tag:theconversation.com,2011:/ca-fr/topics/online-shopping-913/articlesOnline shopping – La Conversation2024-01-01T20:33:58Ztag:theconversation.com,2011:article/2154422024-01-01T20:33:58Z2024-01-01T20:33:58ZWhat is dropshipping? 6 things to consider before you start dropshipping as a side hustle<figure><img src="https://images.theconversation.com/files/556502/original/file-20231030-23-sz3v30.jpg?ixlib=rb-1.1.0&rect=0%2C24%2C8192%2C5432&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-woman-shopper-consumer-receiving-parcel-2093630602">Shutterstock</a></span></figcaption></figure><p>You buy a new phone case from an online retailer. The phone case arrives safely at your house, the online retailer makes a small profit and everyone is happy. </p>
<p>But the phone case didn’t come from the retailer’s premises. It was sent directly from the manufacturer. The only thing the online retailer did was take your order and organise for the factory to deliver the case to your home.</p>
<p>This is “dropshipping”: where an online seller organises to have purchased products sent to buyers directly from the wholesaler or manufacturer, rather than sending it themselves. Many see dropshipping as, if not their main business, then as a valuable side hustle to help bolster income when the cost-of-living crunch is making it hard to make ends meet.</p>
<p>In other words, the seller doesn’t own a warehouse of products ready for shipping. They’re a middleman. They organise delivery of products to customers without taking physical possession.</p>
<p>Dropshipping may sound like an appealing side hustle to help offset the cost-of-living crunch but there are downsides, too. </p>
<p>So, what do you need to know before you become a dropshipper?</p>
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Read more:
<a href="https://theconversation.com/temu-chinas-answer-to-amazon-is-already-australias-most-popular-free-app-what-makes-it-so-addictive-212463">Temu: China's answer to Amazon is already Australia's most popular free app. What makes it so addictive?</a>
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<h2>There are pros and cons</h2>
<p><a href="https://www.statista.com/statistics/1264272/dropshipping-market-size/">Dropshipping has doubled since 2020</a>, and is expected to double again by 2027. </p>
<p>Websites with e-commerce features are also increasingly affordable, and since the barrier to entry for starting a dropshipping business is low, it has become a popular method for making extra money.</p>
<p>Dropshipping eliminates “inventory costs”, which includes things like: </p>
<ul>
<li><p>buying the products upfront</p></li>
<li><p>paying warehouse rent, and </p></li>
<li><p>paying staff to package and ship. </p></li>
</ul>
<p>Since dropshippers don’t need to hold any inventory, they’re able to offer a wider selection of products to sell. Low startup costs also make dropshipping more accessible to a wider range of people than traditional businesses.</p>
<p>So dropshipping has clear advantages over traditional methods of selling online – but it’s not all rosy. </p>
<p>The main problem with dropshipping is loss of control over the delivery and fulfilment process. </p>
<p>If a problem with delivery arises, it can be more difficult to resolve. Is the problem with the manufacturer? The warehouse? The delivery service? Sometimes it can be unclear and take longer to address than the customer would like.</p>
<p>This can threaten the seller’s ability to offer superior customer service. </p>
<p>Here are six things worth knowing before you launch into dropshipping as your side hustle.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person types on a computer keyboard" src="https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556499/original/file-20231030-15-dmuy5h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Websites with e-commerce features are increasingly affordable.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/image-mans-hands-typing-selective-focus-95538487">Shutterstock</a></span>
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<h2>1. Supplier reputation matters</h2>
<p>Dropshipping isn’t new – brands in the late 1990s were doing it. But with this maturity has arisen opportunities for fraud. </p>
<p><a href="https://ipic.ca/english/blog/dropshipping-a-gateway-for-the-sale-of-counterfeit-goods-2021-06-25">Counterfeits, knock-offs, and general quality issues</a> are worryingly commonplace in the dropshipping world. </p>
<p>Choose a reputable supplier with clear systems and processes to control product quality and eliminate copyright infringement.</p>
<h2>2. Choose a local supplier</h2>
<p>To remain competitive, delivery speed is key. If your target audience is in Australia, shipping from foreign soils won’t cut it – the delivery times are too long.</p>
<p>Consumers are willing to wait to receive their products on some occasions, but most of the time consumers want it now. </p>
<p>Choose a local, reputable supplier to minimise delivery times.</p>
<h2>3. Don’t assume quality</h2>
<p>One of the biggest mistakes dropshippers make is not physically inspecting products before listing them for sale. </p>
<p>Dropshipping enables sellers to offer a wider range, since shelf-space isn’t an issue. But that may tempt you to keep adding new products to the catalogue. </p>
<p>The quality of products from dropshipping suppliers varies considerably, and what looks great on screen might look very different in hand. </p>
<p>Selling poor quality products means more customer service requests, and ultimately consumers start to associate your brand with poor quality. </p>
<p>Always get a new product sent for physical inspection before listing them in your sales catalogue.</p>
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<a href="https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man looks disappointed when he opens a package." src="https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556500/original/file-20231030-21-h130m6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Selling poor quality products means more customer service requests.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-young-hispanic-man-received-wrong-2311006365">Shutterstock</a></span>
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<h2>4. Develop a relationship with your supplier</h2>
<p>The best way to resolve potential delivery issues associated with dropshipping is to build a strong relationship with the supplier. </p>
<p>Many suppliers do not offer support services when things go wrong. These suppliers should be treated with caution. </p>
<p>Developing a strong, collaborative relationship with a willing supplier makes service failures easier to deal with.</p>
<h2>5. Stand out from the crowd</h2>
<p>Doing business online is not easy – all your competitors are just a click or a tap away. Dropshipping is common, and many other websites are selling the same things as you, potentially from the same supplier. </p>
<p>Standing out from the crowd is key. Differentiate yourself from other dropshippers by servicing niche markets and offering superior after-sales support.</p>
<h2>6. The customer sets demand</h2>
<p>Don’t add more and more products to your catalogue until you’re offering everything under the sun; this sets you up for failure because you end up offering everything to no-one. </p>
<p>Specialisation is key. Find an easily reachable and sizeable audience and stick to what they want, not what you <em>think</em> they want. </p>
<p>Careful attention to sales data will help clarify what it is your customers are telling you they want.</p>
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Read more:
<a href="https://theconversation.com/accc-says-consumers-need-more-choices-about-what-online-marketplaces-are-doing-with-their-data-182134">ACCC says consumers need more choices about what online marketplaces are doing with their data</a>
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<p class="fine-print"><em><span>In 2019 Brent Coker developed the Wear Cape app - a high engagement content production and seeding app designed for agencies specialising in influencer marketing strategies.</span></em></p>Websites with e-commerce features are increasingly affordable, and since the barrier to entry for starting a dropshipping business is low, it has become a popular method for making extra money.Brent Coker, Lecturer in Marketing, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2192802023-12-13T13:36:15Z2023-12-13T13:36:15ZBig-box retail chains were never a solution for America’s downtowns − and now they’re fleeing back to suburbia<figure><img src="https://images.theconversation.com/files/564994/original/file-20231211-89932-pedkqb.jpg?ixlib=rb-1.1.0&rect=12%2C0%2C2032%2C1529&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Merchandise is locked in cases to guard against theft in a Target store in New York City on Sept. 23, 2023. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/target-retail-stores-in-new-york-city-have-installed-locked-news-photo/1726478336">Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images</a></span></figcaption></figure><p>Holiday shopping is in full swing, but city dwellers may have fewer options for buying in person than they did a few years ago. That’s because many large chain stores are pulling out of central cities. </p>
