The report, dubbed For love or money? 2013 consumer study into Australian loyalty programs found that loyalty marketing initiatives have wide-ranging effects on consumer behaviour, and although they can have a marked impact on spend, they don’t necessarily result in customer loyalty.

Commissioned by strategic marketing company Directivity in partnership with digital agency Citrus and conducted by First Point Research and Consulting, the report finds that loyalty programs are far-reaching, with 88 percent of consumers over the age 16 belong to at least one program.

Interestingly, the report also shows that while men are members of fewer programs than women (on average it’s a ratio of three to five), they’re more active with their memberships, with 49 percent presenting their card upon purchase compared to 41 percent of women.

Further Findings of the Research:

• Consumers most prefer financial rewards programs, with 80% rating discounts on purchase as ‘very important’.
• Points-based programs where members can redeem points for vouchers, products or other rewards were the second most popular benefit at 77%.
• Tiered rewards systems (e.g. Platinum vs. Gold memberships) were relatively less popular, with only 36% rating them as ‘very important’.
• Older Australians (55+) purchase more in general, but also buy from companies that have a loyalty program more than younger consumers. Conversely, they also more strongly believe that loyalty programs don’t offer any ‘real value’.

“Basic monetary rewards give retailers a ‘ticket to play’ in the loyalty game but the real opportunity lies in building deeper engagement with members through more personally relevant, unexpected and emotional rewards,” said Adam Posner, CEO of Directivity. “This plays out in the research, which shows surprise rewards such as a gift on your birthday, exclusive offers or special experiences go a long way to overcoming the belief that programs don’t offer any real value.”

Citrus CEO Peter Noble believes that retailers should be ensure they are crafting a loyalty program that offers true value for consumers, and this means tapping into consumer psychology and emotion.

“Ultimately financial rewards win the day for consumers and is the main motivation for joining loyalty programs. But a winning program is one that also has multiple emotional and unexpected benefits creating an element of ‘surprise and delight’ and tailoring offers based on consumer needs and preferences,” Noble said.

Australia’s top 10 loyalty programs

The most mentioned loyalty programs cited by respondents as ‘doing a particularly good job’:

1. Coles Flybuys
2. Woolworths Everyday Rewards
3. Qantas Frequent Flyer
4. MYERone
5. Priceline
6. Virgin Velocity
7. CBA credit card
8. IGA
9. Millers
10. Spotlight

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Many community-minded individuals will be well versed in charitable pursuits, however it’s not always that members of competing companies within the same industry get together and combine forces for the good of others. However, that’s exactly what the PeSA Charity Gala aims to do, according to organisers Chris Morley and Phil Leahy.

“Last year the event raised more than $89,000 for the Reach Foundation – a figure that was previously thought unachievable – however I know now that you simply can’t underestimate the power of a community coming together under the spirit of giving,” says Morley. “Helping to enrich the lives of underprivileged youths is a feeling I won’t forget anytime soon.”

The Dinner’s charitable aspect hinges around a silent raffle for small prizes, as well as the auctioning off of major prizes, which the organisers have indicated are well worth splurging on.

“So far we will be auctioning a day to spend with Gabby Leibovich and the Catch team, a dinner with Paul Greenberg and a NORA board member, as well as an eBay store subscription and design templates,” says Leahy.

However, the organisers are still looking for further prizes to be donated to the cause.

“We’re asking any brands that could use a little extra brand exposure to come forward with a unique product or service they might care to donate to the cause,” explains Leahy. “Any donations under $3,000 in value will be part of the evening’s silent raffle, with all proceeds going to the Reach Foundation.”

Ruslan Kogan, Gabby Leibovich and Paul Greenberg at the Charity Gala in 2012.

Even if you can’t afford to donate anything to the prize pool, the PeSA team is encouraging all members of the online retailing community to be a part of the night’s festivities by joining them and 300+ guests at the PeSA Gala Dinner.

“We’ve changed the format this year to ensure the night will be even better than past events,” says Leahy. “We’ll have a delicious, constant grazing selection, with ‘tastes of the world’ from over five different countries and even more great networking opportunities for everyone involved.”

When: 7pm, Thursday May 30.

Where: Gold Coast Exhibition and Convention Centre

For more details regarding how to donate, or even to attend the evening, please contact Phil Leahy at phil@ome.net.au.

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According to The Mirror, accounts show that Amazon’s UK arm handed over just £2.4 million in corporation tax, but received in excess of £2.5 million in taxpayer-funded government grants in 2012. The grants are reported to originate specifically from the Scottish Government to help fund a new distribution centre for the company.

