Wal-Mart, Target, Sears et al are lobbying legislators to change sales-tax laws in more than a dozen states including Texas and California that will force Internet Retailers to collect Sales Taxes from companies like Amazon. 

Retailers Push Amazon on Taxes

The big-box stores are backing a coalition called the Alliance for Main Street Fairness, which is leading efforts to change sales-tax laws in more than a dozen states including Texas and California.

Until now, the group has been largely associated with mom-and-pop stores, spotlighting stories of small toy shops and booksellers who argue Internet merchants that aren't legally required to collect sales taxes enjoy an unfair advantage with shoppers.

Amazon has feverishly fought efforts to compel it to collect sales taxes. The Seattle-based online retailer says it complies with the law. Under a 1992 U.S. Supreme Court ruling, only merchants who have a physical presence, such as stores, in a state have to collect sales taxes. Amazon currently gathers those taxes in just five states: Kansas, Kentucky, North Dakota, its home base of Washington, and New York.

But retailers pushed for passage of a new law in Illinois last week that forces Amazon to collect sales taxes if it employs marketing affiliates in the state—a measure similar to a New York law that retailers want to replicate nationally—and their drumbeat may soon spur federal action.

Retailers are spending millions of dollars on weekly circulars and its distribution along with Newspapers through mail. Taking this spend online can help Retailers save substantial dollars as well as increase usage/reach using social media features. MSN does exactly that and comes to their rescue with their new Local Deals site. MSN unveiled a new localized deals site through an interactive online circulars experience as part of MSN Local Edition – http://deals.msn.com.  So far Kohl’s, Target, Staples and RadioShack have signed up on the site. The circular page features Silverlight and DeepZoom technology, which will provide an immersive consumer experience. The users will be able to:

• Rotate through various circulars all on one screen
• Browse and ‘flip’ through pages just like with traditional circulars
• Search for products across all the circulars at once
• Zoom in on products within a circular at a high resolution
• Hover over to learn more about a specific product, including reviews on Bing shopping
• Add items to a shopping list
• Find retailer locations using Bing Maps
• Share finds with others through social media like Facebook, Twitter, and Windows Live
• Link to a retailer’s site to purchase a product online

The circulars will refresh as often as retailers update information in ShopLocal (who is providing the back-end data for our circular experience) – usually weekly. Circulars that are not current will not be visible, ensuring that consumers are always browsing fresh content. Additionally, since the destination site is geo-targeted, only relevant circulars for a consumer’s location will be shown.

A newly released study by Kantar Retail and BrandZ examines the most valuable global retail brands and reveals critical success requirements for retailers and suppliers to thrive in the new retail environment. The Top 20 Most Valuable Global Retail Brands report combines retailer and shopper insights and analyses from Kantar Retail with the definitive Top 100 Most Valuable Global Brands ranking produced annually by Millward Brown Optimor and powered by the BrandZ database. Walmart tops the list followed by Amazon, Tesco, Carrefour and Target.

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Retailers are adopting new strategies in targeting its loyal customers (WSJ, Registration reqd) by using Analytics and advertising promotions on an individual basis. This is a shift from earlier times when Retailers would send similar email promotion to all. Retailers like Sears, Gap, Target are using analytics to tap their most profitable customers and shying away from TV commercials

It's an adage of the business: Persuading a satisfied customer to return is cheaper than attracting a new one. Now, in the struggle to do more with less, that concept is becoming even more important.

Acquiring a new customer costs about five to seven times as much as maintaining a profitable relationship with an existing customer, says Marc Fleishhacker, managing director at WPP's Ogilvy Consulting, which designed the campaign for Sears.

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Sears and Ogilvy have developed a system to identify the categories of merchandise Sears customers have purchased in the past and to measure the chance that they will buy those sorts of items again this season. That helps Sears determine the type of emails and point-of-sale offers to aim at individual customers.

When customers buy an item online, Sears confirms the purchase with an email including a promotion tied to that product. A person who buys a new appliance at Sears.com might get an email offering a deal on the store's extended-warranty program.

Weak economy spurred by Subprime crisis has a different meaning for Target and Wal-Mart. While Target is struggling with slipping sales, Wal-Mart has readjusted itself with it's even more discounted merchandise and has seen sales increase. In what is being dubbed as the "trading down within the store", customers are buying lower priced items with more discount.

Rosa Setkiewicz, 50, stopped at the Target in Jersey City, New Jersey, recently to stock up on Arm & Hammer baking soda, Clorox bleach and Downy laundry detergent — "things that are cheap," she said as she loaded the trunk of her Toyota Corolla. "I have cut back a lot on clothing and things that are not necessary."

Bill Dreher, an analyst at Deutsche Bank Securities, dubbed this phenomenon "trading down within the store."

Target executives acknowledge there is some truth to the theory. But the bigger issue, in their view, is that the number of customers walking into Target's stores has dropped. They see that as a sign not of any tactical failure on Target's part, but of rising doubts among consumers about the economy.

"I think people are being more conservative in an environment where they are uncertain," said Susan Kahn, vice president of communications at Target.

Wal-Mart also had not made things easier for Target.

Target also faces a tough adversary this year in Wal-Mart, which has staked its holiday season on heavily promoted discounts. The chain held early-morning, door-buster sales every weekend in November in an effort to steal the thunder from its rivals, which generally waited until the day after Thanksgiving to stage such sales.

Target countered with a display of merchandise priced at $1 in the lobbies of its stores, sending a strong low-price message as consumers walked in.

Nevertheless, Todd Slater, a retail analyst at Lazard, said that "Wal-Mart may be better positioned for an economic downturn than Target, because it is the price leader." He added that "Target is more the fashion leader; it's more upscale."

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