Two members of Congress, Rep. Ed Markey (D) of Massachusetts and Joe Barton (R) of Texas, smell something a bit fishy when it comes to Groupon’s privacy practices and have submitted a written inquiry to the company requesting more information, specifically on the issue of possible ‘mobile tracking’ of customers.

Recently, Groupon updated its privacy policies and part of the revision was a clause that allows the company to track the locations of mobile customers, even when the Groupon mobile applications are closed on their mobile devices.  Groupon initially said the change was part of its expansion of Groupon Now, which relies on geo-location technology in order to offer shoppers deals based on their real-time locations.

The policy states:

If you use a Groupon mobile application and your mobile device’s settings allow it, we may collect mobile location information from your device.  Our application may be designed to collect information even if you are not logged into the Groupon application.

Included in the policy is another clause that says Groupon can share similar information with its retail partners that offer the actual deals featured in the service.  This enables those merchants to communicate directly with consumers and target them with advertising as well.

The Markey and Barton inquiry requests an explanation from the company on how exactly it gathers location information when a user’s application is turned off, whether or not Groupon gives its customers an op-out option and whether its mobile data collection policy is consistent across all devices.

The pair, co-chairs of the Congressional Privacy Caucus, also wants more information on how and why Groupon plans to collect, and then use, consumer information.  One passage of the letter references how the policy approaches children:

“Groupon indicated that it omitted a section in its previous privacy policy discussing children’s information because its web site is not geared toward children,” it reads.  “What mechanisms does Groupon have in place to identify the age of its consumers?”

A spokesperson for Groupon says the company has received the inquiry and “looks forward” to explaining its privacy practices and overall business model to the lawmakers.  Groupon has until August 10 to respond.

Thoughts? Leave us a comment!

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SortPrice’s Facebook Store Application Gets Boost with New Flash Sale Feature

Posted in Ecommerce, Facebook Commerce, General News / Technology, Online Shopping, Retail, tagged , , , , , , , , on July 20, 2011 | Leave a Comment »

Flash Sale for Facebook StoresAlready one of the leading F-commerce solutions in the industry, comparison search engine SortPrice.com announced this week that they’ve added another cool feature to their Facebook Store Application that allows merchants to run Flash Sales right on their fan pages.

The company says the new component is just the latest in a long line of upgrades to its Facebook retail application, which is currently being used by more than 1,500 retailers across the nation.

According to SortPrice, the Flash Sale feature is, in part, an attempt to bridge two big recent F-commerce trends: the rise in popularity of daily deal sites like Groupon and the reality that most Facebook users tend to “Like” retail brands in the hopes of getting a special deal as a result.

“We’re really excited to offer this feature, since Flash Sales and the daily deal models have proven to be very effective and popular tools for retailers,” said Doron Simovitch, the company’s co-founder and CEO.  “Shoppers love such deals for their exclusivity and merchants can really capitalize on that potential by quickly and easily incorporating flash sales into their overall social shopping offerings.”

SortPrice merchants who are operating Facebook stores through the company can run one Flash Sale per day (for now) on their Facebook fan pages, listing a specific product for a discounted price for a limited time, with the option to include a promo code or coupon if they wish.  Simovitch says the Flash Sales are ideal if a merchant has a high volume of merchandise they need to move quickly or they just want to reward their Facebook fans for their loyalty.

“It’s another way to engage your Facebook fans and provide them with an incentive, which is ultimately the name of the game when it comes to social shopping,” he said.

One of the major benefits of the component is the ease in which a Flash Sale can be set up—SortPrice says retailers can have one up and running in less than five minutes by picking an item from their catalog and then setting the special price and time frame for the sale right in the management console that SortPrice provides to all of its retailers.

The console is also where SortPrice retailers can control the look and feel of their Facebook stores, enable or disable particular components, enact side-by-side product comparison features and more.

Keeping things consistent throughout its broader application, SortPrice has also included all of the usual social shopping features in the new Flash Sale offering.  Users can “Like” or comment on Flash Sales and share them with their Facebook friends as well.