Chairwoman for the government spending watchdog, the Public Accounts Committee’s Margaret Hodge described Amazon’s tax contribution as a “joke”.

“Its behaviour is not only unfair, it is anti-competitive – putting British ­businesses that do pay their proper tax at a disadvantage,” Hodge said.

Amazon has already faced a high level of scrutiny following its decision to transfer ownership of its British arm to the tax haven of Luxembourg, while reclassifying its UK subsidiary as being purely for “order fulfilment” and therefore avoiding certain taxes for supporting the 2,265 staff there.

The global firm has paid just £6 million in corporation taxes over the past 10 years.

Chief of the Taxpayer’s Alliance, Matthew Sinclair calls for significant tax reforms in light of the news.

“Tiny ­corporate tax bills for firms like Amazon at a time of huge ones for hard-pressed families will go down like a lead balloon, but only serious tax reform will fix our broken tax system.”

In response, British Prime Minister David Cameron has stated that the government was ready to take action against the tax havens that have thus far allowed companies to avoid taxes. Amazon, however, remains unfazed.

“Amazon pays all applicable taxes in every ­jurisdiction that it operates within,” a spokesperson for Amazon has said.

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• Disposable communication tablets. Basically these could be dropped in places such as Iran or North Korea and allow for communications no matter what the incumbent government tries to filter – think $1 devices.
• Milk, Coke cans and more in supermarkets with IP addresses and RFID. Why, well first as they can integrate this with smart appliances, but more importantly, merchandising and stock control. Who needs to do stock take when the store tells you what it contains.
• Light bulbs with web and IP addressing. Well actually these are already available.

There are many reasons why IP addressing will be used up quickly and these are but a few and more reasons why we will start to move towards distributed and hence cloud based systems. It is also one reason why we will move to IPv6. Mobility and security is another.

The catch-cry of the 21st century will be, Anytime, Anywhere.

Done correctly, IPv6 can make for extremely secure networks. It is already possible to make a secure mobile network. It is more difficult under IPv4 due to the constraints on the protocol. What we need to think of in this endeavour is how this will enable and change the business dealings that have driven the growth of the web.

One major component of this growth will be electronic transactions and commerce. In this article, we look at the foundations and basis of contractual dealings in a cloud based world.

The nature of online contracting

Technological developments and the advent of the internet have led to new paradigms in international as well as local commercial activity. These changes have reduced the certainty of contractual negotiations leaving a commonly held belief that the law of offer and acceptance does not readily apply to such transactions when conducted online^[1]. We have already created islands of clouds in our dealings and now these clouds are becoming finer. What was once a set of connected clouds and islands is fast becoming a nebulous web of connected systems.

The increased use of international commercial transactions using the internet is something no company can escape. In the past, international commercial transactions were generally restricted to negotiations between commercial entities. The internet has increased the scope of business to consumer dealings, and even consumer-to-consumer transactions across jurisdictional borders^[2]. For this reason, the formation of contract using the internet creates segregation into two initial categories. These categories include both those negotiations that occur strictly within a single jurisdiction, and next, those negotiations that involve multiple legal jurisdictions. Where the cloud is involved, security can be seen to encompass many localities and hence jurisdictions even when dealing within a single organisation.

Another concern for cloud based systems focuses on the relationship of parties. Many web-based transaction engines already act as third parties during the process of offer and acceptance. This interaction can complicate the formation of contract. Because of this, it is necessary to determine the legal standing of the third party^[3]. The third party could be a party to the contract, an agent or one of the two contracting parties, or may just be an ancillary facilitator or medium, across which, and through whom the contractual bargaining occurs^[4].

What is an “Electronic Contract”?

When contrasting contractual principles, it is clear that where a contract is not required to be in writing^[5], that little additional uncertainty could be created where the contract is completed electronically.  In fact, it is clear that electronic evidence must hold greater weight than verbal evidence^[6].  What is not clear is the extent of the weight attached to the various forms of electronic evidence.  The strength of a digital signature algorithm and the security surrounding the mechanisms used to sign an electronic document will respectively influence the weight associated with any piece of electronic evidence.

It has been argued that the digital contract may appear on the computer screen to consist of words in a written form but merely consist of a virtual representation^[7]. An electronic contract has a twofold structure. Thought of electronically, the contract is a sequence of numbers and code saved to some electronic or magnetic medium. Alternatively, the contract becomes perceptible through a transformation of the numeric code when broadcast to a computer output device such as a printer or screen^[8]. Establishing offer, acceptance and the terms of a contract remains the same whether the form is in writing, orally, or implied though the conduct of the parties in the same manner as existed prior to the rise of ecommerce over the internet.

