Ever try to get tickets to a concert or sporting event, but find them to be sold out mere minutes after they go on sale, only to be immediately listed on scalpers’ websites for many times more than face value? Well, the same is happening to consumers this season when it comes to hot gift items, especially toys.
Shopping bots are out there combing the internet, buying up toys at a face value and listing them for inflated prices. Some items, such as Fingerlings, which sell for roughly $14.99 are hard to find except at outrageously inflated prices as much as $1,000 according to Sen. Charles Schumer, who is asking the retailer industry and its largest trade associations to help stop bots.
Schumer on Tuesday asked the National Retail Federation and the National Retail Leaders Association to help stop bots in their tracks. Schumer and Chuck Bell, programs director of Consumers Union, part of Consumer Reports, penned a letter to the groups in the hopes that retailers themselves will help stop the practice now driven by the rise of the online retail marketplace.
Alibaba, Amazon and Walmart host other retailers, brands and individual sellers of all stripes on their websites in these growing online marketplaces. It’s one way for retailers to expand their product inventory – Walmart brags its product assortment has grown by tens of millions of SKUs, and the marketplace has gotten Amazon a long way toward its goal of becoming “the everything store.”
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Marketplaces benefit smaller brands and retailers by hosting their online storefront, processing transactions and in some cases, handling fulfillment.
But they aren’t as big a benefit to consumers as one might think, and now Sen. Schumer is making this public.
Bots can outmaneuver consumers in numerous ways, as explained by Consumer Reports:
While consumers must choose their size, shipping, and payment details manually, bots can automatically fill out these pages in fractions of a second, allowing them to purchase items in demand much more easily. As a result, regular consumers simply cannot compete with the speed of bots, forcing many to purchase these popular items on secondary resale sites at prices far above the original retail price.
Schumer’s office searched online for some of the year’s top toys including WowWee Fingerlings, Super Nintendo entertainment system NES Classic Edition, the L.O.L. Surprise! Doll and the Barbie Hello Dreamhouse Playset. They found:
Fingerlings, which typically sell for $14.99, were out of stock online at Toys R Us, Walmart, and Target. However, the item was available for sale on Amazon and eBay for as much as $1,000 each.
Super Nintendo entertainment system NES Classic Edition, which sells for $79.99, was out of stock online at BestBuy, Game Stop, and Target. However, the item was available on Amazon and eBay for as much as $13,000.
L.O.L. Surprise! Doll, which sells for $9.99, was out of stock online at Toys R us, Target and Walmart. However, the item was available on Amazon and eBay for as much as $500.
Barbie Hello Dreamhouse, which sells for $300, was out of stock online at Toys R Us. However, the item was available for sale on Amazon and eBay for as much as $1,500.
Will retailers step in? Marketplace operators have legal rights and there are contracts in place governing how sellers can behave. But they are also the Wild West of retail right now, allowing for price irregularities that traditional retail would never allow in stores.
Retailers are counting on marketplaces to drive online sales growth, an incredibly important metric today. Schumer et al are right to call attention to it, and consumer advocacy groups should be sounding the alarm. While scarcity increases worth, this situation is almost entirely created, and executed, by bots.
Date: Dec 05, 2017