Retail Death Spiral Continues
Stores like Walmart and Target have been fighting the likes of newcomers such as Amazon for years. This battle has been almost completely one sided as big box retail stores continue fighting for customers, we see online options such as Amazon signing up millions of new members every month. This surely dumbfounds the bean counters at stores like Sears and Walmart because Amazon charges a membership fee for access to their “Amazon Prime” program. Regardless of the competition online, big box stores will be tightening control over the one thing they had over on stores like Amazon. Immediate returns. Well, returns at all actually.
Walmart has been slowly tightening their grip on returns without a receipt for years. It seems that big box stores have a new option in tracking returns even when a receipt was kept.
The Retail Equation (TRE), based in Irvine California, works with big box retailers to record and rate customer return activity. TRE’s service is allegedly in use in over 34,000 stores right now.
The Retail Equation statistics show stores losing between $10.8 and $17.6 billion each year in the United States due to fraudulent activity by customers.
While that is a staggering number, it is also interesting to note that in many cases, The Retail Equation has been given control over allowing a return or not by a customer.
“We are hired by the retailers to review the returns, look for suspicious situations and issue approvals, warnings or denials,” Tom Rittman, an Appriss marketing vice president, was quoted as saying. “You could do things that are inside the posted rules, but if you are violating the intent of the rules, like every item you’re purchasing you’re using and then returning, then at a certain point in time you become not a profitable customer for that retailer.”
This process is allegedly handled via ratings that TRE gives customers based on their purchase and return activity.
If you feel that you have been wrongly targeted by The Retail Equation algorithms you can obtain a copy of your activity report.
The process of returning an item, with or without a receipt, is pretty simple. Taking the item to the store, usually the Customer Service desk, and giving it to the employee to scan the barcode. If you have the receipt then it is sometimes more streamlined, though if that retailer is using the TRE system it could be just as complicated as without a receipt.
Once the item and or receipt are scanned, the TRE system tells the employee to either accept the return or warn you that you are close to, or have surpassed, the threshold of returns that retailer allows during a certain period of time.
If you are denied a return by a retailer that uses The Retailer Equation systems then contact the company at [email protected] and file a dispute.
Frankly, this is the last bastion of hope that brick and mortar stores had over online retailers. Simple, immediate, returns.
I understand chain returns and fraudulent activity is a concern but making it harder for the normal person to return an item is not going to help keep that person from simply going online and buying it.
When we go to a big box store we are giving up the one thing that online shopping offers to save us. Time. Complicating returns will simply force former customers to online options such as Amazon and eBay.
Source: Clark.com
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I just don’t see how the big box retailers can compete with online sales. How can you compete with online sales when you have all the overhead from leasing out all the retail space, and paying all the people you need for customer service?
I grew up with the mall as being the trendy place to hang out. My son won’t have that when he gets into his teen years the way I did.
Online is taking over in many regards, not just retail. When is the last time you rented a movie? When is the last time you visited an arcade?
Shoot, when is the last time you went to a theater to enjoy a movie?
Online is taking over and big box stores, and other facets of retail, are going away unless they can figure out how to co-exist.
My question is, why are big box retailers not working with Amazon and eBay? Both offer affiliate links, both offer some form of partnership program. Why not work with the online stores if you can?
Best Buy is the worst for window shopping customers. Their prices are often quite a bit higher than nearby big box retailers, so much so that I will check prices at other local stores before paying at Best Buy.
Why not work something out with Amazon or ebay where if customers are in their stores, either verified through Wi-Fi use or geo location services, and get a cut of the sales from that customer over the next few weeks or whatever.
Websites do this all the time. Someone clicks an affiliate link I may make available for Amazon or eBay and for the next month, I believe, I get a cut of any purchases they make (not just purchases of the items in the direct link).
Why can't big box stores go this route as well? Some money is better than no sales.
I still go see movies on a fairly regular basis. The only reason I don't go to arcades is because there aren't any around. I think big box retailers will have to adapt but they will survive as long as they can provide instant gratification (or supply an immediately needed item) and Amazon can't. While Amazon is usually cheaper than places like Best Buy, it isn't always the case and sometimes even when it is cheaper it isn't by enough to matter. It just depends on what you are looking for and when.
I would probably still rent movies on occasion if Blockbuster was still around. Those Red Box locations seem to be doing ok though but they got rid of virtually all the overhead of movie rentals.
Best Buy has an official eBay store and some kind of partnership with Amazon to sell smart TVs (and maybe other stuff) so they are working with them to some degree. Not sure about Walmart and Target.
The theaters around me have a decent selection of arcade games in their lobbies (though you cannot access them without purchasing a movie ticket.
