Showing posts with label Consumer. Show all posts
Showing posts with label Consumer. Show all posts

Wednesday, 4 January 2012

Online Retailers Home In on a New Demographic: The Drunken Consumer

AppId is over the quota
AppId is over the quota

“I have my account linked to my phone, so it’s really easy,” said Tiffany Whitten, of Dayton, Ohio, whose most recent tipsy purchase made on her smartphone — a phone cover — arrived from Amazon much to her surprise. “I was drunk and I bought it, and I forgot about it, and it showed up in the mail, and I was really excited.”

Shopping under the influence has long benefited high-end specialty retailers — witness the wine-and-cheese parties that are a staple of galleries and boutiques. Now the popularity of Internet sales has opened alcohol-induced purchases to the masses, including people like Ms. Whitten, who works in shipping and receiving and spent just $5 on the cat-shaped phone cover.

Chris Tansey, an accountant in Australia, went shopping online after drinking late one night (to be precise, it was well into the morning). By the end of the session, he had bought a $10,000 motorcycle tour of New Zealand.

“The hang-ups of spending your hard-earned cash are so far removed from your life when you’ve had a bottle of wine,” Mr. Tansey said in an e-mail. The New Zealand trip was terrific, he said. But a pair of $3 sunglasses on eBay “turned out to be horrible fakes, with $17 of postage that I obviously didn’t see with beer goggles.”

Online retailers, of course, can never be sure whether customers are inebriated when they tap the “checkout” icon. One comparison-shopping site, Kelkoo, said almost half the people it surveyed in Britain, where it is based, had shopped online after drinking.

But while reliable data is hard to come by, retailers say they have their suspicions based on anecdotal evidence and traffic patterns on their Web sites — and some are adjusting their promotions accordingly.

“Post-bar, inhibitions can be impacted, and that can cause shopping, and hopefully healthy impulse buying,” said Andy Page, the president of Gilt Groupe, an online retailer that is adding more sales starting at 9 p.m. to respond to high traffic then — perhaps some of it by shoppers under the influence.

On eBay, the busiest time of day is from 6:30 to 10:30 in each time zone. Asked if drinking might be a factor, Steve Yankovich, vice president for mobile for eBay, said, “Absolutely.” He added: “I mean, if you think about what most people do when they get home from work in the evening, it’s decompression time. The consumer’s in a good mood.”

Nighttime shopping is growing over all. ChannelAdvisor, which runs e-commerce for hundreds of sites, says its order volumes peak about 8 p.m., and that shoppers are placing orders later and later: in 2011, the number of orders placed from 9 to midnight increased compared with previous years.

A recent array of nighttime offers sent to a shopper’s e-mail inbox included: from 6 to 9 p.m., a limited-quantity sale on fashions at Neiman Marcus; at 7:38 p.m., a promotion for three-day stays at Loews hotels; at 8:44 p.m., a promotion by Gilt for macaroons and faux-fur blankets; and at 2:23 a.m., an offer by Saks for a $2,000 gift card with purchase.

At QVC, the television shopping channel, traffic and viewers rise around noon, then quiet down until after 7 p.m. Then items like cosmetics and accessories sell briskly. “Call them girl treats — they seem to attract a really strong following once you get past dinnertime,” said Doug Rose, senior vice president for multichannel programming and marketing for the company. “You can probably come to your own conclusion as to what’s motivating her.”

Still, the nighttime spike requires delicacy among retailers: for reasons of propriety, they do not want to be seen as encouraging drunken shopping, and many people who inadvertently buy products in that state would most likely return them at high rates. On the other hand, a happy customer can lead to higher sales.


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Verizon Wireless Abandons $2 Fee After Consumer Outcry

AppId is over the quota
AppId is over the quota

The consumer vitriol, which cascaded across Twitter and onto blogs and petitions all around the Web, struck a chord with a company that was clearly not expecting it.

“The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions,” Verizon Wireless said in a statement referring to the reversal.

That a company with revenue of $15 billion in the most recent quarter would have to quickly change course over such a small fee suggests something particular about its business and others like it.

Similar to fee-bedeviled airline passengers with little choice on many nonstop flights, or bank customers who do not want to spend hours untangling automated payments so they can switch institutions, Verizon Wireless customers have limited options because they are locked into multiyear contracts. And they apparently did not like being told that it would cost money to pay money to the company.

The consumer outcry may also reflect the national mood — and some companies’ misreading of it, according to some analysts.

“I just think people are sick of being nickeled and dimed by big companies,” said Edgar Dworsky, founder of ConsumerWorld.org. “And it’s just baffling to me why a company like Verizon Wireless or Bank of America doesn’t do market testing on something like this first. It doesn’t take a genius to figure out that there is going to be a backlash.”

What was surprising about the Verizon Wireless rollback was how quickly it occurred. It took consumers about a month to persuade Bank of America to rescind its plan to charge a $5 monthly fee to people who used their debit card for purchases.

But with Verizon Wireless, the corporate change of heart took only a day, even though it is the week after Christmas when companies often drop bad news in the hope that fewer people are paying attention.

“The multiplication effect with things like Twitter is incredible,” said Ron Shevlin, senior analyst at the Aite Group in Boston. “And because of the national mood, it hits the boiling point really quickly.”

Verizon Wireless may also been have moved to change its mind when the Federal Communications Commission put out word earlier Friday that it thought the company’s actions merited closer scrutiny.

If the company had taken a different tack, it might have succeeded in convincing consumers that some kind of fee increase was necessary, Mr. Shevlin said.

“The easy thing would have been to be more explicit about what the costs were that were causing it to add this fee,” he said.

The company, for instance, might have explained how few people were going to pay the fee, which was supposed to be for one-time credit or debit card payments by phone or on the company’s Web site. It also could have explained how much higher the costs were, on a percentage basis, to accept payments in that way, versus regular, monthly credit card billing, which would have remained free.

Verizon Wireless declined a request for much of this information on Thursday and did not respond to follow-up requests on Friday.

Mr. Shevlin also said that Verizon Wireless, like Bank of America before it, said it was responding to customer feedback. But both companies seemed to have missed the opportunity to get accurate feedback before putting the fees in place.

“Why not post it on your Facebook page?” he said. “Maybe the feedback would have been just as bad, but then you’re seen as heroes for listening to feedback ahead of time. These firms are not reading the mood or living in the real world.”

Mr. Dworsky is on Verizon’s consumer advisory panel (and did not know about the fee ahead of time). But he said he chose to speak out about the move anyway, saying that he had a bigger concern about what the Wireless unit’s failed move portends.

“Who is going to try to tack on a fee next for using a credit card?” he said. “Is it the local grocery store? A department store? That is the bigger worry.”

Mr. Dworsky, a former assistant attorney general for consumer protection in Massachusetts, spent Friday morning reading credit card merchant agreements and various federal regulations in the hope that the proposed surcharge was actually against the rules.

“I’m glad this got killed in its infancy,” he said. “But I don’t think we’ve seen the end of it. Hopefully, the collective consumer voice will be able to change the next company’s planned fee.”


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