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Verizon Wireless to install AmEx payment app on phones

BY Staff Writer

New York City — A Monday report by the Associated Press said that Verizon Wireless will install apps for American Express Co.’s new online payment service, Serve, on its phones and tablets.

Terms of the agreement between Verizon Wireless and American Express have not been revealed. Verizon’s Serve online payment service is based on pre-funded accounts, and it enables online transactions without entering a credit card number.

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How good is Amazon.com?

BY CSA STAFF

Buying online from Amazon.com is a fantastic experience. Between the broad assortment, product reviews, available shipping options, ease of checkout and simple returns process there is a lot to like. It’s why the company’s sales are on fire, profits are beating analysts’ estimates, and the stock has traded above $200 the past month.

The best part about buying from Amazon.com is customers can avoid paying sales tax. This obviously gives the online retailer a tremendous competitive advantage, however, as you might expect, Amazon.com, like most retailers, is inclined to attribute its success to hard work and disciplined execution of a brilliant strategy.

But seriously folks, the no sales tax thing is huge. Even with all of the things Amazon.com does right, the company would suddenly appear fallible if it were to begin collecting sales tax from customers. How big an impact would such a change have? Well, imagine for a minute the taxation shoe is on the other foot and such companies as Walmart, Target, Best Buy and Lowe’s suddenly stop collecting sales tax at their physical stores and Amazon.com begins collecting sales tax.

The physical retailers would see a dramatic surge in traffic and an increase in basket size, just as they do when tax-free holidays are offered during back-to-school season. It stands to reason then that if Amazon.com were to begin collecting taxes it would experience something of a backlash as consumers would see their net cost rise somewhere in the range of 6% to 9%. How big a backlash is unclear, but it is likely to have a material impact on sales results even if no one at the company wants to publicly admit it.

Just look at the situation with Target and the company’s ongoing promotion of a loyalty program that save shoppers 5%. The program and the incremental sales it generates is expected to add at least a full percentage point to same-store sales during the second half of the year, according to the company.

Americans love saving money and hate paying taxes and Amazon.com thrives in part because it presents people with a situation where they can do both. But the free ride is ending. States need the tax revenue and conventional retailers are howling about the need for a level playing field as they report weak sales while sales at Amazon.com surged 52% during the second quarter.

The sales tax question came up during Amazon.com’s second-quarter conference call, and CFO Thomas Szkutak reminded listeners that the company operates globally and already collects sales taxes or the equivalent on about half of its revenue, and growth rates haven’t exactly suffered. Szkutak went on to reiterate the company’s 10-year-old stance in favor of something called a “federal solution.”

It is impossible to know what Amazon.com’s numbers would like if it had been collecting sales tax for the past 20 years and consumers would have been presented with a higher net cost as a result, but it looks like we will eventually find out given the forces now working against online retailers and the consumers who exploit the sales tax loophole.

When that day arrives, Amazon.com and other online retailers are going to be in for a rude awakening as most, if not all, of the advantages they enjoyed in the earlier days of online retail are gone. In fact, online-only retailers are now at a competitive disadvantage because they lack a physical presence that would afford them the type of multichannel capability enjoyed by those who collect sales tax.

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REI invests in the great outdoors to the tune of $4.2M

BY CSA STAFF

SEATTLE — Recreational Equipment Inc. announced that it plans to give $4.2 million this year to nonprofits across the country that work to preserve and maintain natural spaces through active volunteer programs.

According to REI,the company designates 3% of the previous year’s operating profit to its annual grants program. Because REI employees have the most direct connection to local nonprofits, store employees nominate organizations from their local community. REI invites selected nominees to apply for grant funding. Eligible organizations must be outdoor nonprofits that promote active volunteerism through their programs, such as hands-on trail building or restoration events.

“At REI, we encourage our members and customers who enjoy the outdoors to play an active role in taking care of those places,” said Kevin Hagen, director of corporate social responsibility for REI. “We are honored to partner with hundreds of dedicated nonprofit organizations that share a similar mission and whose programs allow us to expand these efforts to trails, waterways and parks across the country.”

2011 applications were submitted throughout the spring and REI is currently notifying grant recipients in each of its communities, the company reported. In the coming months, members and customers can visit their local REI store, the REI Blog or their local REI Facebook or Twitter page to learn more about REI’s selected grant partners and how to get involved. Last year, the company granted $3.7 million to more than 320 nonprofits across the country. A full list of the REI’s 2010 grant recipients is available at REI.com.

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