<p>This trend has been building for several years. Target made national headlines in 2018 when it closed its store in a <a href="https://www.nytimes.com/2021/06/30/business/target-baltimore-store-closings.html">predominantly Black Baltimore neighborhood</a> after just 10 years of operation. COVID-19 sped things up by cutting foot traffic in city centers and boosting online commerce. </p>
<p>Target has <a href="https://www.cnn.com/2023/10/12/business/target-closing-us-cities-crime-dg/index.html">closed additional stores</a> in Chicago, Milwaukee, New York, San Francisco, Seattle and Portland, Oregon. <a href="https://www.businessinsider.com/walmart-store-closings-2023-full-list">Walmart</a>, <a href="https://www.thestreet.com/retailers/cvs-is-permanently-closing-hundreds-of-stores-for-a-surprising-reason">CVS</a>, <a href="https://www.usatoday.com/story/money/shopping/2023/11/29/rite-aid-store-closures-grow/71744831007/">Rite Aid</a> and Walgreens have also closed many urban stores.</p>
<p>Closures have spread to many suburbs and small towns. Retailers saddled with high debt, overexpansion, <a href="https://nrf.com/research/national-retail-security-survey-2023">shoplifting losses</a>, slumping sales and <a href="https://www.jpmorganchase.com/institute/research/cities-local-communities/post-covid-consumer-spending-in-new-york-city">online competition</a> are shedding stores fast. But this contraction lopsidedly affects city dwellers, who often lack the shopping options and price competition suburbanites enjoy. </p>
<p>Many news reports, particularly from conservative outlets, have <a href="https://www.nationalreview.com/corner/manhattan-retail-is-getting-destroyed-by-shoplifting/">blamed lawlessness</a> and <a href="https://www.wsj.com/articles/the-root-causes-of-san-franciscos-disorder-crime-homeless-911-auto-theift-public-disorder-a45b170c">weak leadership by progressive city governments</a>. In my view, however, there’s another important factor: flawed corporate strategies.</p>
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<figcaption><span class="caption">As big-box chain drugstores close in St. Louis, an independent pharmacy works to fill the gap with more personal service.</span></figcaption>
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<h2>The self-service revolution</h2>
<p>The concept of letting shoppers serve themselves dates back to 1879, when Frank W. Woolworth <a href="https://guides.loc.gov/this-month-in-business-history/february/woolsworth">opened his first store in Utica, New York</a>. Its successors grew into the F.W. Woolworth chain of “five-and-dime” discount dry goods stores, which became fixtures of hundreds of cities, suburbs and small towns in the early 20th century. </p>
<p>Food stores followed suit in the early 1900s, beginning with the <a href="https://www.supermarketnews.com/archive/early-stores-pioneer-self-service-concept">Alpha Beta chain</a> in California in 1914 and <a href="https://mypigglywiggly.com/aboutus/">Piggly Wiggly</a> in Tennessee in 1916. Instead of having clerks gather customers’ orders from store shelves, these stores let shoppers loose in the aisles, then allowed them to pay at the end of their visit.</p>
<p>This approach seeded the meteoric rise of “big box” stores like <a href="https://www.thestreet.com/markets/history-of-walmart-15092339">Walmart</a> and <a href="https://corporate.target.com/about/purpose-history/history-timeline?era=2">Target</a> in the mid-20th century. With their low manufacturing costs, streamlined logistics, minimally staffed stores, national advertising and vast inventories, big-box chains <a href="https://www.npr.org/2012/11/19/165295840/the-past-and-future-of-americas-biggest-retailers">drove many small retailers out of business</a> – and most Woolworth stores, too. </p>
<p>Self-service came to rule the suburbs, where big chains could build mega-stores with plenty of parking. But they were rare in central cities for most of the 20th century, except for a few affluent enclaves, such as West Los Angeles or Chicago’s North Side. Generally, these chains avoided poor neighborhoods and many downtowns altogether. </p>
<p>As shoppers increasingly gravitated to suburban malls, many urban neighborhoods became <a href="https://www.city-journal.org/article/the-return-of-urban-retail-deserts">retail deserts</a>, with few vendors meeting local needs. Those that endured, often run by small-scale entrepreneurs, typically were businesses that offered a single type of product, such as grocery stores, delicatessens or pharmacies. </p>
<h2>Chains discover downtowns</h2>
<p>Harvard management professor <a href="https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532">Michael Porter</a> drew attention to the lack of retail services in densely populated urban neighborhoods in a seminal 1995 article, “<a href="https://hbr.org/1995/05/the-competitive-advantage-of-the-inner-city">The Competitive Advantage of the Inner City</a>.” Economic development, Porter argued, was key to revitalizing inner cities – and these zones housed a lot of potential customers.</p>
<p>“Even though average inner city incomes are relatively low, high population density translates into an immense market with substantial purchasing power,” Porter wrote. “Ultimately, what will attract the inner city consumer more than anything else is a new breed of company that is not small and high-cost but a professionally managed major business employing the latest in technology, marketing, and management techniques.” </p>
<p>Chains of many kinds began to <a href="https://www.npr.org/2010/12/21/132231472/big-box-retailers-move-to-smaller-stores-in-cities">rediscover the central city market</a> in the early 2000s. <a href="https://nyc-business.nyc.gov/nycbusiness/article/reduce-operating-expenses">Tax breaks</a> and subsidized redevelopment projects often greased the wheels. Urban gentrifiers were reliably drawn to new urban chain stores like Target, Walmart and Whole Foods.</p>
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<p>Many small retail shops now faced a juggernaut of national chains. One example was <a href="http://dx.doi.org/10.1001/jamainternmed.2019.4588">independent pharmacies</a>: Between 2009 and 2015, 1 in 4 urban pharmacies in low-income neighborhoods closed.</p>
<p>And chain stores often failed to generate major benefits for their new neighborhoods. Employees had few chances for advancement beyond <a href="https://www.epi.org/press/new-company-wage-tracker-shows-low-wages-are-the-norm-at-large-retail-and-food-service-employers/">minimum-wage hourly work</a>. Clustering of chain stores in prosperous neighborhoods and business districts failed to address “food deserts” <a href="https://www.ers.usda.gov/amber-waves/2011/december/data-feature-mapping-food-deserts-in-the-u-s/">in impoverished areas</a>.</p>
<h2>Broken big boxes</h2>
<p>Certain qualities that made chains so successful – national sales strategies, self-service stores and brand awareness – are proving to be liabilities in today’s more complicated and divided urban context. </p>
<p>Retail executives and their <a href="https://nrf.com/advocacy/policy-issues/organized-retail-crime">trade associations</a> have cited excessive shoplifting losses and weak law enforcement as factors in urban store closures, even though they have conspicuously <a href="https://www.theatlantic.com/health/archive/2021/12/shoplifting-holiday-theft-panic/621108/">failed to provide shoplifting data</a> by location. There are signs, moreover, that <a href="https://www.nytimes.com/2023/12/08/business/organized-shoplifting-retail-crime-theft-retraction.html">shoplifting is receding</a>, except for in a few large cities like New York.</p>
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<p>In my opinion, there are three reasons why city chain stores are closing at such a high rate compared with those in suburbs.</p>
<p>First, despite job recovery in many cities since the pandemic, low-income urban households remain in crisis, with <a href="https://www.nytimes.com/2023/01/25/realestate/rent-burdened-american-households.html">high rents</a> and inflation driving up the cost of essentials. According to the nonprofit Brookings Institution, 9.6% of suburban residents lived in poverty in 2022, compared with about <a href="https://www.brookings.edu/articles/post-pandemic-poverty-is-rising-in-americas-suburbs/">16.2% in primary cities</a>. Widespread poverty in a city like Baltimore, for instance, is reflected in the <a href="https://mdfoodbank.org/hunger-in-maryland/maryland-hunger-map/">concentration of food banks</a> on the west and east sides. </p>
<p>Less disposable income, compounded by shoplifting losses, can lead to store closures – especially since national chains like Target and Walmart expect the dollar value of sales from stores that have been open for more than a year to <a href="https://www.wallstreetmojo.com/same-store-sales/">increase steadily over time</a>. </p>
<p>Second, urban chains clustered too many of their own branches close together or too near other chains – usually in high-income residential or business districts. <a href="https://www.nytimes.com/2009/07/09/business/media/09adco.html">Manhattan below 96th Street</a> is a clear example of this pattern. With affluent customers shifting to online shopping, and reduced foot traffic overall thanks to remote work, this aggressive strategy has failed. </p>
