Guest Blog By Marty Gallant

In the consumer goods industry, securing premium retail placement is one of the primary concerns for distributors as well as manufacturers. Often, it is the only obstacle keeping companies from reaching the next level. With an economy at rest, the opportunities for optimum retail placement have shrunk, and competition has increased.

Vitamins are one of the more difficult consumer goods areas to navigate in the category of chain drug, mass market and grocery stores. Scores of large chain stores are swallowing up smaller chains and steadily rebranding them as spinoffs of their own brand. In the past few years alone, Walgreens has expanded its prominence as the largest chain drug retailer in the United States following its acquisitions of Happy Harry’s, Duane Reade and USA Drug.

Situations like this have presented challenges for many smaller consumer goods providers. Not only do they need to work toward securing shelf or retail placement, they also must strive to earn the confidence of these retailers to maximize the time their products are in stock. The question then becomes how you convince a retailer that your items deserve prominent placement and promotion in an overcrowded vitamin section.

Know your prospective retailer’s set. Before the appointment with the buyer, visit a number of stores in the chain that vary in size and location. Stores in the same chain can have different size sets, with different products making individual planograms. The locations of the sets can vary from store to store depending on the individual layouts.

In larger sets, bad placement can cause an item to get lost among a sea of other offerings. Low shelf placement in a small set can cause the item to get lost completely because they often are not as visible to shoppers.

Know your competition. Become well-versed in the category as a whole in addition to items similar to your own. Know the retail price points of your competition. Some questions to ask yourself include:

• Would your item be one of the higher priced items in the set?
• Would it be one of the lowest?
• Is there a private label brand similar to your products that the retailer already carries?

Small consumer goods providers involved with the vitamin category will find that some retailers choose to place more of an emphasis on the vitamin section in their chains, while others will sacrifice the shelf space for other categories in the health and beauty set.

Provide the buyer options. If you are not a vendor of record for the prospective retailer, then do not enter the meeting pitching only one item. Most retailers would prefer not to deal with a one stock-keeping unit (SKU) vendor. Instead, they are more likely to pursue pitches that include a line of items providing the opportunity to select what fits their sets and stores. The more options you provide, the better success you are likely to have.

For the reasons mentioned above, it is important for small consumer goods providers to not only pitch a retailer on the purchase of an item, but to provide legitimate reasons to award the item prominent shelf placement when the topic enters the conversation. As brand name chains absorb more and more of these smaller companies, the competition grows. Earning premiere placement and long-term contracts in retail accounts can make or break those in the vitamin category and beyond.

Marty Gallant is the president and CEO of Natural Product Solutions LLC, a natural products development and manufacturing company. For more information, please visit www.virmaxinfo.com and follow us on Twitter at @VirMaxDS.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by T. Markus Funk

In the morning hours of Aug. 22, law firms, boardrooms and compliance professionals around the globe were humming with anticipation (or perhaps more accurately, laboring under a chilly frisson of dread). The cause for this collective anxiety was the SEC’s much-anticipated – and much-delayed – announcement of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s final disclosure and reporting rules (the “rules”) concerning “conflict minerals” (generally tin, gold, tantalum or tungsten or any other minerals or their derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of Congo or adjoining countries). Would one man’s well-intentioned humanitarian effort once again become another’s costly export of moral imperatives for difficult-to-achieve public policy objectives?

What Happened?

The SEC approved the highly controversial Rules by a narrow 3-2 vote. The net result is that a considerable swath of corporate America, including many retailers, must now conduct “a reasonable inquiry” into the origins of those minerals and disclose any use of them on a new Exchange Act filing (“Form SD”).

Moving from the general to the specific, the rules apply to public companies using any (yes, even trace amounts of) conflict minerals, where the minerals are “necessary to the functionality or production” of an item the company (1) makes itself or (2) contracts a third party to make on its behalf.

Critically, the latter “contract to manufacture” provision applies to retailers and other corporations who have others manufacture products for the business, provided the corporation has “any influence” (a term that is left intentionally undefined and thus amendable to broad interpretation) over the manufacturing process. So if you, for example, are a retailer who directs a manufacturer to custom-make a certain product for you that contains some amounts of gold or tin, then there is a very good chance that you will fall under the rules’ considerable scope.