We have a Dave and Busters less than five minutes from my home but goodness, they are expensive (though they have new games like the Tomb Raider arcade machine).
Yeah, Red Box all but eliminated the overhead of video rentals. I know Blockbuster tried to do that years after Red Box but it failed horribly because they were only in Kroger stores around me (and there are not a lot of those).
Red Box did it right. They are at gas stations, Dollar Generals, Wal Marts, Target, random retailers, etc. They are everywhere and the whole "return the movie to any Red Box" is a plus that is hard to compete with, as Blockbuster found out.
That is interesting, I was not aware that Best Buy is working with Amazon and has an eBay store. I wonder how things are going for them with it? The whole instant gratification thing is big, especially with electronics - plus, it is a pain in the butt to return a big screen television that got damaged in shipping (and a major bummer).
I don't think Target is working with anyone. I know they have a staunch rule against resellers buying from them. They will flat out deny a purchase of a large quantity and will deny a return if they think you are a reseller (such as buying/returning 10+ of the same thing).
One of the theaters near me has a handful of arcade games but it isn't the theater I usually go to and like your you have to buy a movie ticket to get to it.
Blockbuster tried the "me too" thing with a Netflix like service also. Seems like they were always playing catch-up but never caught up.
I think there are at least three Red Box locations within a mile of my house. I don't use them that much because with Netflix and Amazon Prime I find I don't need to. I do miss Blockbuster (and to a lesser degree Hollywood Video) but I suppose its more of a nostalgia thing. My local Blockbuster was convenient though. Right down the road from my house on the way home... It's a furniture place now.
I don't think I would get something like a TV online. Of course I don't buy TVs that often. The last one I bought was my 1080p Toshiba back when the PS3 was new. The PS3 was my blu-ray player. The PS3 is dead but the TV is still going strong. I ran across Best Buy's eBay store while browsing for laptops. Seemed like there was a lot of older model and open box stuff but I didn't look into it too much.
I don't know how Target is doing financially but I know I prefer to go to Target vs. Wal-Mart. A more pleasant shopping (and parking) experience plus its closer to my house
Target is a solid number two in retail versus Walmart. They just can't quite catch up. Probably due to business models, and store availability.
I have 12 Walmart stores within 30 miles of my home. That is driving, not as the crow flies.
In that same area I have 4 Target locations. None of which are convenient to get to. Only one Wal-Mart is tough to get into regularly due to traffic. The rest are simple, quick and convenient for me.
That helps me as a reseller too.
I think some brick and mortars will be fairly safe, like clothing stores, dollar stores, grocers and anyone who sells heavy or bulky items.
I price checked cat litter at Amazon recently and it was near double what I pay locally.
A lot of that is due to th Amazon tax. The fees on Amazon selling are quite high. Believe me, I do it every day. Stuff that would sell on eBay for $5 has to list at $10+ on Amazon just to clear the same profit margin.
I just read somewhere that Jeff Bezos said that in the future the majority of people will be working for Amazon. I live near a distribution center that just opened up and starting wages are barely 75 pennies over min wage. Pretty sad since you'll be working for the richest man in the world.
The rich don't get rich by paying the highest salaries to the lowest workers.
Also, Amazon charges both buyers (Prime) and sellers (FBA or FBM) so they are making money both ways.
I think Jeff Bezos is overly optimistic. Something better is always just around the corner. It was almost literally just yesterday when it was Walmart taking over the world.
I remember a time when Walmart would take back anything, even without a receipt. Just as an example, when I was a kid I had a friend that got a BB gun from Walmart. He left it out int he rain and it got all rusty. He returned it and got a new one, no questions asked. Being THAT flexible is probably not in the best interest of the retailer.
Today, Target takes back things pretty easily. You have to proved ID and a receipt if I recall correctly but that doesn't necessarily seem unreasonable. Returning things purchased online is much more of a pain.
Yeah, Walmart used to be stupid gullible about it. I think that was back when they had competition.
My father knew a guy that bought a tool set from Walmart, used it for years, then saw a new tool set he wanted. He brought the nearly half a decade old tool set back to the store and demanded a refund based on the cost of the newer tool set. The manager caved and let him swap them out.
Stuff like that is ridiculous and is probably part of the reason that stores like Walmart are tightening up their returns policies.
You mentioned the core piece that big box stores have over online stores in your last sentence there. Online returns are a pain.
Making it harder to return items in store is only going to hurt big box stores, I think. I don't mean be lenient like they were in your, and my, story but still - making it tough to return something is only going to force customers to go online where they can probably get it cheaper anyhow.