<p>Third, widely distributed <a href="https://www.cnn.com/2023/12/07/business/shoplifting-surge-hype-nightcap/index.html">media images of rampant shoplifting</a> send a message at odds with these chains’ powerful brand images of order, safety and standardization. A <a href="https://counciloncj.org/shoplifting-trends-what-you-need-to-know/">small but rising share</a> of shoplifting incidents since 2019 have involved assaults or other crimes. These events have the potential to <a href="https://www.vox.com/money/23938554/shoplifting-organized-retail-crime-walmart-target-theft-laws">scare executives</a> concerned about employee lawsuits. Chains want urban locations but not “urban” reputations. </p>
<h2>Retail flight</h2>
<p>Large retail chains have finally figured out that cities aren’t suburbs. Those that remain are adding staff, scaling back self-checkout, checking receipts at exits and <a href="https://www.kqed.org/news/11949025/why-are-retail-stores-locking-up-basic-necessities">locking down higher-priced goods</a> – essentially, abandoning the self-service model. However, these costly measures won’t bring back online-addicted shoppers or daily commuters, nor will they put more money in struggling consumers’ pockets.</p>
<p>Responding to retail association pressure, some city and state governments are imposing <a href="https://www.cnbc.com/2023/08/11/organized-retail-crime-nine-states-pass-laws-to-crack-down-on-theft.html">stricter punishments for shoplifting</a> and cracking down on <a href="https://www.youtube.com/watch?v=5RIjWTO2Yz4">black-market vending</a> on sites like Amazon and eBay. However, it isn’t clear that this get-tough approach can or should rescue the big-box model, since these stores failed to create safe, secure shopping environments in the first place.</p>
<p>As I see it, the urban chain store implosion raises questions about whether suburban-style retail really does much for cities. These stores are mediocre job creators, undercut local entrepreneurs, often <a href="https://www.strongtowns.org/journal/2022/9/13/mainstreet-vs-chain-stores-a-western-north-carolina-analysis">pay relatively low property taxes</a> and build ugly parking lots. They also don’t provide the kind of “<a href="https://medium.com/i-cities/eyes-on-the-street-ab12b39b960b">eyes on the street</a>” local security that small-scale shopkeepers do. In fact, their parking lots and open aisles seem to <a href="https://www.cbsnews.com/newyork/news/yonkers-shoplifting-big-box-stores/">attract disorder</a>.</p>
<p>Shoehorning suburban-style stores into urban neighborhoods now looks like a Band-Aid for much deeper urban problems. In my view, city leaders would do better to focus on <a href="https://www.recastyourcity.com/">building local capacity</a> and protecting smaller stores that usually have greater local wealth-building potential, more reasonable growth expectations and the kind of personal service that <a href="https://www.sfgate.com/bayarea/article/how-retail-crime-impacts-business-16720683.php">naturally deters shoplifting</a>.</p><img src="https://counter.theconversation.com/content/219280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicholas Dagen Bloom does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shoplifting has been hyped as a driver of chain-store closures, but did these companies ever really understand urban environments in the first place?Nicholas Dagen Bloom, Professor of Urban Policy and Planning, Hunter CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2168332023-11-23T00:48:52Z2023-11-23T00:48:52ZHow risky is it to give card details over the phone and how do I reduce the chance of fraud?<p>Paying for things digitally is so common, most of us think nothing of swiping or tapping our card, or using mobile payments. While doing so is second nature, we may be more reluctant to provide card details over the phone.</p>
<p>Merchants are allowed to ask us for credit card details over the phone – this is perfectly legal. But there are minimum standards they must comply with and safeguards to protect consumer data.</p>
<p>So is giving your card details over the phone any more risky than other transactions and how can you minimise the risks?</p>
<h2>How is my card data protected?</h2>
<p>For a merchant to process card transactions, they are expected to comply with the <a href="https://docs-prv.pcisecuritystandards.org/PCI%20DSS/Standard/PCI-DSS-v4_0.pdf">Payment Card Industry Data Security Standard</a>. This is a set of security requirements designed to protect cardholder data and the trillions of dollars of transactions each year.</p>
<p>Compliance involves various security measures (such as encryption and access controls) together with strong governance and regular security assessments.</p>
<p>If the information stored by the merchant is accessed by an unauthorised party, encryption ensures it is not readable. That means stealing the data would not let the criminals use the card details. Meanwhile, access controls ensure only authorised individuals have access to cardholder data.</p>
<p>Though all companies processing cards are expected to meet the compliance standards, only those processing large volumes are subject to mandatory regular audits. Should a subsequent data leak or misuse occur that can be attributed to a compliance failure, a <a href="https://www.csoonline.com/article/569591/pci-dss-explained-requirements-fines-and-steps-to-compliance.html">company can be penalised</a> at levels that can escalate into millions of dollars.</p>
<p>These requirements apply to all card transactions, whether in person, online or over the phone. Phone transactions are likely to involve a human collecting the card details and either entering them into computer systems, or processing the payment through paper forms. The payment card Security Standards Council has <a href="https://docs-prv.pcisecuritystandards.org/Guidance%20Document/Telephone-Based%20Payments/Protecting_Telephone_Based_Payment_Card_Data_v3-0_nov_2018.pdf">detailed guides for best practice</a>:</p>
<blockquote>
<p>A policy should be in place to ensure that payment card data is protected against unauthorised viewing, copying, or scanning, in particular on desks.</p>
</blockquote>
<p>Although these measures can help to protect your card data, there are still risks in case the details are misplaced or the person on the phone aren’t who they say they are.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ai-scam-calls-imitating-familiar-voices-are-a-growing-problem-heres-how-they-work-208221">AI scam calls imitating familiar voices are a growing problem – here's how they work</a>
</strong>
</em>
</p>
<hr>
<h2>Basic tips for safe credit card use over the phone</h2>
<p>If you provide card details over the phone, there are steps you can take to minimise the chance you’ll become the victim of fraud, or get your details leaked.</p>
<p><strong>1. Verify the caller</strong></p>
<p>If you didn’t initiate the call, hang up and call the company directly using details you’ve verified yourself. Scammers will often masquerade as a well-known company (for example, an online retailer or a courier) and convince you a payment failed or payment is needed to release a delivery.</p>
<p>Before you provide any information, confirm the caller is legitimate and the purpose of the call is genuine.</p>
<p><strong>2. Be sceptical</strong></p>
<p>If you are being offered a deal that’s too good to be true, have concerns about the person you’re dealing with, or just feel something is not quite right, hang up. You can always call them back later if the caller turns out to be legitimate.</p>
<p><strong>3. Use secure payment methods</strong></p>
<p>If you’ve previously paid the company with other (more secure) methods, ask to use that same method.</p>
<p><strong>4. Keep records</strong></p>
<p>Make sure you record details of the company, the representative you are speaking to and the amount being charged. You should also ask for an order or transaction reference. Don’t forget to ask for the receipt to be sent to you.</p>
<p>Check the transaction against your card matches the receipt – use your banking app, don’t wait for the statement to come through.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Close up of a hand entering pin code at an ATM" src="https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560960/original/file-20231122-15-8f2rll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cancelling your card is a hassle, but it’s the best way to prevent further funds being stolen from your account.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/person-holding-white-and-red-card-utWyPB8_FU8">Eduardo Soares/Unsplash</a></span>
</figcaption>
</figure>
<h2>Virtual credit cards</h2>
<p>In addition to the safeguards mentioned above, a <a href="https://www.forbes.com/advisor/credit-cards/virtual-credit-card-numbers-guide/">virtual credit card</a> can help reduce the risk of card fraud. </p>
<p>You probably already have a form of virtual card if you’ve added a credit card to your phone for mobile payments. Depending on the financial institution, you can create a new credit card number linked to your physical card.</p>
<p>Some banks extend this functionality to allow you to generate unique card numbers and/or CVV numbers (the three digits at the back of your card). With this approach you can easily separate transactions and cancel a virtual card/number if you have any concerns.</p>
<h2>What to do if you think your card details have been compromised or stolen?</h2>
