Negative online reviews have been a problem for retailers since they began selling items online. Bad ratings on third-party review sites such as Yelp and TripAdvisor along with Amazon and shopping sites can literally cost businesses thousands or millions of dollars in lost sales. In fact, 80 percent of online shoppers have changed a purchase decision based on a bad online review. That amounts to an alarming amount in lost sales and damaged reputations. Some retailers and hotels have taken matters into their own hands, suing the review sites over lost sales and damaged reputations. In one case, an owner whose hotel was listed at the top of TripAdvisor’s “Dirtiest Hotels in the U.S.”, sued TripAdvisor for $10 million.
How is it that Twitter has become one of the most valuable social-media tools for most retailers and one of the biggest and hardest-to-nail-down risks for them? That question cropped up again last Thursday (Sept. 5), when popular multi-account Twitter management tool HootSuite announced a partnership with Nexgate to finally provide what, in any other context, would be considered the absolute minimum tools necessary to keep an organization from regularly shooting itself in the corporate foot. The problem, in a nutshell, is that Twitter was never designed for this. Like so many other things on the Internet, it was intended as something relatively simple for ordinary users—in this case, an online replacement for mobile text messages. But the combination of potentially instant response and the fact that Twitter is free made it perfect for everything from customer service to group chats, at least in the eyes of budget-strapped corporate users. Could anyone have intentionally designed an Internet boobytrap more potentially devastating? Probably not.
In a move that will satisfy nobody, data broker Acxiom announced that, beginning Sept. 4, it has launched a new website, AboutTheData.com, where people can log in and see some of what the data broker knows about them. This is supposed to be a move toward greater transparency and openness, and toward that end is a good move, but ultimately it may result in data brokers having more information about consumers. What appears to be a service for consumers is, in fact, a service that benefits the data broker and its customers, writes Legal Columnist Mark Rasch—and it only indirectly helps out the consumer. What it definitely doesn't tell consumers is exactly where data about them comes from, and especially what it will be used for.
A scientific study several years ago indicated that the best way for people to lose weight was for them to have friends who were dieting. The impact of peer pressure on behavior has long been measured. Now, according to an article in CNN Money, a number of companies like Lenddo, Kreditech and Kabbage, are trying to bring this "peer pressure" mentality to the measurement of credit risk. It goes a long way towards answering the ultimate privacy question, "If I am not doing anything wrong, why should I care about privacy?" The new credit reporting companies use data analytics to measure a consumer's likelihood of default by measuring not only his or her personal factors, but also the factors of that person's contacts, friends and associates on social networking sites like Facebook, LinkedIn and Twitter. For retailers using those new-style credit reports, the new approaches might pass muster under the federal Fair Credit Reporting Act, writes Legal Columnist Mark Rasch. That doesn't answer the question of whether they actually say anything about how credit-worthy the customer really is.
Moving from an ownership society to an "as a service" society radically transforms the nature of the relationship between the consumer and the retailer. As consumers merely "rent" that which they used to own, the retailer has the ability—and the legal authority—to cut off the customers whenever the retailer changes his or her business model. Businesses create their own digital repossession rights, which leave consumers out in the cold, and it may take new deceptive trade practice laws to reverse this trend. Case in point: Legal Columnist Mark Rasch recently bought a replacement Amazon Kindle 3G, and paid an extra $50 for 3G Internet access, which Amazon touted as giving him the ability to access the Internet, and download books without requiring his own Wi-Fi connection. But when the Kindle keyboard 3G stopped working, he replaced it with a Kindle touch 3G—and when he tried to use the 3G Internet access, he was in for a shock.
In our ongoing looks at survey stats and why they often don't mean what you might think they mean, here's a fun one. A new report from comScore and Millennial Media has a chart that looked at "Influential factors when purchasing a product on a smartphone" and beyond the obvious findings (73 percent of all such purchases were influenced by price) was this non-intuitive gem: Personal recommendations (18 percent) were about one-half as influential as customer reviews from strangers (35 percent). Our initial reaction was that the word "personal" was meant in a social media sense, such as LinkedIn considering every connection of every one of your connection as part of your network—or friends of friends on Facebook or anyone who follows you on Twitter. But apparently this isn't the issue, as one spokesperson for the report said it was considered true "friends and family."
Automated Web responses to consumer comments are great time-savers, presuming the programming assumptions don't get too defensive. This is not to suggest that Domino's Pizza has reason to be...
Think you have complete control of the terms of service (TOS) of your website? As a retailer, you probably assume that you can dictate terms to customers, especially about any services you offer them besides selling them merchandise. And when photo-sharing website Instagram changed its terms of service in mid-January of this year, it probably didn't expect too many people to even notice. Those who did might be displeased with the changes, and might abandon the service or go to another one. But what Instagram should have expected, writes Legal Columnist Mark Rasch, was a class-action lawsuit. And just such a suit was filed on July 16 in California Superior Court in San Francisco.
Retailers have tried quite a few creative tactics to get shoppers to participate in the chain's social media efforts, but none have the clout to do what the Vatican just did when it was trying to...
An eBay court case poses a question that gets a lot more interesting the more you think about it: If an e-commerce site is used extensively by a large number of shoppers as their primary store, does it become subject to all of the laws that govern physical stores? The legal issue in this case involves a deaf seller who argued that accessibility laws required eBay and other e-tail sites to accommodate shoppers with vision and hearing difficulties. The argument for the shopper speaks to the intent of the original legislation—or, more precisely, the intent of the legislators who crafted that initial legislation. Did they not indeed intend that if shoppers must go to public stores to make purchases, those stores must allow in and support all shoppers equally? The counter is that the law understandably makes no reference to e-commerce and that if Congress wants to pass such a law, great, but until it does, courts must assume that a law means what it says and nothing more.