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The cost of online showrooming on in-store retailers

(BUSINESS NEWS) Bloomingdale’s workers want to earn commissions on showrooming – will other retail workers push for the same?

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Online shopping, in-store outrage

The advent and explosion of online shopping from singular novelty to daily routine has had multiple impact points on our daily lives.

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Ranging from new levels of price comparison before buying to the shuttering of many brick and mortar stores, online shopping has made quite the impact.

Online drama

However, the impact of online shopping is being felt in yet another place: the commission checks of employees in those brick and mortar stores who often help customers make decisions about purchases, only to see those same customers leave the store and buy the item online.

Employees of Bloomingdale’s flagship New York store have asked their union for help, as they feel that they should get commission on items that they steer customers towards, even if they’re purchased later.

As reported by Laura Northrup in The Consumerist, the Retail, Wholesale, and Department Store Union is unclear as to how the mechanics of how compensating these employees would work, but very clear that something needs to be done.

The act of looking at an item in person and then later buying it online is known in the trade as “showrooming.”

While union leaders know that there’s nothing that they can do for their members about customers who buy a product from a competitor’s website, they feel that Macy’s (who owns Bloomingdale’s) can create a way to track a purchase made on their website to the person who helped them in-store. Speaking to CNN, a union spokesman said, “I am sure the company can work on a tracking system. There’s technology for everything.”

Webrooming, too

And if “showrooming” wasn’t enough of a problem to deal with for the commission-based employees of Bloomingdale’s, there’s another issue that they face that occupies even more of their time.

Customers who “webroom.”

“Webrooming” is the opposite of “showrooming.” Customers make their purchases online and then pick them up at the store, or make them without assistance from employees, thus causing them not to earn commissions on the sale.

Bloomingdale’s employees say that “webrooming” actually takes more of their time, but doesn’t earn them anymore money.

Taryn Luna, reporting in The Boston Globe, identified that “webrooming” is more prevalent than perhaps thought. Surveys from Deloitte, a consulting firm, found that nearly 70 percent of all shoppers “webroom” before making a purchase, compared with less than 50 percent who engaged in “showrooming” before making a purchase. Amazon, somewhat unsurprisingly, is the top web space for people to “showroom,” but also is the top spot for research before buying in-store, as well.

Customers “webroom” for a variety of reasons: customer reviews, in-stock status, price matching, and tangibility of an item before making the final purchase, among others.

The development of more seamless experiences for customers between the online, mobile, and in-store experience also have affected customer behaviors, and many retailers are attempting to keep the attention of their potential customers, wherever those customers may be, to make the sale.
Which sometimes causes unintended headaches for the people making the sale to those customers, such as the case with Bloomingdale’s staff and their loss of commission based on these attempts.

They’re trying

“We are trying to reach a fair and reasonable agreement that represents our associates’ commitment to our customers,” a spokeswoman for the department store explained to CNN. “But we have to address the competitive business realities we face. And we have to be flexible about the way we take care of our customers.”

#Bloomingdale’s

Roger is a Staff Writer at The American Genius and holds two Master's degrees, one in Education Leadership and another in Leadership Studies. In his spare time away from researching leadership retention and communication styles, he loves to watch baseball, especially the Red Sox!

Business News

Asking the wrong questions can ruin your job opportunity

(BUSINESS NEWS) An HR expert discusses the best (and worst) questions she’s experienced during candidate interviews. it’s best to learn from others mistakes.

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When talking to hiring managers outside of an interview setting, I always find myself asking about their horror stories as they’re usually good for a laugh (and a crash course in what not to do in an interview). A good friend of mine has worked in HR for the last decade and has sat in on her fair share of interviews, so naturally I asked her what some of her most notable experiences were with candidates – the good and the bad, in her own words…

“Let’s see, I think the worst questions I’ve ever had are typically related to benefits or vacation as it demonstrates that their priorities are not focused on the actual job they will be performing. I’ve had candidates ask how much vacation time they’ll receive during an initial phone screen (as their only question!). I’ve also had them ask about benefits and make comparisons to me over the phone about how our benefits compare to their current employer.

I once had a candidate ask me about the age demographics of our office, which was very uncomfortable and inappropriate! They were trying to determine if the attorneys at our law firm were older than the ones they were currently supporting. It was quite strange!

I also once had a candidate ask me about the work environment, which was fine, but they then launched into a story about how they are in a terrible environment and are planning on suing their company. While I understand that candidates may have faced challenges in their previous roles or worked for companies that had toxic working environments, it is important that you do not disparage them.

In all honesty, the worst is when they do not have any questions at all. In my opinion, it shows that they are not really invested in the position or have not put enough thought into their decision to change jobs. Moving to a new company is not a decision that should be made lightly and it’s important for me as an employer to make sure I am hiring employees who are genuinely interesting in the work they will be doing.

The best questions that I’ve been asked typically demonstrate that they’re interested in the position and have a strong understanding of the work they would be doing if they were hired. My personal favorite question that I’ve been asked is if there are any hesitations or concerns that I may have based on the information they’ve provided that they can address on the spot. To me, this demonstrates that they care about the impression that they’ve made. I’ve asked this question in interviews and been able to clarify information that I did not properly explain when answering a question. It was really important to me that I was able to correct the misinformation as it may have stopped me from moving forward in the process!