<p>It’s important not to panic, but quick action is essential: </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Screenshot of on-line banking app showing card settings" src="https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1068&fit=crop&dpr=1 600w, https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1068&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1068&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1342&fit=crop&dpr=1 754w, https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1342&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/557967/original/file-20231107-267416-uv1h9n.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1342&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Example credit card restrictions in a banking app.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<ul>
<li><p>call your bank and get the card blocked so you won’t lose any more money. Depending on your situation, you can also block/cancel the card through your banking app or website</p></li>
<li><p>report the issue to the police or other relevant body</p></li>
<li><p>monitor your account(s) for any unusual transactions</p></li>
<li><p>explore card settings in your banking app or website – many providers allow you to limit transactions based on value, restrict transaction types or enable alerts</p></li>
<li><p>you may want to consider registering for <a href="https://theconversation.com/your-credit-report-is-a-key-part-of-your-privacy-heres-how-to-find-and-check-it-116999">credit monitoring services</a> and to enable fraud alerts.</p></li>
</ul>
<h2>So, should I give my card details over the phone?</h2>
<p>If you want to minimise risk, it’s best to avoid giving card details over the phone if you can. Providing your card details via a website still has risks, but at least it removes the human element. </p>
<p>The best solution currently available is to use virtual cards – if anything goes wrong you can cancel just that unique card identity, rather than your entire card.</p><img src="https://counter.theconversation.com/content/216833/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s legal for a merchant to get your card details over the phone – but it can still be risky. Here’s what you need to know to stay safe.Paul Haskell-Dowland, Professor of Cyber Security Practice, Edith Cowan UniversityIsmini Vasileiou, Associate Professor, De Montfort UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2156212023-10-25T13:07:28Z2023-10-25T13:07:28ZShops can’t save UK high streets but a dose of local character could help them thrive again<figure><img src="https://images.theconversation.com/files/555398/original/file-20231023-23-48765g.jpg?ixlib=rb-1.1.0&rect=89%2C53%2C5901%2C3880&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">High St, Conwy, Wales. Some places have already started to inject some local flavour to their high streets.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/high-st-conwy-wales-uk-september-1519521713">James Clarke/Shutterstock</a></span></figcaption></figure><p>Cratering <a href="https://www.theguardian.com/business/live/2023/oct/20/uk-consumer-confidence-tumbles-inflation-retail-sales-bank-of-england-bonds-business-live">consumer confidence</a> and the collapse of <a href="https://www.theguardian.com/business/2023/aug/29/wilko-closures-job-losses-administrator-rescue-bids-pwc-m2-doug-putman">major UK retailers like Wilko</a> are causing concern about the future of the UK high street. </p>
<p>Both of the major UK political parties proposed solutions to this challenge at their recent annual conferences. The Conservatives announced <a href="https://www.theplanner.co.uk/2023/10/02/government-invests-left-behind-towns">a £1.1 billion package</a> to help revitalise high streets and towns that have been “overlooked”, while the Labour conference included a panel discussion on the <a href="https://www.centreforcities.org/event/labour-party-conference-2023-the-future-for-our-high-streets/">future of high streets</a>. </p>
<p>This focus should not come as a surprise. High streets have traditionally exemplified the <a href="https://compass.onlinelibrary.wiley.com/doi/full/10.1111/j.1749-8198.2008.00117.x">historical, cultural and economic vibrancy of British communities</a>. But today they’re more likely characterised by <a href="https://brc.org.uk/news/corporate-affairs/footfall-feb-23/#:%7E:text=Compared%20to%20pre%2Dpandemic%20levels,and%20Shopping%20Centres%20by%2023.3%25.">modest footfall</a>, <a href="https://www.powertochange.org.uk/news/britains-high-street-crisis-reaches-tipping-point/">derelict buildings</a> and boarded-up windows. </p>
<p>Efforts to help high streets to thrive again should involve making them more individual and uniquely based on local quirks. This quirkiness could be used to attract visitors interested in seeing something new, rather than a repeat of the same shops and businesses on every high street up and down the country. </p>
<p>But all too often, when the problem of the UK’s dying high streets is discussed, the crisis and contraction in retail is often seen as the fundamental challenge to address. While the prosperity and vitality of UK high streets has come to rely heavily upon shoppers, making space for organisations with a social purpose could create more sustainable change. </p>
<h2>Helping the high street to thrive again</h2>
<p>The “<a href="https://www.sciencedirect.com/science/article/pii/S0264275122005637">death of the high street</a>” is usually blamed on the rise of internet shopping. But in reality it reflects more serious weaknesses in the shopping-centred model that has guided the development of these streets since the 1940s. </p>
<p>Over the last three decades, the growth of <a href="https://doi.org/10.1080/13574809708724395">mass production and mass consumption</a> has allowed global corporations to thrive on our high streets, selling products to a worldwide market and making distant places look and feel the same. </p>
<p>Instead, the identity of high streets should be in the hands of the local communities. They could initiate new uses for empty spaces to create a more authentic high street experience. To do this, locals need to ask fundamental questions about their high street: what is it actually for, what makes it <a href="https://www.tandfonline.com/doi/full/10.1080/13574809.2016.1192947">successful</a> and what sort of social and economic functions should it perform.</p>
<p>Developing high streets <a href="https://eprints.lse.ac.uk/85315/">for the local community</a> means ensuring accessibility regardless of income, age, ability or social background. Local authorities can also be empowered to purchase sites at below market value to address the problem of over-priced and under-used high street buildings. </p>
<p>These spaces could be used by the community to provide social benefits including residential housing, community-led initiatives, health-related activities like exercise classes and to house small local businesses – not just commercial retail. This would shift the power over how to save high streets to a model where <a href="https://www.sciencedirect.com/science/article/pii/S0264275122006217">the community decides</a> what’s best. </p>
<p>There have been a number of modest moves in this direction, including <a href="https://www.gov.uk/government/news/high-streets-open-doors-to-community-projects">the opening up of vacant property to community groups</a> and the promotion of various forms of temporary, often low-value commercial activity in central areas. For example, work is currently being done to develop a <a href="https://www.dailypost.co.uk/news/north-wales-news/former-debenhams-store-could-transformed-27523158">health hub</a> at an old Debenhams store on Bangor high street in Wales.</p>
<figure class="align-center ">
<img alt="High street sign with greenery behind it." src="https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/555397/original/file-20231023-29-dtujiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">High streets don’t have to be about shopping.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/old-traditional-english-high-street-sign-1811183569">Harry Wolverson/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Creating authentic high streets</h2>
<p>From a social perspective, community-led initiatives in high streets can also help to maintain, hand down and evolve the <a href="https://www.emerald.com/insight/content/doi/10.1108/JPMD-03-2017-0032/full/html">identity of towns and cities</a>. Social identity creates a sense of belonging and promotes pride and social cohesion among citizens. Tourists and investors may also be attracted when a strong social identity makes a town or city <a href="https://www.tandfonline.com/doi/abs/10.1080/13683500.2012.674105">unique and interesting for visitors</a>. </p>
<p>This kind of <a href="https://doi.org/10.1080/13683500.2012.674105">authenticity</a> is important, not only for the identity of the local community, but also for attracting visitors who might spend money. This shouldn’t be the key focus, but of course it helps the local economy.</p>
<p>Community authenticity is based on culture, customs and traditions. This means ensuring products and experiences such as events, food and works of art are made by the locals, according to their customs and traditions. Of course, in an era of increasing change in our communities, as they constantly reinterpret themselves, what is considered contrived at one time could be considered authentic at another.</p>
<p>Safeguarding the historical essence and genuine character of urban spaces like high streets plays a pivotal role in upholding their distinct identities. On the other hand, <a href="https://www.tandfonline.com/doi/full/10.1080/14775080701496750">authenticity</a> and <a href="https://onlinelibrary.wiley.com/doi/10.1002/casp.2450050507">community identity</a> are dynamic. Community-led initiatives can be used to create and <a href="http://files.localgov.co.uk/high.pdf">share an evolving vision</a> of what a high street should offer locals and visitors.</p>
