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SAP releases Bilt DIY app

BY Dan Berthiaume

Newtown Square, Penn. –- SAP has released the Bilt mobile app, which provides interactive, 3D, voice-guided assembly, repair and installation instructions in application for iOS and Android tablets. Bilt digitally enables consumers to find the product best fit for them and assemble it as quickly and easily as possible.

After downloading the free app, the user looks up the product for assembly and can instantly play the interactive tutorial to walk through it step-by-step at their desired pace. Bilt also allows consumers to capture and send product registration to the manufacturer, streamlining the warranty process, while retaining replacement part, repair and warranty information for the consumer all in one place.

Bilt enables manufacturers to update and make changes to instructions immediately. Comprehensive 3D assembly instructions are designed to reduce assembly errors, which leads to fewer returned products, as well as a reduction in customer service calls.

Bilt is available on Android and iOS tablet devices.

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Guest Commentary: Update on Price Advertising Litigation

BY CSA STAFF

By Lindsay Carlson, Adam Biegel and Kimyatta McClary, Alston & Bird LLP

Over the past 18 months, there has been a significant increase in litigation and enforcement activity concerning comparative price advertising in the retail industry. Companies can face substantial reputational and cost consequences if targeted, and should consider examining their price advertising models and prepare to defend these models.

Here is a brief summary of comparative price advertising regulation, and recent enforcement and litigation activity:

FTC: Section 5 of the Federal Trade Commission Act (FTC Act) prohibits unfair or deceptive activities, and focuses on activity that is likely to mislead or harm reasonable consumers.

In 1958, the FTC issued its Guides Against Deceptive Pricing, with an aim toward preventing untruthful or misleading price claims. By the 1990s, however, bipartisan consensus had developed to all but abandon federal enforcement actions against deceptive price advertising, absent bona fide fraudulent conduct, on the rationale that the costs to retailers were substantial but the harm to consumers was insignificant (and in fact might cause harm by hamstringing competition).

Individual states, however, have developed consumer protection laws largely based on or interpreted consistent with the language of the FTC Act and the FTC Guides. Most of the state laws generally prohibit “making false or misleading statements concerning the reasons for, existence of, or amounts of price reductions,” but do not include express requirements regarding comparative price advertising.

COMPLAINTS: Complaints regarding a retailer’s price advertising practices usually originate from one of two sources—competitors or consumers. Competitor complaints regarding national or regional advertising can lead to proceedings before the Council of Better Business Bureau’s (BBB) National Advertising Division. The BBB Code of Advertising is generally consistent with the FTC Act and the FTC Guides.

Consumer complaints typically lead to investigations by state attorneys general or private class action lawsuits. Regarding the latter, a May 2013 ruling in a putative class action against Kohl’s Corp. contributed to a surge in interest in this area.

Previous courts had found that absent an actual economic injury, plaintiffs did not have standing to sue.

In the Kohl’s case, however, the Ninth Circuit broadened the definition of economic injury under California law, holding that when a consumer purchases merchandise on the basis of false price information and alleges that he or she would not have made the purchase “but for” the misrepresentation, the consumer has standing to bring a class action because he has suffered an actual economic injury. Since the Kohl’s case, the plaintiffs’ bar has initiated and litigated several other notable class cases involving reference pricing, pricing disclaimers, and never-ending sales.

OUTLET RETAILERS: Most recently, consumer class action plaintiffs’ attorneys have focused their efforts on litigation against outlet retailers. Historically, manufacturers established outlet branches to sell irregular, damaged, or excess product at discount prices. But the products offered have changed, as shoppers have become increasingly price-sensitive, and interested in “affordable luxury” products bearing highly sought-after brand names at a fraction of their traditional retail prices. Manufacturers have responded to these trends by adjusting their production and pricing models, and sales at outlet and discount stores have skyrocketed.

In response, public officials have started to scrutinize outlet sales practices. On Jan. 30, 2014, four members of Congress sent a letter to the FTC in which they expressed concerns about an increase in merchandise of purportedly inferior quality and specially manufactured for sale in outlets, which they believe was never offered for sale in traditional retail stores. Shortly thereafter, the FTC issued a consumer information release in which it encouraged outlet shoppers to “make sure you’re satisfied with the price you’re paying for what you’re getting.” To date, the FTC has not taken any enforcement action.

Plaintiffs’ class action attorneys then picked up where the public officials left off, filing a series of lawsuits against outlet manufacturers and retailers, starting in late July 2014. These lawsuits allege that the outlets have violated a trio of California consumer protection laws by falsely representing outlet merchandise as being originally sold in traditional stores at higher prices, or being of the same quality as merchandise offered for sale in traditional retail outlets.

