ECOMMERCE

Amazon price changes less ‘dynamic’ Thanksgiving weekend

BY Deena M. Amato-McCoy

Amazon knows Thanksgiving weekend shoppers are typically bargain hunters, yet the company became increasingly less price dynamic as the weekend wore on.

That’s according to an infographic from 360pi, which examined the promotional and pricing strategies of Amazon, Walmart and Target, among others, during Thanksgiving, Black Friday and Cyber Monday.

When comparing pricing behavior across more than 23,000 electronics products, Amazon, Walmart and Target all became progressively less price dynamic over the course of Thanksgiving weekend. However, when looking at the home good category, Amazon was less price dynamic on this category compared to Black Friday 2015, data showed.

When analyzing pricing on 400 small appliances, Bed Bath & Beyond narrowed their pricing gap with Amazon from 43% on Nov. 22 to 21% on Nov. 28 (Cyber Monday). Meanwhile, Macy’s and Bed Bath & Beyond were lockstep in their price changes from Nov. 20 to Nov. 28 (Cyber Monday).

The infographic is part of the pricing technology provider’s annual “Holiday Insight Series,” which delivers subscribers weekly holiday product and pricing trends across several major retailers.

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SECURITY/RISK

Study: Critical security issues plague holiday retailers

BY Deena M. Amato-McCoy

Retailers are doing a good job online when it comes to sales, but they are failing when it comes protecting sensitive shopper data.

All of the nation’s largest retailers had multiple issues with domain security, which increases the risk of hackers impersonating a retailer's site and falsifying a checkout form to obtain a user's credit card information, according to a report by security rating firm SecurityScoreboard that exposes cybersecurity vulnerabilities across 48 of the biggest U.S holiday retailers.

The study, “2016 Biggest Holiday Retailers Cybersecurity Report,” finds that more than 50% of the largest retailers may have failed to meet the Payment Card Industry's Data Security Standards (PCI DSS). Issues discovered include malware infections, use of end-of-life products, weak network security and low security awareness among employees — all areas that give hackers more opportunities to infiltrate retailer networks.

Meanwhile, 90% have missing sender policy framework (SPF) records — details that identify which mail servers are permitted to send email on behalf of a brand’s domain. Missing records increase the risk of an email spoofing attack reaching consumers, the report said.

Nearly 80% of retailers may not be using intrusion detection or prevention systems to monitor all traffic within the cardholder data environment, and as of October 2016, 83% of retailers had unpatched vulnerabilities.

When looking at the bottom-performing retailers in this group, these brands earned a “D” grade, or lower in their network security efforts, suggesting that their network may have an unaccounted access point ready to be exploited. One reason could be that 62% of retailers were using end-of-life products in the last month, making them more susceptible to attacks or exploits. This could be why 43% of companies were infected with malware between April and June 2016, data showed.

“This time of year is always tough for security professionals. With more consumers, more transactional data, and more credit cards to steal, the holiday shopping season is an ideal time for a hacker to attack," said Sam Kassoumeh, co-founder and COO of SecurityScorecard.

"Our analysis indicates that even the most secure retailers could be susceptible to a breach. Additionally, previously installed and dormant malware could be activated during this time of year to capitalize on a larger score,” he added. “If a hacker decides to take action while organizations scramble to keep up with an uptick in sales activity, attacks are more likely to be successful.”

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FINANCE

Destination Maternity disappoints in Q3 amid ongoing changes

BY Marianne Wilson

The nation’s largest maternity clothing retailer failed to meet sales and earnings expectations in the third quarter amid changes designed to focus on its core operations.

Destination Maternity reported a net loss of $1.5 million in its fiscal third quarter.

On a per-share basis, the company said it had a loss of 11 cents. Losses, adjusted for non-recurring costs, were 9 cents per share.

The retailer posted revenue of $102.6 million in the period, compared with $119.5 million for the prior year quarter. Same-store sales fell 5.2%.

The decrease was primarily driven by closure of leased departments in Sears and Gordmans stores, as well as reductions in Kohl's sales given the brand’s planned exit in 2017.

Destination Maternity ended its leased department relationship with Gordmans in first quarter 2016, and the company also discontinued its Two Hearts Maternity by Destination Maternity line, ending its relationship with Sears in June 2016.

Additionally, the retailer began to phase out production of its Oh Baby by Motherhood line during fiscal 2016 after being informed that Kohl's has decided to scale back, and ultimately discontinue, its exclusive license with the company for this line in early fiscal 2017.

These actions will allow the company to direct resources to the highest return opportunities and further optimize its footprint while reducing costs.

"While we continue to make progress on many of our initiatives, the third quarter was challenging as both our sales and earnings did not meet our expectations,” said Anthony M. Romano, CEO and president. “Our third quarter results do reflect continued improvement in gross profit margin and reduction in SG&A driven by the ongoing traction of our strategic initiatives. Overall, sales and adjusted EBITDA trailed the year ago period reflecting reductions in leased department and licensed brand sales and were adversely impacted by sales disruption from both the Hanjin shipping bankruptcy and Hurricane Matthew.”

Romano noted that the chain has improved its product assortment, elevated visual imagery both in stores and online, and now has a more disciplined inventory management, faster lead times and better product flow.

“While these improvements are not entirely visible in our latest quarter results, year-to-date earnings are improved and I remain confident that we are working on the right areas and are focused on the right strategic growth and efficiency initiatives to place us on the right path to deliver sustained long-term success,” he said.

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