<p>Thankfully, the decline of the high street has encouraged some appreciation of the important social functions these areas perform. High streets can – and should – encourage social interaction and civic activity, not just business activity, so they not only survive but thrive. In some ways, this vision for the high street harks back to the era before the shopping-centred model came to dominate our towns and cities.</p><img src="https://counter.theconversation.com/content/215621/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>To make a real change to our high streets, we need to think about about the social purpose and economic functions of these areas.Edward Thomas Jones, Senior Lecturer in Economics / Director of the Institute of European Finance, Bangor UniversityLinda Osti, Senior Lecturer, Bangor UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2160472023-10-24T15:41:54Z2023-10-24T15:41:54ZAmazon delivery drones: how the sky could be the limit for market dominance<figure><img src="https://images.theconversation.com/files/555321/original/file-20231023-17-9b4vgi.jpg?ixlib=rb-1.1.0&rect=130%2C32%2C5267%2C2781&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/drone-delivery-concept-autonomous-unmanned-aerial-1887259213">metamorworks/Shutterstock</a></span></figcaption></figure><p>Amazon’s <a href="https://www.bbc.co.uk/news/business-67132527">latest plan</a> to use drones to deliver packages in the UK by the end of 2024 is essentially a relaunch. It was ten years ago that the company’s founder Jeff Bezos first <a href="https://www.cbsnews.com/news/amazon-unveils-futuristic-plan-delivery-by-drone/">announced</a> it would fly individual packages through the sky. </p>
<p>Three years later, an impressive <a href="https://www.youtube.com/watch?v=cZP0byX9zng">promotional video</a> revealed that the project was starting out in the British city of Cambridge. But by 2021, the operation appeared to have come to an <a href="https://www.wired.co.uk/article/amazon-drone-delivery-prime-air">abrupt halt</a>.</p>
<p>Now it seems the company <a href="https://www.cnbc.com/2023/01/20/amazon-drone-unit-hit-with-layoffs-as-long-awaited-program-launches.html">was undeterred</a> by that pause. The dream of sending drones to UK homes bearing (not very heavy) items that we cannot wait <a href="https://www.aboutamazon.com/news/transportation/amazon-prime-air-delivery-drone-reveal-photos">more than 30 minutes</a> to have is <a href="https://www.aboutamazon.co.uk/news/operations/amazon-prime-air-drone-delivery-updates">back in play</a>. So, will it work this time?</p>
<p>In the US, progress has been sluggish. Amazon managed a grand total of <a href="https://www.cnbc.com/2023/05/18/amazons-100-drone-deliveries-puts-prime-air-behind-google-and-walmart.html">100 deliveries</a> in May 2023, in two locations. (At one of these locations, in Texas, the company has to <a href="https://www.kbtx.com/2023/07/18/amazon-prime-air-delivery-sees-temporary-pauses-due-heat/">pause operations</a> when the temperature gets too high). </p>
<p>Despite this, Amazon plans to launch delivery drones in two new areas – one in the UK and one in Italy (precise locations are yet to be disclosed). It has a <a href="https://www.aboutamazon.com/news/transportation/amazon-prime-air-delivery-drone-reveal-photos">new model of drone</a> and a vast logistical network at its disposal. </p>
<p>Aside from these key factors, Amazon may well have been inspired by other companies in the sector. The most obvious example is drone delivery of vital <a href="https://www.economist.com/business/2019/06/15/drone-deliveries-are-advancing-in-health-care?ppccampaignID=&ppcadID=&ppcgclID=&utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=18156330227&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gclid=CjwKCAjwp8OpBhAFEiwAG7NaErvVk5B9ZdJ9IpPlsshtkDmp0Xf7UpMkdys6iHS8azSijz7dEnAoiBoCAzsQAvD_BwE&gclsrc=aw.ds">medical supplies</a>. </p>
<p>Zipline started delivering blood and medicine to remote places in Rwanda, and has now expanded <a href="https://www.cnbc.com/2019/04/24/with-ghana-expansion-ziplines-medical-drones-now-reach-22m-people.html">to Ghana</a> and <a href="https://www.cnbc.com/2020/05/27/zipline-novant-health-launch-us-drone-service-to-fight-pandemic.html">the US state of North Carolina</a>. Other companies <a href="https://about.ups.com/us/en/our-stories/innovation-driven/drone-covid-vaccine-deliveries.html">such as UPS</a> and <a href="https://www.theverge.com/2022/7/14/23217294/wing-drone-delivery-package-size-prototype">Google’s Wing</a> have started offering similar services. </p>
<p>But what these success stories have in common is that they are cost-efficient – pharmaceutical products weigh little and are typically expensive enough to justify the use of a drone – and they are focused on areas which are not densely populated. </p>
<p>In contrast, Amazon’s <a href="https://www.businessinsider.com/amazon-prime-air-drone-delivery-cost-63-per-package-2025-2022-4?r=US&IR=T">own estimates</a> put the cost of delivering a single package at $484 (£395) today, which it expects to reduce to $63 (£51) by 2025. Offering customers <a href="https://www.chargedretail.co.uk/2022/04/08/amazon-prime-air-drone-delivery/">free or cheap drone delivery</a> will be extremely expensive. </p>
<p>Amazon’s solution to this is likely to be the same one it has used so successfully over the last two decades: increasing the scale of its operation. After all, at the start of the century, <a href="https://www.washingtonpost.com/wp-srv/washtech/daily/nov98/amazon110898.htm">many wondered</a> how e-commerce could ever be profitable. Now, millions of people buy from Amazon, and that vast number of customers is key to its success. </p>
<p>But Amazon’s business plan seems to rely on <a href="https://theconversation.com/us-regulator-is-suing-amazon-heres-what-this-could-mean-for-your-online-shopping-214669">dominating the market</a>. And for air deliveries, this means not only dropping packages in rural areas, but being available in cities where more than half the <a href="https://ourworldindata.org/urbanization">world’s population live</a>.</p>
<figure>
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</figure>
<p>While it may be easy to convince the residents of a small, low-density area to trial boxes of <a href="https://www.bbc.co.uk/news/business-67132527">toothpaste and mouthwash</a> landing in their gardens, it might be much more difficult to persuade residents of apartment buildings to accept drones flying past their windows carrying their neighbour’s delivery of dog biscuits.</p>
<p>Added to this are the laws regulating the use of drones. In the UK, for example, <a href="https://www.gov.uk/government/news/drones-are-you-flying-yours-safely-and-legally">you are not allowed</a> to fly one over congested areas or within 50 metres “of a person, vehicle or building not under your control”.</p>
<h2>The higher they fly, the harder they fall</h2>
<p>Cities will not simply let commercial drones take to the skies – at least not without charging for the nuisance they generate. They will either ban drones in densely populated areas, or seek further regulation.</p>
<p>If regulation is the route taken, a new hurdle arises which is similar to the allocation of radio waves or mobile phone network licenses – that there will only be enough space for a few operators (sometimes just one). </p>
<p>This allocation usually happens through a bidding process. And studies of <a href="https://www.sciencedirect.com/science/article/pii/S0014292101002185?casa_token=5lyPmXGWB64AAAAA:vqaBwGRlmFM7bS0VCCnalZg2M5HydSsuVXPsfl1jL3Zq5e6V1p8IO73pDIX4UTUtu4qe2jgDUbU">auctions of telecom licenses</a> show the importance of involving multiple credible operators. But having different firms winning the right to deliver in different cities could easily reduce the level of reach that Amazon would need to succeed. </p>
<p>An alternative scenario would see a single operator in charge of all drone deliveries. But this raises a <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/261392?casa_token=eT1pb4EyF18AAAAA:wK8CADwDrpC006mLOD594LIvOD7GazV9aaiYrptATbK4v9qLRI9Ak1gjaD3p6NUr1nz6bfe_Smqe">familiar economic problem</a>, where natural monopolies emerge in sectors like water provision or other kinds of infrastructure. </p>
<p>For, while society can often benefit from the innovation potential of the private sector, having only one firm in the market opens up the possibility of abuse. For instance, the <a href="https://www.sciencedirect.com/science/article/pii/S0957178712000422">privatisation of water in the UK</a> has come with a regulator which chooses the prices companies can charge, and never-ending debates on the <a href="https://lordslibrary.parliament.uk/sewage-pollution-in-englands-waters/">regulation of sewage</a> and <a href="https://www.bbc.co.uk/news/business-45033486">leakages</a>.</p>
<p>Regardless of which company is awarded the business, external regulation usually involves a requirement to treat all consumers fairly and equally – which would mean charging Amazon the same price as its competitors to use the drones. </p>