National Retail Federation Vice President Jonathan Gold noted in his post-announcement statement, “It’s very important that a distinction be made between a retailer who is acting as a manufacturer and has control over what is in a product and the vast majority who do not.” According to Gold, “While retailers abhor the violence in the Congo, compliance with these regulations could still be extremely difficult, and there is considerable debate on whether filing reports with the SEC will make any difference.”

The SEC estimates that the rules will affect as many as 6,000 listed companies both foreign and domestic. Private businesses, moreover, will be pulled into the rule’s orbit to the extent they supply SEC-registered companies. Companies must compile their data every calendar year, starting Jan. 1, 2013, and file their first Form SD by May 31, 2014 

What Now?

Retailers subject to the rules’ oversight and disclosure requirements who have not yet established a compliance and due diligence management frameworks should consider doing so. Although some of the rules’ mechanics lack definition, here are some basic steps retailers should consider taking:

Determine whether the rules may apply to you:

• Are you a Section 13(a) or 15(d) issuer?
• Do you, as part of your business, either (1) manufacture products or (2) contract with others to manufacture products for you while having “any influence” over these manufacturing activities?
• If the answer to the immediately foregoing is yes, are conflict minerals (generally tin, gold, tantalum or tungsten or any other minerals or their derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of Congo) “necessary” to the product’s “functionality” or production?

Create conflict minerals risk profiles based on:

• Preliminary lists of products potentially containing conflict minerals.
• Key supplier documents and agreements.
• Targeted interviews of personnel with supply chain oversight.
• Prioritized lists of potential problem areas and ways to address them.
• Assemble an internal conflict minerals compliance team with representatives from manufacturing, engineering, procurement, finance and legal.
• Build a work plan, timeline and compliance budget

Design and implement a practical supply chain compliance program, including a:

• Conflict minerals code of conduct setting forth expectations for employees and transaction partners (including suppliers).
• Compliance questionnaire for suppliers.
• Supplier compliance database.
• Risk management plan.
• Customized “country of origin” inquiry program.

Develop:

• A database of supplier personnel who should receive conflict minerals compliance materials.
• Develop questionnaires and certifications for suppliers and determine any additional supplier documentation, due diligence and compliance requirements.
• A risk-management plan covering procedures for suspending or terminating suppliers that violate procurement policies, and consider alternative sources for conflict minerals.
• An integrated method of addressing the conflict minerals rules, FCPA, California Transparency in Supply Chains Act, and other laws and regulations bearing on your supply chain due diligence and oversight obligations.

Train relevant employees and key suppliers regarding:

• Conflicts minerals rules and resources.
• Best practices for supply chain investigation and oversight.
• Cross-training for key suppliers with greatest risk exposure.
• Distribute an initial written communication to suppliers educating them on the Rules and your company’s compliance obligations.

For the text of the 356-page “Final Rules,” click here.

T. Markus Funk is a former federal prosecutor who previously worked for the State Department and a Perkins Coie partner who helped launch the firm’s Corporate Social Responsibility and Supply Chain Compliance Practice (the first such dedicated practice among the 100 largest law firms in the United States). He can be reached at MFunk@perkinscoie.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog By Michael Plummer

In today’s world, local businesses have more marketing tools at their fingertips than ever before. The explosion of online marketing concepts has made a big impact on the way consumers think about and react to campaigns. In fact, the emergence of social media gives consumers the power to influence and shape the brands they know. This has fundamentally changed the game because marketing is now as much, if not more, about controlling the message than shaping it.

However, there are still “push” marketing tools that can pay big dividends for local businesses, the most powerful of which is new mover direct marketing. Think about it – countless people move in and out of your hometown each year. Naturally, this means small businesses lose a percentage of their loyal customer base each year no matter how well they run their businesses – a potentially crippling problem for a small retail business.

The best way to replace those loyal customers is to reach and influence new movers with a targeted direct marketing program. Companies like Our Town America (www.ourtownamerica.com) specialize in those types of programs and are helping retail businesses around the country market to impressionable new movers who have yet to establish brand loyalties.