Plaintiffs will have several procedural and substantive hurdles to clear in their quest to prove liability. Due at least in part to the availability of removal procedures under the Class Action Fairness Act of 2005, most of the cases will likely be fought in federal courts, which have a reputation for higher pleading standards and standing requirements than most state courts. The cases that survive pleading challenges will rise and fall on the facts, such as the specifics of the labels on the merchandise, marketing and advertisements, and other consumer-facing communications.

Manufacturers and retailers that offer merchandise for sale and utilize price advertising as part of their marketing strategy, and particularly those that make use of outlet stores or regularly engage in discounting of their merchandise from standard retail prices, should take notice and be prepared to document – and if necessary, defend – their sales and advertising practices.

Lindsay Carlson is a partner in the Los Angeles office of Alston & Bird LLP ([email protected]). Adam Biegel is partner in the firm’s Atlanta office ([email protected]), andKimyatta McClary is a senior associate in Atlanta ([email protected]). Alston & Bird is a global law that specializes in intellectual property, complex litigation, corporate and tax.

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Tech Guest Viewpoint: How to Drive Grocery Sales in a Consumer World

BY CSA STAFF

By Kent Smith, Galleria RTS

Well-stocked shelves and falling sales is a dilemma faced by many retailers today. New technology advancements such as mobile discount apps are the latest threat to grocery retail sales. Many people simply complete their grocery shopping from the convenience of their own home.

Retailers are finding it hard enough to survive, let alone thrive with channel and segment blurring making it a consumer world. The message is simple: have what you want, when you want it and at the price you want to pay.

A Common Defense Practice

In an effort to compete and cut costs, a person’s regular grocer may suddenly no longer stock their favorite product–inconvenienced, they look online and find it elsewhere, cheaper. It arrives the next day, and in no time, the supplier emails additional suggestions that they purchase online as well. Suddenly, their twice weekly visit to the store seems less necessary, which means fewer impulse sales for the retailer as well.

By no surprise, the store fails to recognize the private protest. The retailer does not realize others are also experiencing the same problem. Before long their shelves are filling as fast as profits are falling. Pushy promotions and pinched prices ensure that the impact of comparative grocery shopping is far greater than could have been predicted, but cost cutting is not a cure.

Many retailers don’t realize exactly how different their stores perform. Diversity in people, technology, competition and other factors has grown massively and is forecasted to continue. This is due to the growing population, changes in income, lifestyle differences and other factors beyond existing tracking methods. To get a sense of how diverse a chain really is, retailers can quickly compare the selling mix and fixtures in a handful of stores.

Traditionally, retailers have found it easier to take on a one-size-fits-all approach to their merchandising strategy. However, shoppers today seek solutions that fit their needs; variety in every sense is immense across the store network. Different store, consumer and market conditions combine to produce product demand, sales volume and mix that vary greatly. This standard solution saddles stores with inventory they don’t need in the form of products that don’t perform, meanwhile missing items that would move well. Group strategy can only go so far. It is not a solution for a store-specific system.

How to Win Customers Back

For retailers to win, they need to be more aware of their customers as individuals: who they are and what they want. The age old saying “knowledge is power” has never been truer. Suddenly, the impossible seems entirely imaginable as retailers gain the ability to go beyond basic intuition in order to make informed decisions about their customers shopping habits. It’s imperative to remember that these insights are the proof, as they say, in the pudding. In this case, the proof lies in the ability to seamlessly integrate these insights with current business processes while enhancing efficiencies moving forward. This helps to minimize capital expenses, reduce operational cost and raise profitability.

Historically, many retailers have found transitioning to a store-specific strategy to be complicated. Many solutions simply did not measure up and some retailers made the attempt manually, only to generate mediocre results after a massive effort. Today, the stigma still looms. However, new generation retail and category optimization solutions are now available. They are quick and easy to deploy and significantly impact a retailer’s bottom line. Using these new tools, retailers have achieved merchandise plan compliance of more than 95 percent. Retailers that produce generic plans typically have compliance levels of only 40-50 percent.

Category management must be handled with caution and careful consideration must be given when selecting a suitable solution partner. Ensure the technology provider can accommodate individual business requirements and has the ability to remain agile while retaining the determination to deliver. It is important to remember that customer centricity is a journey; it may not be achievable today, but with the right help it should be manageable tomorrow.

Kent Smith is VP of Business Development & Consulting for Galleria RTS.

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