<p>But fairness and equality are not the goals big companies are interested in when they invest heavily in innovative technology. Their goal is to obtain or keep a <a href="https://www.sciencedirect.com/science/article/pii/S0167718721000023?casa_token=9j_xhdiE7e8AAAAA:-R0UfULXNFEKtSHIX_jQbw5Q3-Cz8knPBh_s4Tagl9KfgEXrhRMS6k6XCHV0YKQNBHFEsYtrb2s">dominant position</a> in the market.</p>
<p>Amazon’s current dominance largely relies on its superior logistical operation: it can deliver quickly, cheaply and reliably everywhere. With drone delivery available to other platforms at the same price, Amazon would lose this competitive advantage. So, if it does manage a successful launch this time around, it could well come at the expense of its current dominance as a logistical operation.</p><img src="https://counter.theconversation.com/content/216047/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Renaud Foucart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Taking express delivery to new heights could be a risky move.Renaud Foucart, Senior Lecturer in Economics, Lancaster University Management School, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146692023-10-06T07:34:41Z2023-10-06T07:34:41ZUS regulator is suing Amazon – here’s what this could mean for your online shopping<figure><img src="https://images.theconversation.com/files/552132/original/file-20231004-27-j64e6i.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4294%2C3214&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/germany-rostock-juni-13-2021-stack-1992003263">Elpisterra/Shutterstock</a></span></figcaption></figure><p>If you’re one of the <a href="https://www.businessinsider.com/amazon-shopping-prime-membership-us-stopped-growing-first-time-ever-2023-1?r=US&IR=T">more than 200 million</a> Prime members Amazon claims to have worldwide, you’ll be well aware of the benefits. Among other things, it gives you access to a video and audio streaming service and free, fast delivery on all Amazon-dispatched items – for <a href="https://www.amazon.co.uk/gp/help/customer/display.html?nodeId=G34EUPKVMYFW8N2U">less than £100 per year</a>. </p>
<p>One of the reasons so many consumers sign up for, <a href="http://germangutierrezg.com/Gutierrez2021_AMZ_welfare.pdf">and value</a>, this service is that Amazon offers a massive range of products that it’s difficult to buy cheaper elsewhere. But if Amazon’s offering is so great, why is the US competition regulator <a href="https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power">suing the online marketplace</a> to force it to change the very service that so many people seem to love? </p>
<p>According to the Federal Trade Commission (FTC), which ensures fair and competitive markets in the US, Amazon looks so good to consumers because it uses its dominant position to force its competitors to look even worse. Amazon makes more sales in the US <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/1910129AmazoneCommerceComplaintPublic.pdf">than the next 15 largest online retail firms combined</a>, so any abuse of its market power could, as the lawsuit claims, “profitably worsen its service for customers”. </p>
<p>In other words, the FTC is accusing Amazon of using its significant market position to offer a less than stellar service because it’s more profitable for the company.</p>
<p>The FTC isn’t saying Amazon is too big. But <a href="https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power#:%7E:text=big%2C%20but%20because-,it%20engages%20in,-a%20course%20of">the regulator believes</a> its business model “prevents current competitors from growing and new competitors from emerging”. </p>
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Read more:
<a href="https://theconversation.com/how-bezos-and-amazon-changed-the-world-154546">How Bezos and Amazon changed the world</a>
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<p>Amazon has called the suit “<a href="https://www.aboutamazon.com/news/company-news/amazon-ftc-antitrust-lawsuit-full-response">misguided</a>” and said that, if successful, it would “force Amazon to engage in practices that actually harm consumers and the many businesses that sell in our store”. Examples it gave included having to feature higher prices, offer slower or less reliable Prime shipping, and make subscriptions more expensive.</p>
<h2>Consumers pay too much</h2>
<p>The FTC’s main claim is that Amazon artificially increases the price of most products sold online – on its platform but also on competing services. And the FTC says Amazon makes a lot of money in this way by squeezing both small businesses and consumers.</p>
<p>Businesses pay advertising fees to have their product displayed on Amazon. They then pay <a href="https://sell.amazon.co.uk/pricing?ref_=sduk_soa_priov_n#selling-plans:%7E:text=Our-,selling%20plans,-give%20you%20the">seller</a> and <a href="https://sell.amazon.co.uk/pricing?ref_=sduk_soa_prirf_n#referral-fees:%7E:text=Amazon%20jargon%3A-,Referral%20fees,-For%20every%20item">referral</a> fees (a percentage of the total price including things like shipping and gift-wrapping) in exchange for using it – and also need to pay for the cost of Amazon’s <a href="https://sell.amazon.com/fulfillment-by-amazon">fulfillment service</a> if they want to be eligible for free delivery. This means businesses send their products to an Amazon warehouse from which they are packed and shipped, but the service can also include dealing with customers and returns processing.</p>
<p>Amazon takes nearly one out of every two dollars of sales from the retailers who pay all those fees, according to <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/1910129AmazoneCommerceComplaintPublic.pdf">the lawsuit</a>. This means a business that wants to charge $1 for a product on its own website must charge almost $2 to make the same profit when selling through Amazon.</p>
<h2>Selling on Amazon</h2>
<p>It would seem more sensible for a seller to offer their product for cheaper on another platform that charges lower fees. But Amazon has made that almost impossible, according to the FTC. The regulator claims the company permanently screens product prices on competing websites. If a business tries to sell for cheaper elsewhere, it is immediately punished.</p>
<p>Forcing sellers to sign a contract that stops them from offering their product for cheaper on another website has been illegal since <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62016CJ0230">2017 in the EU</a>, and Amazon <a href="https://competitionlawblog.kluwercompetitionlaw.com/2019/07/30/bundeskartellamt-ends-abuse-probe-after-amazon-agrees-to-changing-business-terms-for-dealers/">agreed in 2019</a> to also remove these price parity clauses in North America and Asia. A study of the hotel platform booking.com shows <a href="https://www.sciencedirect.com/science/article/pii/S0014292120302555">this ban benefits customers</a>. </p>
<p>But the regulator suspects that, instead of using a contract, Amazon simply hides the businesses that undercut it from its site’s search results. <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/1910129AmazoneCommerceComplaintPublic.pdf">According to the suit</a>: “Using its vast surveillance network, Amazon systematically punishes sellers when Amazon detects a lower price on other online stores.”</p>
<p>So, to be able to include the Prime eligibility label – a guarantee of free delivery within one or two days to subscribers, which also improves visibility on the website – businesses must offer their products via Amazon fulfillment. This makes it much harder for them to sell from a competing platform – and if they did, their Amazon sales could suffer if they try to offer it at a lower price elsewhere. </p>
<p>As consumers, we see that Amazon offers the cheapest products and a wider range, so have no reason to shop somewhere else. We become lazy. If a shopping platform has a great range accompanied by helpful ratings and reviews from previous consumers, why would you even look somewhere else? Even more so if your site membership offers you free delivery. </p>
<p>But a well-functioning market relies on some consumers <a href="https://www.sciencedirect.com/science/article/pii/S0167718720300369">being savvy enough to look for the better deal</a>. If no one comparison shops, competition disappears and all consumers lose.</p>
<figure class="align-center ">
<img alt="A worker sorts Amazon packages on a conveyor belt in a warehouse." src="https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552135/original/file-20231004-23-q9fyb7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An Amazon fulfillment centre in Vélizy, France.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/france-sept-23th-2019-logistics-activity-1514808590">Frederic Legrand - Comeo/Shutterstock</a></span>
</figcaption>
</figure>
<h2>What do consumers want?</h2>
<p>The FTC wants to end all these practices because it believes they hurt consumers. It doesn’t want sellers to have to rely on Amazon logistics, and is pushing to ban the anti-discounting practices that it says block potential competitors. It also wants to make it easier for customers to end their Prime subscriptions.</p>
<p>But is this really what consumers want? Amazon’s practices lead to higher prices than if it was offering a better deal to small businesses, according to the FTC. But, being so big and having those massive warehouses and sophisticated logistics also serves a purpose: Amazon can dispatch a huge variety of products quickly at a reasonable cost. </p>