OK, yes, I hear you. “Why not daily deal sites?” “Why not direct mail companies that reach a larger group more often?” Here’s why:

• Daily Deal sites are certainly effective at getting people to come to the store, but they rarely spark long-term relationships. Many of the customers these deals attract are serial couponers who always looking for the bigger, better deal. They’re not buying your products or services – they’re buying the deal.
• Creating social media profiles and engaging with customers online is a great way to maintain and build customer relationships, but it takes a long time to make a sustainable impact through those tools. Additionally, executing social media campaigns successfully is a full-time job and a daily grind. It’s not easy and requires a professional to do it well, which can be expensive.
• Broader direct marketing campaigns are less effective than new-mover-specific campaigns as well, because most people who receive the package aren’t new to town. They’ve established their brand preferences and are comfortable with the local brands they already use.

Conversely, new-mover programs – like the welcoming packages delivered by Our Town America – are affordable, targeted and personalized. They allow local businesses to welcome new residents to town right when they’re trying to figure out who to turn to in their new community when they need pizza, groceries, etc.

Timing is everything, even in today’s world. The local retailers who do the best job of reaching new movers at the right time will be the ones who best compensate for the customers they lose each year. Why, you ask? Because, even in today’s world dominated by cell phones and the Internet, people still love to feel welcomed, loved and appreciated. No marketing tool is better suited to evoke those emotions than a warm, hand-delivered package.

Michael Plummer is CEO of Our Town America. For more information, visit www.ourtownamerica.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by Thomas Cohn

Last year, the California Supreme Court held that collecting a customer’s ZIP code during a credit card transaction violates the state’s Song-Beverly Credit Card Act (“Song-Beverly”). Thanks to this case (Pineda v. Williams-Sonoma Stores Inc.), California retailers have effectively been prohibited from requesting and recording customers’ ZIP codes during credit card transactions. Meanwhile, more than 100 consumer class-action lawsuits have been filed against California retailers.

In Pineda, the plaintiff alleged that Williams-Sonoma requested her ZIP code as part of a store credit card purchase and recorded it for marketing purposes. According to the act, a business cannot ask for personal identification information (PII) as a condition for a credit card transaction. The appellate court ruled for Williams-Sonoma, determining that ZIP codes are group identifiers rather than PII.

The California Supreme Court reversed, contending that a consumer’s ZIP code is protected under the act because it is definitively concerning the cardholder. Furthermore, the act was passed to prevent misuse of consumer information and later amended to “prevent retailers from ‘requesting’ personal identification information and then matching it with the consumer’s credit card number.”

Some of the recent class actions have considered questions left unanswered by Pineda, such as whether the act is violated by requesting a ZIP code if a business credit card is used (no), or when a personal credit card is used for a business transaction (yes). Most recently, a California federal court in May granted plaintiffs’ motion for class certification in an action against IKEA. This class action suit (Yeoman and Medellin v. Ikea U.S. West Inc.) alleges that IKEA violated Song-Beverly by requesting that cardholders provide their ZIP codes during credit card transactions, and then recording that information in an electronic database. The court found that the class definition was not overbroad and that IKEA’s practice of requesting ZIP codes showed common questions of law best resolved through a class action.

Song-Beverly is different from laws in other states because it forbids requesting, not just requiring, PII. One such law in New Jersey was tested last year in two cases. In Imbert v. Harmon Stores Inc., a Superior Court judge denied Harmon Stores’ motion to dismiss a ZIP code-collection class action. In addition to citing a statute that prohibits retailers from requiring PII, Imbert asserted that Harmon had violated a second statute that prohibits sellers from violating any “clearly established right” of a consumer.

At the same time, a federal judge dismissed a similar class action, Feder v. Williams-Sonoma Stores Inc., brought under the same two New Jersey laws. The court held that the plaintiff did not identify any provision of a “written consumer contract” violating state or federal law that would establish a claim under the second statute above. A ZIP code, the court argued, is not a contract provision violating a person’s rights.