We’ve followed a lot of SortPrice’s F-commerce work in the past few years.  They were, after all, one of the first companies to even offer retailers a storefront application back in 2008 and since then, their client list is an impressive 1,500-plus national retailers.  An earlier SortPrice press release said those merchants posted more than $3.78 billion worth of merchandise on their Facebook stores in 2010 and with the Flash Sale component, we’re guessing the company will pick up quite a few more clients in the coming months.

As always, we welcome your thoughts and comments!

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The End Comes for Borders

Posted in Ecommerce, General News / Technology, Online Shopping, Retail, tagged , , , , , , on July 19, 2011 | Leave a Comment »

Borders, which gamely filed for bankruptcy earlier this year and then committed heavily to a reorganization effort to save itself, is out of options and will now begin the process of liquidation.

Thus ends the tenure of one of America’s most popular retail brands.

“Following the best efforts of all parties, we are saddened by this development,” Borders group president Mike Edwards said yesterday.  “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, e-reader revolution, and turbulent economy, have brought us to where we are now.”

In January, Borders filed for bankruptcy and listed assets of $1.27 billion and $1.29 billion in total debts.

Earlier this month, Borders had finalized a preliminary agreement to be bought at auction by a company called Direct Brands for roughly $215 million in cash plus the assumption of another $220 million in debt.  The bid by Direct Brands, a component of the Phoenix-based investment banking firm Najafi, was a ‘stalking horse bid’—defined as an initial bid on a bankrupt company’s assets by an interested buyer chosen by the bankrupt company itself with a predetermined floor for minimum acceptable bids.

Last week, the creditor committee that was tasked with overseeing the Borders bankruptcy plan rejected the bid from Direct Brands on the grounds that it was too low.

That cleared the way for the U.S. Bankruptcy Court for the Southern District of New York yesterday to approve the sale of the company’s assets to two liquidation firms—Hilco Merchant Resources and Gordon Brothers Group—instead.

The remaining 200 or so Borders stores still in operation will be shuttered by Hilco and Gordon starting immediately through the end of September.  The two liquidation firms also assume immediate ownership of all of Border’s intellectual property rights as well as Borders.com but it remains unknown when the company’s e-commerce operations will officially end.

Quite a few major book publishing houses are still holding IOUs from Borders, most notably Penguin Putnam (for $41.1 million), Simon & Schuster ($33.7 million) and Random House ($33.4 million).

“For decades, Borders stores have been destinations within our communities, places where people have sought knowledge, entertainment and enlightenment, and connected with others who share their passion,” said Edwards. “Everyone at Borders has helped millions of people discover new books, music, and movies, and we all take pride in the role Borders has played in our customers’ lives.”

What are your thoughts on the Borders liquidation? Leave us a comment below!

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We’re on Vacation!

Posted in General News / Technology on July 11, 2011 | Leave a Comment »

The small staff at Ecommerce Junkie is on summer vacation for the week of July 11. As such, we won’t be posting any news this week. We’ll be back in earnest on Monday, July 18 and the rest of the month will include our next Junkie award winner and (hopefully) some excellent guest contributions in addition to our regular content. We appreciate your patience and understanding as we enjoy some well-deserved rest!

If you have news, continue to send it to ecomjunkie@mail.com and it will be reviewed upon our return.

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E-commerce Sales Continue Scorching Run

Posted in Ecommerce, General News / Technology, Retail, tagged , , , , , , on July 8, 2011 | Leave a Comment »

While Friday’s big economic-related news announcement was definitely a downer—unemployment nationwide has increased and now sits at an ugly 9.2 percent—web retailers are rejoicing thanks to more good news for them.

E-commerce sales in June increased 15.2 percent year-over-year according to the latest MasterCard Advisors SpendingPulse report.  For those of you keeping score at home, that now makes it eight consecutive months of double digit gains for the industry and June was the 23rd straight month of growth overall.

Are you beginning to wonder if this streak is ever going to end?  So are we.

