From the Simplr studios in San Francisco, this is your daily briefing.
Introduction
With your Retail E-Commerce Briefing for today, Monday, November 25th, I'm Vincent Phamvan.
Amazon has banned giving away free products in exchange for reviews, but because of Amazon’s size, algorithm, and unreliable enforcement of its rules, many sellers still get away with it.
First, here are some retail headlines.
GOAT Partners with Brooklyn Nets
The Brooklyn Nets and wholesale sneaker and luxury app, GOAT, have partnered for the season. GOAT will have a branded arena entryway at Barclays Center for players’ arrivals. The Nets and GOAT will also create pre-game content that highlights the app’s gear worn by the Nets and visiting players. The partnership is a result of the NBA loosening restrictions on marketing entryways, permitting licensing deals like the one between the Nets and GOAT. In a statement, the Chief Brand Officer of the GOAT group said, “GOAT is a community of individuals aspiring to be the greatest. The Nets organization and individual players embody this, making the partnership a natural fit for our brands.”
PayPal Acquires Honey
PayPal announced it has acquired discount shopping platform, Honey. The Honey platform helps people find coupons online and discounts while online shopping. According to the company, the service has about 17 million monthly users. In a statement, PayPal said they plan to embed Honey into its apps such as Venmo, which has more than 275 million users. The $4 billion dollar acquisition is another sign that PayPal plans to expand its e-commerce services. The deal is expected to close in the first quarter of 2020.
Nordstrom's Q3 Earnings Rise
Third-quarter results for many department stores have shown weak performance, but Nordstrom’s latest results show they may be keeping typical department store struggles at bay. Third-quarter net earnings rose to $126 million dollars from $67 million dollars a year ago. According to the company, digital sales rose 7 percent and represented 34 percent of the business. Though net sales fell 2 percent in the third quarter, Nordstrom’s strategy to control inventory and implement fewer markdowns has given it an above-average performance among department store peers.
Fake Reviews Go Largely Unchecked By Amazon
Amazon has been plagued by fake reviews, and one woman found a way to turn it into a side business. The woman, who didn’t want her identity disclosed, has spent over $15,000 dollars on Amazon this year on a variety of products. Though most of the products are cheaply made or a knockoff, she’s given each item a 5-star review. The companies then reimburse her for the products she purchased and reviewed.
Good reviews and a high-search ranking are critical to being successful on Amazon Marketplace. But, genuine customers who give good reviews can be hard to come by, so some sellers have resorted to cheating the system: sellers bribe customers into giving good reviews. Amazon has banned giving away free products in exchange for reviews, but because of Amazon’s size, algorithm, and unreliable enforcement of its rules, many sellers get away with it.
When Amazon was asked about how it polices inauthentic reviews, they gave a statement that said the site had prevented over 13 million attempts to post fake reviews and took action against more than 5 million sellers’ accounts. But consultants who work with Amazon’s third-party sellers say that they can continue to exploit blind spots in the system and with little to no consequence.
Closing
Thanks for listening to this latest episode of the Retail E-Commerce Briefing. Don’t forget to subscribe and leave us a review. See you tomorrow.