In construing a similar state statute, a Massachusetts federal court recently came to much the same conclusion as California did in Pineda, but then dismissed the suit for lack of alleged injury. The court viewed the Massachusetts statute, which prohibits anyone from recording or requiring a credit card holder to write PII on the transaction form, as being primarily concerned with fraud-prevention and security, not privacy. But it still found that the retailer’s entry of the customer’s ZIP code (with name and credit card number) into an electronic terminal technically violated the Massachusetts statute, reasoning that a ZIP code was PII because it could be combined with other data to identify a particular person. The court dismissed the case (Tyler v. Michaels Stores Inc.) because the plaintiff failed to allege a cognizable injury like identity theft and, at most, complained of a deluge of unwanted mail.

Retailers trying to make sense of the ZIP code issue should note each case’s practical aspects. In California, merely requesting a ZIP code will violate the law, while in New Jersey and some other states, the law is only violated when the code is required to complete the transaction. In the Massachusetts case, the violation existed because the credit card information, name and ZIP code were combined in a single electronic file.

Retailers should separate such information and finish the transaction before asking for any personal information. Given regulators’ heightened interest in protecting consumers’ PII, merchants need to be fully aware of all relevant state laws and the legislative intent behind them.

Thomas Cohn is a partner in the New York City office of national law firm LeClairRyan and a former Federal Trade Commission regional director. He is a member of the firm’s retail industry team and can be contacted at Thomas.Cohn@leclairryan.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by David Seiden

Why do some online retailers collect sales tax and others don’t? Why do some online retailers collect sales tax in certain states and not in others? Why are some states requiring online retailers to collect sales tax despite not having a physical presence in the state? Over the last 10 years as online shopping has gone mainstream, the issue of when an online retailer is required to collect sales tax has grown increasingly murky.

In the “good old days,” sales tax collection on retail sales was straightforward. A consumer would go into his or her local store, buy merchandise and pay sales tax at the register. Today, many local retail stores have either gone out of business or been replaced by large national retailers. Consumers spend more time “shopping” on their computer than they do in stores. The result is a significant drain on state sales tax revenue, which – coupled with the downturn in the overall economy – has resulted in significant budget deficits in many states.

Most of these states realize that the only way to curb the drain on sales tax revenue is to aggressively enforce their existing tax laws and adopt new laws that would require online retailers to collect sales taxes regardless of whether the company has a physical presence in the state or not.

The central issue that transcends both the enforcement of existing sales tax laws and the adoption of new tax laws involves the concept of “nexus.” Nexus is typically defined as a seller’s minimum level of presence in a state before such state can require the seller to collect and remit sales tax. While the term “nexus” is not overly complicated to understand, how states apply the term has been vigorously debated in the courts and in Congress for many years.

In 1992, the U.S. Supreme Court (the “court”) ruled that before a state can require a seller to collect sales tax, the seller must have more than a “de minimis physical presence” in the state. Despite the court’s 1992 ruling, numerous state courts have held that a business with no physical presence in the state may, under certain circumstances, be liable for collecting sales tax on merchandise shipped into that state.

For example, in 2008 New York state adopted the so-called “Amazon tax,” which expanded the definition of what constitutes a vendor in New York. This new law, named after Internet retail giant Amazon.com, permits New York State to require certain out-of-state Internet retailers, with no physical presence in New York, to collect sales tax on shipments made into the state.

Since 2008, more than a dozen other states have adopted similar Amazon tax laws, with new states jumping onboard every day. Until either the court decides to hear a case involving the Amazon tax or until Congress decides to act on this issue, states will continue to impose nexus on out-of-state retailers aggressively.

During this time of sales tax uncertainty, online retailers should closely monitor their potential exposure in uncollected sales taxes and implement procedures that can help minimize future liabilities. For example, we recommend to our clients that if possible, they should file sales tax returns even if they show zero taxable sales. This way, the company starts the statute of limitations – the number of years a state can “go back” and access tax­ – which is generally three years in most states.

David Seiden is the partner-in-charge of Citrin Cooperman’s state and local tax practice. Citrin Cooperman is a full-service accounting and consulting firm.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by Ken Davidson

Almost every customer interaction in retail involves contact with confidential consumer information. From the McDonald’s drive-through window to financial transactions on Wall Street, keeping customer information private is a top priority. But protecting this information from misuse by hackers and criminals is not always easy. Last year, information leaks compromised more than 180 million records, according to research by Javelin Strategy and Research, Pleasanton, Calif.