Also, questions that demonstrate their knowledge base about the role in which they’re applying for is always a good sign. I particularly like when candidates reference items that I’ve touched on and weave them into a question.

A few other good questions:
• Asking about what it takes to succeed in the position
• Asking about what areas or issues may need to be addressed when first joining the company
• Asking about challenges that may be faced if you were to be hired
• Asking the employer what they enjoy most about the company
• I am also self-centered, so I always like when candidates ask about my background and how my current company compares to previous employers that I’ve worked for. Bonus points if they’ve actually looked me up on LinkedIn and reference specifics :)”

Think about the best and worst experiences you’ve had during an interview – and talk to others about the same topic – and see how that can help you with future interviews.

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Business News

AdvoCare MLM was painted as a pyramid scheme! Well color me surprised

(BUSINESS NEWS) AdvoCare is the most recent case of an MLM being called out as a pyramid scheme by FTC, but there’s plenty more MLMs where that came from…

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AdvoCare business structure

It’s always a good day when an MLM (multi-level marketing business) actually suffers legal repercussions. Granted, these days don’t happen nearly as often as we’d like – MLM CEOs have historically had deep pockets and a far reach – which means it’s all the more reason to celebrate when one gets called out.

Today’s culprit is AdvoCare, a Texas-based “wellness” company. AdvoCare has been fined $150 million by the FTC (Federal Trade Commission) for operating a pyramid scheme. The company, as well as a few of its top influencers, have been misleading people when it comes to how much money they could earn. This is pretty typical behavior for MLMs in general, though many are careful to couch your potential earnings in vague terms.

For the record, the majority of users lost money, and most who managed to turn a profit made a maximum of just $250. I say ‘just’ because it’s hard to know how long someone would have had to work to not only break even, but manage to turn a profit. MLMs make big claims about earning money, but when you have to pour a hefty sum of cash into the products, it can take a while just to break even.

That’s why many MLMs, including AdvoCare, push contributors to recruit, rather than sell the product. And if you’re thinking that sounds like a pyramid scheme, you’re totally right. This method of putting recruiting first is part of the reason AdvoCare has gotten in trouble with the FTC.

In response, AdvoCare is moving away from multi-level marketing sales and pivoting to selling products directly to retail stores, which in turn sell to customers.

Now, with AdvoCare’s downfall, don’t be surprised if other MLMs insist that they’re different because they haven’t gotten in trouble with the FTC. In fact, plenty of MLMs are quick to tell you that they’re totally legal and totally not a pyramid scheme. Sure, Jan.

First of all, if there’s a big focus on recruiting, that’s obviously a big red flag. There are plenty of pyramid scheme MLMs out there that just haven’t gotten caught yet. But there are other sneaky ways an MLM will try to rip you off. For instance, some companies will insist you buy tons of product to keep your place, and that product can be very hard to unload. Not to mention, many of the products MLMs tout are subpar at best.

AdvoCare getting called out by the FTC is a great start, but MLMs seem kind of like hydras. Cut down one and two more seem to spring up in its place. So be vigilant, y’all. Just because an MLM hasn’t gotten caught yet doesn’t guarantee it won’t still scam you out of your hard earned cash.

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Business News

Bose is closing their retail stores, but we haven’t heard the last of them

(BUSINESS NEWS) Over the last 30 years Bose has become so well understood by consumers that they don’t even need retail stores anymore. We hear them just fine.

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Over the next few months, Bose plans to close all of their retail stores in North America, Europe, Japan, and Australia. The company made the announcement last week. With 119 stores closing, presumably hundreds of Bose employees will be laid off, but the company has not revealed exact numbers.

However, this shouldn’t be taken as a sign that the maker of audio equipment is struggling to stay afloat. Rather, the move marks a major change in how consumers purchase tech gear.

When the Framingham, Massachusetts-based company opened its first U.S. retail store in 1993, it was making home entertainment systems for watching DVDs and listening to CDs. According to Colette Burke, Bose’s vice president of global sales, these first brick-and-mortar locations “gave people a way to experience, test, and talk to us” about Bose products. “At the time, it was a radical idea,” she says, “but we focused on what our customers needed and where they needed it – and we’re doing the same thing now.”

When a lot of this equipment was new, consumers may have had more questions and a need to see the products in action before purchasing. Nowadays, we all know what noise-canceling headphones are; we all know what a Bluetooth speaker is. We’re happy to read about the details online before adding products to our virtual shopping cart. The ability for Bose to close its retail stores is probably also an indicator that Bose has earned strong brand recognition and a reputation as a reliable maker of audio equipment.

In other words, consumers are less and less inclined to need to check out equipment in person before they buy it. For those who do, Bose products can still be purchased at stores like Best Buy, Target, and Apple. But overall, Bose can’t ignore the fact that their products “are increasingly purchased through e-commerce,” such as on Amazon or directly from their website.

In a statement, Bose also said that it has become a “larger multi-national company, with a localized mix of channels tailored for the country or region.” While Bose is shutting down its retail stores in several continents, it will continue to operate stores in China, the United Arab Emirates, India, Southeast Asia, and South Korea.

Burke said the decision to close so many retail stores was “difficult” because it “impacts some of our amazing store teams who make us proud every day.” Bose is offering “outplacement assistance and severance to employees that are being laid off.”

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