|
Retailers Responsible for Products Sold by Third-Party Sellers The Consumer Product Safety Commission (CPSC) voted unanimously to upheld a decision that could impact all retailers with an online marketplace. CPSC found that Amazon is responsible under federal safety law for hazardous products sold on their platforms by third-party sellers and shipped by Amazon. The CPSC determined that Amazon was actually a distributor of faulty items sold on their site and packed and shipped through Amazon fulfillment service. They found Amazon accountable for the recalls of more than 400,000 products and ordered Amazon to come up with a system for notifying customers who purchased faulty items and to remove the products from circulation by offering incentives for their return or destruction. Amazon said it planned to appeal the decision in court. Overall, Amazon accounts for roughly 40% of ecommerce sales in the US, according to the market research firm Emarketer. Amazon sells many items direct but also partners with nearly two million third-party sellers, who drive the majority of the sales on the platform. Amazon has been fighting the “distributor” label since 2021, when they were sued by the CPSC for allegedly distributing hazardous items. Amazon says when they were notified about the deficient product three years ago they quickly notified customers, told them to stop using the items and issued refunds. However, the CPSC said Amazon “did not take adequate steps to encourage” customers to return or destroy the products, leaving them at risk of injury. When Amazon notified customers, they said the faulty products had “potential” safety issues and provided customers with Amazon.com credits rather than refunds, according to the CPSC. Amazon has vowed to appeal in court. Why People Think We’re in a Recession Three in five Americans believe we’re in a recession despite ample data that shows the country’s economy is going strong, according to a new survey from Talker Research and Affirm. On average, the respondents have held this belief since March of 2023 and feel like they'll continue holding it until July of 2025. New York’s Goldman Sachs Group economists lowered the probability of a US recession in the next year to 20% from 25%, citing retail sales and jobless claims data. A recession is characterized by an economic slowdown and defined as two consecutive quarters of negative GDP growth. Recent numbers from the Department of Labor do show the unemployment rate is rising, but so are wages and job growth. As for inflation, consumer prices are falling but the overall rate of inflation is still above the Fed’s 2% goal. The majority of respondents (68%) said inflation and the rising cost of living were the top reasons why they believed the US is in a recession. Plus, 7 in 10 said the current inflation rate is hurting their financial plans for the future. Other factors driving respondents' economic beliefs were the financial complaints 50% said they hear from friends and family, 36% who think loved ones have reduced their spending and 20% who said they're unable to pay off credit card debt. Fed Jackson Hole Policy Summit Fed Chair Jerome H. Powell clearly signaled that the central bank was poised to cut interest rates in September during his most-watched address of the year at the annual policy summit in Jackson Hole, Wyoming. While Powell didn’t hint how big the coming rate cut might be, he did forcefully state that the central bank is prepared to move quickly and adjust policy to protect the job market from further weakening and keep the economy on a path for a Goldilocks soft landing. He reinforced that the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks. Powell did hint that central bankers are willing to cut interest rates quickly rather than gradually if the job market appears to be at risk in order to maintain a strong labor market. The unemployment rate jumped in July, and Fed officials will receive August jobs data on Sept. 6, just ahead of their next meeting. Mr. Powell was clear that central bankers are keenly focused on the possibility of a job market slowdown and stated that the upside risks to inflation have fallen and the downside risks to employment have increased. Fed watchers have forecast that the Fed will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more rate cut than was predicted in July, according to a slim majority of economists polled by Reuters. They also think a recession is unlikely. Three rate cuts will take interest rates down to 4.50% to 4.75% by the end of 2024. The unemployment rate is forecast at around the current 4.3% through 2026. Inflation is forecast to ease only slightly over the coming two years, according to median forecasts in the poll. All measures of inflation polled, including the Consumer Price Index, core CPI, personal consumption expenditures price index and core PCE, are expected to stay above 2% until at least 2026. Amazombies Create Horror Story Amazon customers showing up each day with hundreds of packages to return are creating a retail horror story for employees at Staples, Kohl's and the UPS Store. When Amazon first signed deals to turn brick-and-mortar retail stores into Amazon drop-off points, it was viewed as a win-win for everyone. Easier returns would mean happier customers and bring more foot traffic to ailing retail locations. But now store employees say the Amazombies have become a plague on their working lives, wasting staff time without increasing revenue while creating long lines, fraying tempers and generating piles of boxes and plastic waste. Some UPS Store and Kohl's locations have had to add hours or allocate additional staff to handle the workload. One employee at a UPS store near Dallas said they received between 300 and 600 returns a day, noting that Amazon made up about 10% of their profits but took up 90% of the workday. In 2023, Americans racked up $247 billion in online returns, according to the National Retail Federation. Last year, some UPS Store locations started charging about $1 per package they handle. UPS Stores have long accepted Amazon returns, and Whole Foods began taking them shortly after Amazon acquired the chain in 2017. Kohl's was next, in 2018, with Staples following last year. Dwell Time Something to Dwell On Consumers are becoming more mission-driven, making fewer, but more efficient trips to the store, according to a new report from foot traffic analytics firm Placer.ai. When customers visit retail giants like Costco, Target and Walmart, the time they spend inside each stores varies significantly. The variation, which the firm captured by a metric known as “dwell time,” measures how long shoppers linger in a store. Placer.ai found that a trip to Target and Walmart has been becoming increasingly faster over the last four years. Meanwhile, a Costco run has steadily gotten longer over that time span. Despite the ebb and flow of mission-driven shopping, Costco’s dwell times have remained steady. That could in part be due to the warehouse retailer’s bulk offerings, endless free samples, and cheap food court items (like its $1.50 hot dog combo). © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
Comments are closed.
|
|