Contractual formation is inherently uncertain in and of itself^[9]. Being that electronic contracts form a logical subset of the contractual superset and that there is uncertainty within contract formation in general; it must naturally follow that there are areas of uncertainty, which will remain in the formation of electronic contracts. The formation of contracts on the internet and with “cloud” providers will suffer from the nexus of jurisdictional issues. The question as to whether contracts performed electronically are legalistically equivalent to writing comes more to a question of evidential weight and the application of the parole evidence rule^[10].

A contract is not required to be in writing^[11]meaning that there is little additional uncertainty created when the contract is completed electronically.  In fact, it is clear that electronic evidence must hold greater weight than verbal evidence^[12].  What is not clear is the extent of the weight attached to the various forms of electronic evidence.  The strength of a digital signature algorithm and the security surrounding the mechanisms used to sign an electronic document will respectively influence the weight associated with any piece of electronic evidence. That stated, we still come back to the issue of jurisdiction and also in the case of intermediary agreements,

An electronic contract has a twofold structure. Thought of electronically, the contract is a sequence of numbers and code saved to some electronic or magnetic medium. Alternatively, the contract becomes perceptible through a transformation of the numeric code when broadcast to a computer output device such as a printer or screen^[13]. This dichotomy exasperated the uncertainty contiguous with whether an electronic contract can be regarded as being a contract in writing in the past, but has been settled in most western jurisdictions through a combination of legislation and judicial review..

At the most fundamental level, the existence of an offer and an acceptance is one of the primary requirements for the creation of a contract. The set of laws used to determine whether there has been a valid offer and an acceptance created across the internet or a mere invitation to treat have their lineage in the case law concerning postal and telex communications.

As an offeror may stipulate the method of acceptance^[14], it would be wise for parties to agree to the form of acceptance prior to the conclusion of the contractual negotiations.

A further important issue that surrounds internet contracting is the general rule of law that, for an acceptance of an offer, it must be “communicated” to the offeror^[15]. Under normal circumstances, the offeror must actually receive the acceptance before a contract will come into existence.

Amazon.com^[16] provides an example of this practice. Amazon has a page defining the terms and conditions associated with the site. Terms designed to protect the seller from entering into a unilateral offer consisting of an agreement that it did not intend to make link to the site for general download. This feature helps ensure that both parties understand the point at which the close of negotiations occurs and forms a binding contract.

Electronic agency issues

The inclusion of electronic agents makes the traditional requirement for a “meeting of minds” more difficult to prove. With many smaller vendors, hosting and creating their own e-commerce enabled web site requires the interaction of a third party. Often, this involves the use of an external service provider, which offloads the internet shopping trolley function. In this way, smaller vendors can create an e-commerce enabled site quickly and simply.

The issue, which arises in this instance, is in determining the contracting parties. Many small vendors provide little more than billboards style advertising through their web site. The complex task of maintaining the databases, transaction processing, and the shopping cart function becomes simplified when outsourced to another provider. In some instances, a redirection takes the customer to a completely new site or domain.

In such cases, it may be necessary to investigate whether a contractual arrangement has resulted between the client browsing a web site and the transaction agent or if indeed the transaction facilitator is a contractual agent for the Web store vendor^[17]. Agency has become a specialised area of contract law in itself. As such it will not be covered in any depth in this paper, though it is an area that does require due consideration and may influence the process of offer and acceptance.

What can now be done is to create logical islands in place of what was once a set of isolated systems. These isolated systems can allow us to treat pockets of cloud based systems as if they were physically isolated and not simply logically created pockets.

Conclusion

The formation of electronic contracts subsists as a subset of all contractual formation.  By their very nature and as it is expressed in a large number of contractual disputes which occur every year without dispute as to the content of the contract, contracts are uncertain.  Thus it must logically follow that there will always remain a level of uncertainty in electronic contract formation.  At best, if all uncertainty associated with the electronic nature of a contract was removed leaving no dispute between the natures of formation whether written, verbal or electronic; there remains room for uncertainty.

A number of offer and acceptance issues that had not been completely resolved remain. The question of online software downloads generates its own difficulties. For instance, does the downloading of software constitute acceptance, installing the software, etc? Many software vendor licenses for instance state that the “loading of the software onto a computer indicates your acceptance of the following terms…^[18]” The terms of the agreement are likely to be enforceable if the software company is able to demonstrate that the user had an opportunity to view the terms prior to installing the software.