<p>The FTC will have to win its case in court – and this has proven <a href="https://www.bloomberg.com/news/articles/2023-07-24/ftc-s-khan-defends-merger-record-after-microsoft-activision-loss">particularly difficult</a> in its other recent cases. Earlier this year, it <a href="https://www.reuters.com/markets/deals/us-ftc-withdraws-case-against-microsoft-activision-deal-before-internal-agency-2023-07-20/#:%7E:text=WASHINGTON%2C%20July%2020%20(Reuters),O">failed to block</a> Microsoft’s US$68 billion deal to buy game-maker Activision. </p>
<p>The main challenge for the FTC this time will be to prove that the practices it identifies as harming consumers are more important than the potential cost for us all of losing the comfort and scale of the services offered by Amazon. Whether or not western consumers are still doing most of their online shopping on a single platform in 10 years time will depend heavily on what the US court decides.</p><img src="https://counter.theconversation.com/content/214669/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Renaud Foucart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If the competition regulator gets its way, it could force significant changes to the online shopping giant.Renaud Foucart, Senior Lecturer in Economics, Lancaster University Management School, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2108452023-09-19T12:15:41Z2023-09-19T12:15:41ZWhat are ‘mule addresses’? Criminologists explain how vacant properties serve as depots for illegal online purchases<figure><img src="https://images.theconversation.com/files/547613/original/file-20230911-20491-xdqy4.jpg?ixlib=rb-1.1.0&rect=261%2C186%2C8044%2C4794&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Nobody's home, just as the sender intended.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/delivery-of-parcel-boxes-at-doorstep-royalty-free-image/1173054988?adppopup=true">AndreyPopov/ iStock via Getty Images Plus</a></span></figcaption></figure><p>Online shopping isn’t just a convenient way to buy batteries, diapers, computers and other stuff without going to a brick-and-mortar store.</p>
<p>Many Americans also use the internet to quietly acquire illegal, fake and <a href="https://www.linkedin.com/posts/evidence-based-cybersecurity_appleproducts-darkweb-applemacbookpro-activity-7103440509360099329-8xZh?utm_source=share&utm_medium=member_desktop">stolen items</a>. <a href="https://www.linkedin.com/posts/simon-botton-754952208_cybersecurity-digitalsafety-onlinesecurity-ugcPost-7103370581508587520-1gdL?utm_source=share&utm_medium=member_desktop">Guns</a>, prescription drugs no doctor has ordered and <a href="https://theconversation.com/heists-worth-billions-an-investigation-found-criminal-gangs-using-sham-bank-accounts-and-secret-online-marketplaces-to-steal-from-almost-anyone-and-little-being-done-to-combat-the-fraud-206893">checks</a> are on this long list, as well as <a href="https://www.investopedia.com/terms/c/cloning.asp">cloned credit cards</a>, counterfeit passports and phony <a href="https://www.cbp.gov/newsroom/local-media-release/2-shipments-containing-4420-counterfeit-driver-s-licenses-seized-cbp">driver’s licenses</a>. </p>
<p>Because buyers and sellers alike realize that the authorities can detect illegal online transactions, criminals and their customers prefer covert online platforms that protect user anonymity, such as <a href="https://www.torproject.org/">Tor</a>, or encrypted messaging applications like <a href="https://scholarworks.gsu.edu/ebcs_articles/20/">Telegram and WhatsApp</a>. Buyers and sellers also use <a href="https://www.cognyte.com/blog/digital-wallet-cybercrime/">digital wallets</a> and <a href="https://knowledgehub.transparency.org/helpdesk/cryptocurrencies-corruption-and-organised-crime-implications-of-the-growing-use-of-cryptocurrencies-in-enabling-illicit-finance-and-corruption">cryptocurrencies to further conceal</a> their identities. </p>
<p>As <a href="https://ebcs.gsu.edu/">scholars of</a> <a href="https://scholar.google.com/citations?user=GqggT9MAAAAJ&hl=en&oi=sra">high-tech crime</a>, <a href="https://ebcs.gsu.edu/profile/saba-aslanzadeh/">we were eager</a> to solve a riddle. Having these items shipped to the buyers’ homes or offices would make it easy for authorities to catch them. So how do people who buy these illegal items maintain their anonymity when they take possession of items they purchased on the <a href="https://theconversation.com/illuminating-the-dark-web-105542">dark web</a>?</p>
<p>They mostly use <a href="https://www.reddit.com/r/scambait/comments/163ssd0/report_package_mule_address/">vacant residential properties, called “mule addresses</a>” or “<a href="https://seon.io/resources/dictionary/drop-address">drop addresses</a>.” Once the illegal goods or phony documents get delivered – presumably without the owners’ knowledge – to the doorstep of the uninhabited home, the buyer or a middleman picks it up. This practice makes it very hard to trace these transactions.</p>
<h2>Penchant for sharing</h2>
<p>To discover where these items change hands, we took advantage of the inclination of some of the criminal vendors to share images on Telegram of the parcels they send, along with the illicit items.</p>
<p>They use this strategy to build their reputations, earn the trust of buyers and market their services.</p>
<p>Not all users of online underground markets do this, but we still spotted thousands of packages delivered this way over a period of two years.</p>
<p>In one case, we found a photo of a forged or stolen check alongside the mailed envelope used for its delivery on a Telegram channel dedicated to trading stolen and counterfeit checks.</p>
<p>The label on the envelope bears not only the shipping date but also the Wyoming address where it was sent. Armed with this information, anyone can retrieve related details by searching online. We found an apartment complex at that address with several units for rent.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A mailed envelope and a check with names obscured" src="https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=640&fit=crop&dpr=1 600w, https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=640&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=640&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=805&fit=crop&dpr=1 754w, https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=805&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/548411/original/file-20230914-25-s9wiwb.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=805&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A forged or stolen check alongside the envelope used to mail it to the person who bought it on the dark web.</span>
<span class="attribution"><span class="source">Screen capture by David Maimon</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<h2>Guns, drugs and rentals</h2>
<p>We also found that criminal vendors use mule addresses as their sender address. In one example, we found a video, uploaded in April 2023, of an assault rifle shipped from an Arizona address. At the time, that property was for sale.</p>
<p>The video displays an assault rifle apparently shipped from that address after being purchased online on an underground gun market. At the time, that property was for sale.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An assault rifle and an address label" src="https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=339&fit=crop&dpr=1 600w, https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=339&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=339&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/548176/original/file-20230913-34250-eslwpf.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An illegal firearm vendor uploaded a video of an assault rifle being shipped to a customer.</span>
<span class="attribution"><span class="source">Screen capture by David Maimon, CC BY-NC-ND</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>We found a similar video documenting the punctual delivery of what we believe to be illegal drugs. Considering that the video has been circulating in illegal drugs markets that we monitor, it’s reasonable to assume that the package contains narcotics or prescription drugs.</p>
<p>The footage portrays a satisfied customer who has just gotten the drugs. We looked up the recipient’s address, which is discernible in the video.</p>
<p>It’s a property in North Las Vegas, Nevada, which was listed for sale at the time of delivery – although it seems to have later been sold. The anticipated delivery date, March 28, 2023, coincided with the day the package in the video was received. </p>
<p>One of the illegal digital marketplaces we identified is a hub for prescription sales of OxyContin, Viagra, Adderall and Valium. It’s linked to an administrator who presides over several Telegram channels. </p>
<p>The administrator has shared photos on those channels that allowed us to see tracking numbers associated with packages they’d mailed. By collating the tracking numbers from April 20 to May 23, 2023, we compiled a comprehensive database of those addresses and the statuses of those properties when the packages were delivered.</p>
<p>We found that 72% of the 650 deliveries in this database were to properties listed for sale, and the rest were to properties unoccupied for other reasons. The average time that elapsed between a property listing and an illicit package being delivered there was nine days.</p>
<h2>Be on guard</h2>
<p>We haven’t yet learned of any criminals who were convicted of criminally using mule addresses to deliver illegal packages. </p>