When companies are making the decision to outsource customer care to a contact center, they must be able to trust that the selected partner will do everything possible to protect their customers’ information. Although most contact centers understand the importance of privacy, the amount of time and monetary investment put forth in implementing secure processes, procedures and policies can vary significantly.

When looking for a contact center partner that places a high priority on security, it is advisable to start with organizations who have achieved payment card industry data security standards (PCI DSS) Level 1 certification. PCI DSS Level 1 certification proves that a company has met the stringent objectives for security management, policies, procedures, network architecture, software design and other critical protective measures as set forth by the members of the payment card industry.

The next step is to look at a contact center’s agents, network infrastructure and office environments. Virtual contact centers – or organizations using home-based employees – actually have several significant security advantages in these areas due to their innovative use of technology.

High Quality Agents

Efforts to prevent fraudulent activity begin with thoroughly vetting every employee before they are hired, including background and criminal checks. Virtual or at-home contact centers have a distinct advantage in this area because agents are hired from a nationwide talent pool, rather than a limited geographical area allowing them to be highly selective. Also, the demographics of home-based agents – they frequently are slightly older with higher levels of education than agents at brick-and-mortar centers – have been shown to contribute to lower levels of fraud.

One of the most feared incidents for any information-intensive company is the theft of customers’ personal and account information by hackers. To prevent unauthorized access, a company’s network infrastructure should consider utilizing the industry’s best practices including, but not limited to:

• Back-to-back firewalls at the boundaries of the service provider and enterprise network infrastructures;
• Multi-factor authentications to ensure that network users are who they say they are; and
• Controlled authorization, including role-based access control, to give access only to resources required to perform job functions.

Office Environment

The third factor to consider when evaluating security is the processes in place at the office level. Whether it is a large physical center or a home office, the following procedures help protect information:

• Locking down a computer to prevent information from being copied, logged, transmitted or otherwise retained;
• Regularly installing system, security and anti-virus patches and updates;
• Verifying all operating systems, applications and security software are installed correctly and operating properly; and
• Masking personal data by having customers enter sensitive information directly via the telephone keypad.

In summary, retailers must select a contact center partner that places the utmost importance on protecting consumer information, including hiring the right agents, implementing the right processes and achieving PCI DSS Level 1 certification. Although nothing can absolutely protect against fraud, call centers that have made the investment and implemented appropriate measures provide an important additional layer of support to retailers serious about security.

Ken Davidson is the chief information security officer of Alpine Access Inc., which provides customer service and technical support to Fortune 1000 companies in the financial services, telecommunications, technology, healthcare, retail, travel and hospitality sectors. For more information, visit www.alpineaccess.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog By Carrie Shea

Shoppers are in control. Retailers face this reality daily. What shoppers decide to spend their hard-earned cash on and how they make those decisions ultimately determine how retail merchandisers and marketers operate. So how are shoppers adapting to the recovering economy — and what does that mean for retailers?

According to our biannual “The Why? Behind The Buy” report, in today’s sluggish economy, shoppers are still holding on to the budget-conscious behaviors they developed during the prolonged recession. Not just reserved for shoppers struggling to make ends meet, this trend is prevalent at both ends of the income scale. Despite otherwise divergent shopping behaviors, shoppers with annual incomes of less than $45,000 and shoppers with annual incomes of more than $100,000 are making purchase decisions based on similar factors, including price. In fact, 55 percent of shoppers bought more items on sale than last year, and 88 percent of shoppers have bought buy-one, get-one offers.

How does this price sensitivity manifest itself in day-to-day shopping behavior? Now more than ever before, shoppers are moving across store channels — from grocery to drug and discount — to find the best deals and value. At the same time, shoppers overall are making fewer shopping trips due to increased gas prices, thereby further driving competition among retailers. Adding even more complexity to the situation are rising commodity costs, which means retailers are realizing narrower profit margins while also facing intense pressure to discount prices in an effort to lure shoppers.

These price wars are unsustainable and also diminish the value of brands and products. Rather than competing on price alone, retailers should consider these best practices to generate true demand and capture their share of shopper dollars.

Get Creative with Promotions

When it comes to promotions, shoppers want customization and flexibility. For example, try offering discount programs that give shoppers the option to mix-and-match among items, or reward shoppers for buying multiple products that reinforce certain lifestyle choices. By getting creative with promotions and testing different programs, retailers can discover what resonates most with their shoppers and replicate those efforts to continue to drive sales.