Cloud based systems for ecommerce do not mitigate the issues of contractual formation and dispute. In the creation of a contract there is always the need to ensure that offer and acceptance have been fulfilled. This is an opportunity for business with the ability to log and store transactions on the cloud leaving less room for error and doubt than we have seen in verbal contracting. What needs to be remembered is that any computer system has flaws and these need to be patched and the system maintained. When run well, the underlying system is a sound basis for transacting in the online economy.

References:

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As we now know, both retailers are working together to offer an online competition that seeks to discover “the hottest shoe design in Australia”. The development represents another potential marketing hit for Shoes of Prey, who earlier this year announced the opening of its first brick and mortar pop-up location, appearing within David Jones’s flagship Sydney location.

The Iconic Co-Founder and Managing Director, Finn Haensel remarked that the competition seeks to tap into digital trends as well as fashionable ones.

“The Iconic and Shoes of Prey are both true pureplay online retailers,” he said. “With crowd-sourcing being a big digital trend, we want to combine this with fashion and fun – and maybe we discover a great design talent at the end”

Alongside Famous magazine, the retailers are inviting shoppers to visit a specific Shoes of Prey webpage to design their perfect shoe, enter it into the competition, before voting on their favourite submissions. Voting closes June 12, with the five most popular designs and five judge’s choices announced the following day.

The finalist shoes designs will finally be reviewed by a panel of judges that will include Shoes of Prey Co-Founder Jodie Fox and The Iconic’s Footwear Buyer Lisa Iule, with the overall winner announced on June 20. The winning shoe design will be manufactured and sold via The Iconic and will also be featured in Famous magazine, taking out the title of “Best.Shoe.Ever”.

“We’re thrilled to work with The Iconic and Famous on this online first,” said Shoes of Prey’s Jodie Fox. “The Shoes of Prey community adores competitions and shoppers on The Iconic know their way around a sexy shoe – so we’re sure they’ll love designing and voting for the BEST SHOE EVER.”

As far as interactive, new-age marketing initiatives go, this collaboration certainly appears to be on the money – particularly as it ticks all the boxes for the key demographic it is targeting. Not only should both brands see quite a large boost in visibility and potentially quite a few new customers, The Iconic may also end up with a popular new product to sell.

The Iconic and Shoes of Prey’s “exclusive collaboration” – Best Shoe Ever.

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Hellman’s Mayonnaise worked with the supermarket chain to implement the Near Field Communication (NFC) technology on shopping trolleys. It has been estimated the ‘Recipe Cart’ campaign resulted in mayonnaise sales increases close to 70 percent for the company. The touchscreen tablets offered up recipes if a customer placed a Hellman’s product in the trolley. The device used the customer’s exact location to offer relevant recipes and provide location information for the required ingredients. Social media sharing capabilities were also included to increase the interaction levels.

The supermarket sector continues to innovate in the omni-channel world. Locally, Woolworths launched its Tullamarine Airport click-and-collect service that allows customers to pick up their groceries when disembarking a flight. Coles has also been trailing tablets at its Southland store in Victoria.

Watch the below video to see the ‘Recipe Cart’ campaign in action.

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The retailer intends to replace its current systems, including MYOB Premiere, incumbent POS software and manual spreadsheets with NetSuite’s SuiteCommerce – and all-in-one cloud-based commerce platform. Hairhouse Warehouse hopes the technology will improve efficiency, productivity and visibility as it integrates with the general management of head office operations, its online channel and its footprint of 150 franchised stores Australia-wide.

Hairhouse Warehouse, which first opened in Melbourne in 1992, has also indicated that it plans this partnership to be the first step in a global expansion strategy to take place over the next 12-24 months. However, none of this would be possible based on the company’s current state of technological disarray, lamented Tim Lai, National ICT Manager for Hairhouse Warehouse.

“Right now our biggest problem is that we lack any visibility across our business – NetSuite can give us the tools we need to run our business as we want, to better analyse our data and expand our brand awareness,” Lai said. “All departments, franchisees and team members can benefit from NetSuite’s ease of use. We are not technology experts, so we need a system like NetSuite that doesn’t require extensive training.”

Hairhouse Warehouse launched its first e-commerce storefront in mid-2012 to provide customers with shopping flexibility and to support its franchisees. Unfortunately, the site has proven to be very unstable, despite the time and money invested. In switching to NetSuite SuiteCommerce, Hairhouse Warehouse plans to increase the stability and functionality of its site, while also making it a more integral part of the business.

“For many retailers, the complexity and cost of running a single transactional system that is optimised across all digital channels and integrated into internal business systems is overwhelming – this is where cloud computing really opens doors,” said Mark Troselj, Managing Director of NetSuite APAC. ”NetSuite’s integrated commerce solution can give Hairhouse Warehouse a powerful tool to gain a single view of its customers, franchisees, sales and revenue – giving back the control it needs to efficiently operate its business.”

