A new study from the Federal Reserve Bank of Boston says that credit card reward programs have a sneaky hidden cost that the card holder doesn’t have to bear. This occurs because the fee that a retailer pays to run a credit card varies with every card, and reward cards cost more to process–in other words, the card issuer passes the cost of the rewards program on to the retailer. The retailer adapts by raising prices across the board, which distributes the cost of the reward program among all shoppers.
Ultra-cheap discounter Dollar Tree has turned off the in-store music in all of its stores, citing cost issues. On the company’s Facebook page, shoppers keep complaining that the company is being too cheap (many don’t seem to know about licensing fees for music), but Dollar Tree’s official response is that it freed up expenses to keep prices low.
Now that Walmart has finally triumphed over Chicago, it’s setting its sites on the remaining urban markets that have so far resisted the retailer. The Washington Post says an unnamed source has told them that Walmart is in final negotiations with a plot of land “on New York Avenue NE near the intersection of Bladensburg Road.” The area currently houses an auto parts shop and a strip club, among other businesses.
In New York City, if you have a store with more than 4,000 square feet of retail space, or if you own a chain of at least five stores in the city, you’re required by law to keep your cool air inside where it belongs. That means none of this leaving the door open so your cool air will “lure in overheated customers,” reports WNYC. A city councilwoman says she hopes to conduct surveys this week to catch any retailers skirting the law. An employee at French Connection in SoHo said that her store is concerned about the energy crisis, so they only open one door instead of two these days.
Have you worked retail? You might be amused by a new book called Hello Do You Work Here?, a collection of illustrated true stories about crazy-making customers.
Last month, a business improvement group in Ardmore, PA issued $15,000 in local currency, which citizens bought at half the face value and which can be spent like real money in stores and restaurants in the downtown area. Strangely, despite the 50% savings promised only $2,900 of it has been spent so far, with thrift stores receiving more than any other type of business. The group is going to launch another money printing campaign in November to try to boost holiday sales, preferably of new things.
If you live in Iowa City, Iowa, you’ll soon be able to do your laundry at Kmart. I don’t get it either, but that’s what the retailer has announced. It will be testing a laundromat addition to one of its Kmart stores in the city, and has named it Kwash. I’m assuming you’re supposed to pronounce it K-Wash, but for the first five minutes I kept reading “quash” and wondering how in the hell that was supposed to make me think of clean clothes and cheap goods.
Mail in rebates are a sneaky way to make things look cheaper than they actually are at the point of sale, since many consumers never actually get any cash back. Now New Jersey’s state Assembly is considering legislation that would require retailers to charge shoppers the after-rebate price on goods, instead of forcing them to mail in or submit online requests. If the retailer still wants to take advantage of the rebate, that’s no problem; he’ll just have to mail it in himself.
Behavioral researcher Paco Underhill has spent his career studying consumer behavior, and has documented it in best-sellers like “Why We Buy.” His real business, though, is advising corporate clients through his Envirosell consulting firm. And he has some very bad news for them. Retailers, he said in a recent interview, are clueless about such basic niceties as offering price-matching in their online and physical stores, and providing a seamless experience between the two shopping venues.
Whaaaaa? The Wall Street Journal says J.C. Penney and Home Depot have been investing in better customer service training, because apparently some egghead thinks it might increase sales. Penney started it back over the holiday shopping season, by giving cash bonuses to employees who improved their customer service scores. Home Depot should be rolling out some new improved customer interaction this month, where cashiers will ask if you found everything you needed and will call up the right department on your behalf if you didn’t.
Embassy Suites plans to launch a site next month that will let people buy sheets, comforters, pillows, coffee pots, and alarm clocks just like the ones in their hotel rooms, reports national hotel paper USA Today. A Hilton executive in charge of the Embassy brand says the company doesn’t plan to make much money off of it and that the items will be priced below retail, but I’m not sure that means you’ll find any bargains.
MasterCard has decided to expand into online retailing, so it’s opened a store that’s sort of Amazon lite. Well, Amazon several design iterations ago. Actually the site looks like one of those themed mini-stores eBay keeps promoting these days, but the merchandise is all new and tailored to your shopping patterns. And by “tailored,” I mean that the card issuer is using special customer behavior software to predict the things you’re most likely to buy, which it then shows to you.
Mass customization isn’t really that hard to pull off anymore, if a retailer is willing to invest the time building a good interface for customers. BusinessWeek has a slideshow of 10 retailers that let you customize the product before purchasing it. You can buy sneakers, purses, shirts, and even jewelry this way, or if you’re feeling really DIY you can go to a site like Ponoko or Shapeways and have product parts made to order.
Jessica Palmer at the blog Bioephemera recently had a bad run-in with a bookseller on Amazon, which she talks about at great length in a post. The mistake she made, she says, was that she didn’t exercise due diligence in researching the seller for complaints, and she didn’t read through all the many reviews on Amazon to see if the negative ones demonstrated a pattern. But her bigger issue is that there’s still no way to shame a bad retailer the way local news stations do with local brick and mortar stores, which is why it’s so important to stick by your complaints once you make them.
Have you been noticing more and more lately that no matter which online retailer you visit, you have to add the item to your shopping cart to see the price? Blame it on manufacturers, who are taking advantage of a 2007 Supreme Court ruling to be more aggressive about controlling pricing online, writes the New York Times.
Ideally, companies choose to lessen their environmental impact because it makes financial sense, not because it makes them feel good–which is a good thing, since companies don’t have feelings. Today, FastCompany published a slideshow that looks at 12 ways the mega-retailer is trying out various green initiatives. Some of them are more about selling the concept of green to consumers, which is dumb, but the ones that deal with shipping, energy consumption, and market creation are pretty impressive.
Macy’s wants in on the discount department store market, so starting this summer the company will open four outlet stores under the Bloomingdale’s brand in New Jersey, Florida, and Virginia, reports the Seattle Times. Apparently the real Bloomingdale’s sales haven’t been stellar in this economy, so Macy’s is hoping that a discount offshoot will bring in more budget-conscious shoppers.