As was the case in May, when e-commerce sales were up nearly 16 percent year-over-year, outside factors seem to be dooming brick and mortar merchants as consumers opt to stay home to shop instead.

“…unfavorable weather and high gasoline prices appear to have helped e-commerce to its eighth consecutive month of double-digit growth,” said Michael McNamara, vice president, research and analysis, for MasterCard Advisors SpendingPulse.

Not every product category in the e-commerce industry had a solid June.  MasterCard reports that online jewelry sales dipped nearly 13 percent compared to the same month a year ago.  Such a precipitous drop is fairly interesting considering that non-jewelry luxury sales elsewhere (i.e. premium restaurants, grocers, department stores and general apparel merchants) actually increased 8.2 percent in June.

Web sales in the ‘family clothing’ category also slipped, but only by 0.2 percent.

Outside of those few isolated areas though, June proved to be just the latest in a long string of robust months for online retailers.  Women’s apparel was the biggest winner among e-commerce categories, jumping 12.2 percent year over year.

The SpendingPulse report is based on retail sales across all forms of payment, including all credit and debit cards, cash and check.  MasterCard does not generally include spending in actual dollars as part of the report.

So, before you head home for the weekend, tell us what you think about this unprecedented, nearly two-year run of growth in e-commerce sales.  Is it going to continue?  If so, for how long?  Leave us your thoughts and comments

below!

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Walmart Steps Up E-commerce Presence in China

Posted in Ecommerce, General News / Technology, Retail, tagged , , , , , , , , on June 28, 2011 | Leave a Comment »

What happens when the world’s largest retailer decides to plant an e-commerce flag in the world’s most populous country?  We’re about to find out.

Walmart announced this week that it has finalized an agreement with Shanghai’s government to set up an office in the Chinese commercial city that will serve as headquarters for the retailer’s entire e-commerce operations in China.

As part of the deal, the parties will work hand-in-hand on a training program for e-commerce personnel to accelerate the overall development of online retailing in the country.

“The scale of online sales in China is expanding rapidly and is projected to match U.S. online sales in the next few years,” said Wan Ling Martello, Walmart’s executive vice president of global ecommerce and emerging markets.  “We are very optimistic about China’s e-commerce market and its growth potential. With Shanghai as our Global eCommerce’s China headquarters, we look forward to offering Chinese consumers a wider selection of quality products at good value with a great online shopping experience.”

The new office in Shanghai will report directly to Martello and Walmart Asia’s president and CEO, Scott Price.

Though Walmart has operated physical storefronts in China since 1996, it wasn’t until recently that it set its sights on establishing a stronger online retail presence in the country.  As part of that strategy, the retailer bought a minority stake in the Chinese e-commerce site Yihaodian last month.

Of course, Walmart is hardly the first U.S. retailer or e-commerce group to invest in China’s potentially huge online retail market.  This year alone, Apple, Gap, PayPal and Groupon have all set up shop there, and for good reason, too.

China’s Internet Network Information Center, the arm of the Chinese government that looks after the country’s web infrastructure, estimates that there were 161 million online shoppers in the country at the close of 2010.

Meanwhile, reports from Forrester Research project that online sales in China could reach nearly $160 billion by 2015.  By comparison, e-commerce sales totaled less than $50 billion last year.

That’s a lot of shoppers and a lot of potential revenue, to say the least.

As always, leave us your thoughts and comments!

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In Daily Deal Industry, Everyone Else is Looking up at Groupon

Posted in Ecommerce, General News / Technology, tagged , , , , , on June 27, 2011 | 1 Comment »

While the daily deals market has become increasingly crowded over the course of the past year or so, it would appear that all of the newcomers (and even those companies that have been at it for awhile) have a long way to go before they’re going to catch up with Groupon.

A new report from the customer satisfaction research firm ForeSee Results offers a glimpse of the state of daily deals industry, revealing the Groupon has carved out a dominant position that puts the company head-and-shoulders above its competition and should, for now at least, quell any concerns about the long-term viability of the Groupon business model.