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India’s online retail sector is looking at staff retrenchment as a means to bring gross margins out of the negative, with focus shifting from customer acquisition, which is estimated to use 70 percent of revenue.

“The period of land-grabbing is over. Now there is investor pressure to achieve efficiency and positive economics per transaction,” said Pearl Uppal, co-founder of early stage investment firm 5Ideas, in an interview with The Economic Times in India.

Reports indicate nearly 250 employees from Flipkart’s supply chain, logistics and call centre teams received their marching orders, representing approximately one-tenth of the workforce, with a similar number being laid off by Jabong, hitting harder with under 1,000 staff in total. Inkfruit, an apparel portal acquired by web retailer Zovi.com last year, has also had to follow a similar course of action with its employees.

“People are being let off every month,” said former Flipkart employee, who was retrenched last month.

In conflict to the revelations above, The Economic Times article also revealed that Jabong’s co-founder Praveen Sinha has admitted to only laying off 20 employees to date, and that both Jabong and Flipkart continue to hire. This is perhaps further indication of the turmoil within the sector at present.

Regardless of the actual numbers, the push to retrench has been nudged along due to pressure on Indian e-commerce firms to alter their business models to comply with regulations. As it currently stands, online ventures receiving foreign investment are prohibited from selling brands from multiple vendors direct to their customers.

To get around this, many retailers are making changes, adopting a marketplace model allowing them to aggregate multiple brands on their sites. This, however, has added to the push to reduce workforce numbers.

“A marketplace model requires fewer employees, leading to the current spate of lay-offs,” according to an industry executive.

Companies wanting to invest in the online retail sector in India are insisting that companies shift their focus to profitability.

“Companies cannot lose money in terms of high direct costs,” said Rahul Khanna, Managing Director of Canaan Partners, an investor for firms including Naaptol and Instacart.

It’s not all doom and gloom in the Indian e-commerce sector. Despite gross margins in the negative, the retail sector is showing signs of positive growth, with revenue estimated to reach Rs 10,000 crore from Rs 6,500 crore in 2013, according to the Internet and Mobile Association of India.

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Not only were many recently affected by whatever changes to Google’s Places occurred, websites that evidenced ‘spammy’ link profiles also appeared to be penalised. StewARTMedia‘s CEO, Jim Stewart, said the changes felt like a “local Penguin”.

Google itself had little to say on the issue, other than send through a rather bland statement regarding the nature of their updates program.

“We make over 500 improvements to search each year to make search results as relevant as possible for our users,” a Google spokesperson said.

Of course, that just led us to wonder, what other significant changes will these ‘improvements’ instigate? Luckily, Cutts has supplied some fairly comprehensive answers via this video:

In summary, Cutts essentially addresses concerns for SEOs and businesses hoping to gain visibility via search, most of which have serious implications for anyone practicing ‘black hat’ techniques. Here are a few that will be of most interest to online retail webmasters.

• Penguin Updates – The next generation of Penguin updates are expected to launch in the next few weeks (we may have seen a localised precursor here already), bringing greater penalties for websites that are trying to appear more authoritative than they truly are.
• Spammy Queries – Google may well be ramping up its focus on less-than-legitimate-looking search queries, thereby cutting out another way that webmasters are able to ‘game’ the search engine.
• Going ‘Upstream’ – The search giant wants to tackle the issue of link spam by going to the source. We can expect more link networks and black hat SEOs to be targeted and penalised directly. Any businesses that are still connected to link networks should quickly attempt to remove themselves.
• Improving Link Analysis – Cutts says Google is continuing to get better at analysing the quality and relevance of links, which it is developing new software specifically for. This should also have a marked effect on sites with spammy or irrelevant links.
• Hacked Sites – Previously, Google has been known to flag potentially hacked websites in search results, sometimes even removing them from search completely, before warning the site’s webmaster regarding the hack. These features are also in line for further upgrades, Cutts explains.
• Authority Boosts – Is your website very content-heavy? Do you receive lots of traffic that is attracted by your quality and breadth of content? Cutts says websites that demonstrate authority for a specific subject can look forward to a rankings boost. Time to ramp up your content marketing strategy!
• Softening Panda’s Blow – Many websites were hit hard by Google’s Panda update, but Cutts admits that some of these were borderline cases. Google is now improving its ability to soften the penalty for websites that may have been unfairly targeted by the raging Panda.

Have you seen anything strange happening to your rankings recently? Leave a comment or feel free to contact us directly.

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She replaces Nick Leeder, who announced his departure earlier this year and is now Country Director for Google France.

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