Incorporate Digital

The influence of digital marketing continues to grow as shoppers strive to increase productivity. Retailers need to move quickly to stay ahead of the technology curve by integrating traditional marketing tactics – such as store circulators, shelf tags and point-of-sale displays – with digital, mobile and social media elements to enrich the pre-shopping and in-store shopping experience.

Help Solve the Meal-planning Dilemma

Shoppers are looking for meal solutions that are inexpensive, easy and provide options for different tastes and dietary requirements, even within the same family. Cater to these needs by grabbing the attention of shoppers with prominent in-store displays, because many shoppers are not pre-planning meals and need compelling messages to deviate from their usual purchases.

Despite the challenging economic climate, retailers can effectively capitalize on the shopping landscape by truly understanding and adapting to current and future shopper needs.

Carrie Shea is president of AMG Strategic Advisors, which is Acosta Sales and Marketing’s growth strategy consulting unit. “The Why? Behind the Buy” was produced with research from a random sample of 1,098 shoppers via Acosta’s proprietary ShopperF1rst™ online survey. To access the full report, visit www.acosta.com/why.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by Chip Averwater

A well-oiled, smoothly operating retail store is a beauty to behold. Its people are professional, they like what they do, their systems are efficient and reliable, the store is organized and everyone is happy with their transactions. People like doing business with them, and many do.

The keys to putting together such an organization aren’t secrets. Most retailers recognize them. Yet most of us struggle to get them right. Here are five of the “truths” of building a better retail organization:

1. A company is the people it hires.

Almost everything that happens in a store is through its employees – displays, selections, organization, sales and customer interactions. Good employees find ways to make the right things happen; poor employees find excuses to keep anything from happening. Our task isn’t finding people who will work for the wages – it’s finding people who will share our values and make the right things happen.

2. Employees want and need training, early and often.

A new hire is eager to learn and contribute; he just needs information. Give it to him quickly and he becomes a valuable team member, but if you make him wait, his enthusiasm and motivation will dwindle. Writing out operations and sales manuals makes them easily accessible. If you give them to new hires before they start on the job, they’ll learn them and thank you for the head-start. Ongoing training keeps skills sharp, updates information, reminds people of common goals and allows brainstorming for improvements.

3. Respect and recognition create commitment.

We don’t have to create motivation; our employees have it when they start. We just have to be careful not to kill it. Our responsibility is simply giving them the tools and information they need, then offering feedback and encouragement. Everyone wants to be recognized, respected and appreciated for what they do. Providing it costs us little and offers amazing dividends.

4. Only simple systems succeed.

We tend to overestimate the operating systems our people can remember and execute. Steps that seem obvious and simple to us as we design them are puzzles to those executing multiple systems on the diverse and busy frontline. When we see the same mistakes multiple times, the problem is probably not the people but the system. We have to design systems that are apparent to their users and easier to do correctly than incorrectly.

5. Everyone needs to see the scoreboard.

More important than what to do is why; it engenders a commitment that instructions alone cannot. When our people understand our goals and how we’re doing, they find ways to contribute. Progress and outcomes are easy to share as graphs and numerical comparisons. Financial statements are the ultimate feedback and are seldom as sensitive as we think.

We’re often pleasantly surprised at the many ways employees can help us reach goals they see and understand.

Chip Averwater is chairman of Amro Music Stores, Memphis, Tenn., and author of the book “Retail Truths: The Unconventional Wisdom of Retailing.” For more information, visit retailtruths.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest blog by Jeff Liesendahl

Just think, not that long ago, a security guard positioned at the front door and a video surveillance camera were all merchants needed to protect their businesses.

How times have changed. With the rapid expansion of e-commerce as a profitable and oftentimes preferable way for merchants and customers to transact business, security and fraud prevention are clearly no longer as simple as a guard manning the front door.

Increasingly, merchants are realizing that finding the right balance of protection that enables fulfillment of legitimate customer orders while also flagging fraudulent ones can be a difficult task. Although too little protection can open the door to fraudsters, too much can frustrate customers to such an extent that they take their business elsewhere. As a result, finding the right level of fraud prevention has become core to merchant security efforts.