ForeSee based its report on a survey this spring of more than 22,000 shoppers who actively use many of the web’s top retail sites.  Of those polled, nearly two thirds of respondents indicated that they subscribe to at least one daily deal offering.

More than half of those consumers (51 percent) said they subscribe to Groupon, giving the company a commanding two-to-one lead over its next closest rival, Living Social.  Only 24 percent of the respondents said they subscribe to Living Social, while 14 percent use Google Offers and 10 percent rely on Woot.com, which was purchased by Amazon in 2010.

The research seems to counter many in the industry who have questioned the sustainability of Groupon’s business model, particularly from the standpoint of attracting new users.

“I don’t think anyone should be signing any death certificates yet,” ForeSee CEO Larry Freed wrote in a blog post about the report. “Groupon and LivingSocial do bring in new customers, and that should be welcome news to both retailers and daily deal companies alike.”

Indeed, ForeSee’s research shows that 31 percent of the consumers buying daily deals were new customers to the merchant offering the deal itself.  Only slightly more (38 percent) were frequent customers, while 27 percent were infrequent customers and 4 percent were former customers.

And further reinforcing just how popular daily deals have become, the data reveals that more than two-thirds of the respondents have purchased a deal in the past three months and 89 percent of those redeemed their deal in that time as well

So what about you?  Where does your daily deal allegiance lie?  Leave us a comment!

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FBI Breaks Up Pair of ‘Scareware’ Crime Rings

Posted in Click Fraud, General News / Technology, tagged , , , , , on June 23, 2011 | Leave a Comment »

Chances are all of you have had to endure those pesky pop-up and online ads informing you that your computer is vulnerable to outside threats and that you must immediately update the machine’s security system.  Turns out that more often than not, those ads themselves are the threat.

The FBI and Department of Justice this week announced that a collaborative effort titled Operation Trident Tribunal has exposed and disrupted two separate ‘scareware’ international cyber crime operations.  Combined, the scams affected at least one million individuals, with losses totaling more than $70 million.

The first case, far and away the bigger of the two, was investigated by the FBI’s Seattle office.  It involved a scam that directed individuals to a website advertising a free virus scan.  Visiting the site itself, however, would infect the user’s computer with malicious software that manifested itself in the form of a never-ending stream of pop-up ads claiming the computer had been infected by a virus.

Naturally, the only way a person could get rid of the so-called virus was to buy the anti-virus software advertised at a cost of $129.  The FBI estimates that 960,000 people fell victim to the ploy, at a cost of $72 million.

The second scam, which the FBI’s Minneapolis office took the lead on investigating, involved an international crime network that was running a version of the good old cybercrime standard, malvertising.

In this case, two scammers created a fake advertising agency and then ran an advertisement for a hotel chain on the site of a prominent Minneapolis newspaper.  Once the ad went live, though, the pair altered the computer code contained within the ad itself to ensure that anyone who clicked on it would be infected with devious software that launches scareware.  This scam netted victim losses of more than $2 million.

The FBI had help on the latter case thanks to cooperative efforts from agencies in the UK, Canada, Germany, France, the Netherlands, Ukraine, Latvia, Cyprus, Lithuania, Romania, and Sweden.  Though the alleged perpetrators of the scheme have been arrested, and more than 40 computers, serves and bank accounts seized, the investigation will continue.

Of course, this episode again gives us the opportunity to remind you all just how important it is to stay diligent when browsing the web.  The FBI itself is warning computer users to keep an eye out for security alerts that don’t seem quite right, even if they contain names that seem legit (such as Virus Shield, Virus Remover, etc):

“Upon closer inspection, some elements aren’t fully functional.  For instance, to appear authentic, you may see a list of reputable icons—like software companies or security publications—but you can’t click through to go to those actual sites,” the FBI says.

Cybercrime is still as rampant as ever, even with busts like this taking a small chunk out of the overall problem.  It’s up to you to keep yourself protected!  As always, leave us your thoughts and comments!

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