Accertify recently commissioned a study of U.S. consumers to see how people perceive and react to online fraud. We found that 28 percent of the American consumers surveyed have encountered a fraud protection system that unnecessarily delayed or denied their transaction. These results confirm what we’ve seen more and more in our own business: merchants falling victim to the misconception that overly rigorous fraud solutions are best for their business.

As consumers told us in our study, less is more. Interestingly, while being inconvenienced by a delayed or denied transaction may seem to be a minor nuisance, it’s actually a huge customer service issue. According to our research, consumers are less willing to give merchants a second chance after an experience like this, and frequently will take their business elsewhere.

More than 35 percent who reported encountering a delayed or denied transaction said they would penalize the business responsible by moving or consider moving their business to a competitor, while 11 percent immediately fled for competitors.

To protect against fraud while avoiding customer dissatisfaction, fraud prevention should be considered on a case-by-case basis, because not every business is subject to the same risks. With that in mind, a customizable platform that can be adjusted easily based on a business’ various sales channels, product offerings and other industry-specific risks will not only reduce the resources necessary to manage in-house programs, but also increase the speed and efficiency of the review process.

As consumers continue to flock to online payment channels, it is becoming increasingly apparent that they value the security of online transactions. Therefore, it is more important today than ever for merchants to have an effective yet balanced fraud prevention solution in place.

Although no fraud prevention solution fits all sizes, it is critical for the customer experience that merchants implement a flexible, customizable platform tailored to their specific business needs.

Jeff Liesendahl is president of Accertify, an American Express company. For more information, visit www.accertify.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

By Rob Duncan

The Internet has made comparing prices before buying easy. Consumers love getting the best deals and are more price-conscious than ever before. Unfortunately, more comparison-shopping can mean lower profit margins and increased competition for many of today’s retailers.

Retailers must find new ways to operate faster and leaner. Every area of a retailer’s business is now under intense scrutiny, and divisions previously thought of as “expense” centers are being required to either generate revenue or be eliminated, including call center operations. To reduce cost without sacrificing service quality, many retailers are turning to home-based agents.

Whether it’s establishing an internal at-home workforce or partnering with a virtual at-home contact center service provider, home-based agents have been shown to save money through higher quality service, more efficient operations and higher revenues. Here’s how it works:

1.         Hiring From Anywhere. The virtual contact center employee model allows organizations to recruit and hire the best talent, wherever it may be located. This advantage is particularly appealing to retailers because it allows them to target professionals with specific relevant experience. For example, a retailer can hire agents who have purchased specific products online or shopped at certain locations.

2.         A Different Breed of Agent. With an average age of 40, more than 80 percent college-educated with 15 to 20 years of work and life experience, at-home workers tend to be more mature and empathetic. Connecting on a personal level with customers results in more efficient calls, higher first-call resolution rates and improved selling capabilities.

3.         Lowering Costs. Facility costs, furniture and fixtures, property taxes, utilities and physical security expenses can exceed $10 million annually for many large centers. Instead, modern technology and networks can be used to create a virtual call center environment. Using a secure desktop, phone and Internet connection, assigned agents are routed calls and have instant online access to all the necessary support resources.

4.         Staffing Agility. Unlike traditional brick-and-mortar environments, an at-home workforce is designed to meet the flexibility and scalability requirements of the retail industry. Whether it is ramping up for the holidays or handling variable call volumes, with home-based agents it is possible to adjust staffing levels in real-time to ensure calls are always answered quickly.

5.         Workforce Reliability. Dispersed at-home workforces and a flexible scheduling environment helps ensure that agents will be available to handle call volume fluctuations, preventing service interruptions in today’s highly competitive, 24/7 business environment. Flexing the workforce in real-time to handle call volume fluctuations helps keep service levels high, revenues up and costs down.

Businesses can lose up to 10 customers for every one that complains of poor service. By using highly qualified, home-based agents, customers will receive outstanding service, and retailers can maintain financial stability despite increased pricing pressures and competition.

Rob Duncan is COO of Alpine Access Inc., a contact center and customer relationship management outsourcer. For more information, visit the Alpine Access website at www.alpineaccess.com.