<p>Because criminals take advantage of vacant residential properties listed for sale or rent by unsuspecting homeowners to protect their anonymity, we believe that it’s important for landlords and people who are selling or renting homes to protect themselves from these crimes of commerce.</p>
<p>Some of the same strategies that enhance safety in other regards can help, such as installing surveillance cameras and employing property managers.</p><img src="https://counter.theconversation.com/content/210845/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Maimon receives funding from Department of Homeland Security and other private organizations. </span></em></p><p class="fine-print"><em><span>Saba Aslanzadeh does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Buyers and sellers alike use this system to not get caught.David Maimon, Professor of Criminal Justice and Criminology, Georgia State UniversitySaba Aslanzadeh, PhD Student in in Computer Science, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2124632023-09-05T20:06:24Z2023-09-05T20:06:24ZTemu: China’s answer to Amazon is already Australia’s most popular free app. What makes it so addictive?<figure><img src="https://images.theconversation.com/files/546308/original/file-20230905-15-1o8upa.jpg?ixlib=rb-1.1.0&rect=18%2C0%2C6081%2C4060&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>If you spend much time online you’ve probably seen one of Temu’s colourful ads – punctuated by its catchy tagline: “shopping like a billionaire”. </p>
<p>Temu specialises in selling various everyday items, including clothing, toys and household goods, for extremely low prices. Shanghai-based company PDD Holdings launched the online marketplace late last year (initially in the United States) to cater to overseas customers. </p>
<p>Since then, Temu’s reach has skyrocketed. The <a href="https://www.reuters.com/technology/chinese-owned-e-commerce-platform-temu-expands-europe-2023-04-25/">total value</a> of products sold went from US$3 million in September last year, to US$400 million <a href="https://www.statista.com/statistics/1399786/temu-monthly-gross-merchandise-value/">in April</a>. At the time of publishing this article, Temu was the most popular free iPhone app in the US, United Kingdom, Australia and Germany. </p>
<p>Why has Temu been such a massive success? It’s safe to say the platform has some winning strategies that keep consumers coming back. But beyond that, similar to other e-commerce platforms, using it isn’t entirely risk- or guilt-free. Here are some things to consider if you’re thinking of giving it a shot.</p>
<h2>What are Temu’s secrets to success?</h2>
<p><strong>1. Value</strong></p>
<p>Many Australians might associate “made in China” with cheap price tags and low quality. However, Temu’s consumers are beginning to view it as offering affordable products that <a href="https://www.abc.net.au/news/2023-08-29/temu-may-save-china-status-as-world-factory-amid-deflation/102724900">do not necessarily compromise on quality</a>. In some cases, 10–20 products will only set <a href="https://www.business2community.com/tech-news/spending-on-temu-continues-to-skyrocket-beating-out-shein-by-20-in-may-02707455">you back US$20–30</a>.</p>
<p>Temu claims it can offer these prices as a result of cutting out the middlemen in the supply chain. While the manufacturers provide the product details and the products themselves, Temu handles everything else – from customs processing to international shipping. This streamlining helps reduce unit costs.</p>
<p>Nonetheless, achieving such value doesn’t come without a cost. Concerns are rising that Temu and its suppliers may be <a href="https://www.wired.co.uk/article/temu-is-losing-millions-of-dollars-to-send-you-cheap-socks">operating at a loss</a>. However, it’s common for startups to experience negative cash flow <a href="https://www.researchgate.net/publication/309770487_Score_model_for_technology_appraisal_of_Bulgarian_start-ups">in their initial years</a> due to heavy marketing investments, including offers of competitive prices and marketing campaigns – all of which is done to build brand awareness and gain acceptance.</p>
<p>This is especially true in the fast-paced e-commerce sector, where success and failure happen swiftly. Temu and its suppliers, who are mainly from Temu’s sister <a href="https://www.prnewswire.com/news-releases/temu-taps-on-sister-e-commerce-platform-supply-chain-to-offer-irresistible-prices-301623014.html">e-commerce platform Pinduoduo</a>, are likely aware of this dynamic.</p>
<p><strong>2. An effective marketing strategy</strong></p>
<p>Unlike other e-commerce platforms that focus on functional benefits such as saving money, Temu caters to consumers’ emotional needs. It overlays the shopping experience with the idea of “shopping like a billionaire” – which also aligns with its value-based strategy.</p>
<p>Temu entered the market at a time when consumers were grappling with global inflation, leading them to seek “value”. In the first month after its launch in the US, Temu invested some US$200 million <a href="https://www.chinatalk.nl/temu-update-june-2023-part-1-from-0-to-400-million-monthly-gmv-in-8-months/">in advertising</a> and planned a US$2 billion budget <a href="https://medium.com/@keshi201109/what-did-temu-do-right-6b31d6e2372f">for the year</a>. </p>
<p>Given China’s leadership in live-streaming <a href="https://eprints.qut.edu.au/235249/">influencer marketing</a>, Temu is now <a href="https://talkleisure.com/how-to-become-a-temu-influencer/#Does_Temu_Use_Influencer_Marketing">recruiting social media influencers</a>, suggesting it might leverage its Chinese expertise to explore a social-commerce strategy. Social commerce harnesses a sense of “friendship” conveyed by influencers, making the online shopping experience more engaging and product recommendations more convincing. It also works especially well with sales promotions.</p>
<h2>Sales promotion tactics</h2>
<p>While Temu employs common sales tactics seen on other e-commerce platforms, it uses what is arguably the broadest array of these techniques. Here are just some examples:</p>
<ul>
<li><strong>Gamified experiences.</strong> Gamified advertising hinges on two core elements: challenge and reward. Interacting with Temu’s spinning wheel is a minor challenge, but the substantial discount offered is a major reward. Such “games” create the illusion of getting lucky, and therefore generate positive emotions <a href="https://eprints.qut.edu.au/242174/">in consumers</a> – while the reward gives them an incentive to engage more seriously with their browsing, increasing the likelihood of spending.</li>
</ul>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=593&fit=crop&dpr=1 600w, https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=593&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=593&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=746&fit=crop&dpr=1 754w, https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=746&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/546305/original/file-20230905-19-quus11.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=746&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Temu’s spinning wheel promotion offers a ‘gamified’ shopping experience that creates an illusion of getting lucky.</span>
<span class="attribution"><span class="source">Shasha Wang</span></span>
</figcaption>
</figure>
<ul>
<li><strong>Lightning deals and limited-time offers.</strong> One commonly used promotion tactic involves creating the illusion of scarcity through supposedly “exclusive” offers that are time-sensitive and won’t come by again. This can trigger a fear of missing out in consumers.</li>
</ul>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=603&fit=crop&dpr=1 600w, https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=603&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=603&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=757&fit=crop&dpr=1 754w, https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=757&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/546307/original/file-20230905-27-33dilf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=757&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Promotions that are timed create a sense of urgency; customers are more likely to pay up if they’re scared of missing out.</span>
<span class="attribution"><span class="source">Shasha Wang</span></span>
</figcaption>
</figure>
<ul>
<li><p><strong>Discounts and free shipping</strong> Offering simple price reductions and very affordable sales is a time-honoured way of securing a loyal customer base. In addition, Temu has the allure of offering free shipping on orders with a very low minimum spend.</p></li>
<li><p><strong>Loyalty program</strong>. Consumers can opt in to Temu’s marketing emails in exchange for receiving more promotional content, including email-only promotions. E-commerce companies often have access to your personal information (such as your name, address, age and phone number) and behavioural data (such as from your search history and online sessions). With this data, the company can build your user profile and target you with <a href="https://link.springer.com/article/10.1007/s11747-020-00719-1">personalised promotions and content</a> to encourage spending. </p></li>
<li><p><strong>Search engine marketing.</strong> Many consumers will see Temu ads at the top of their search results on Google (in the form of “sponsored” posts) when they search for a product. </p></li>
<li><p><strong>An AI-powered promotional strategy</strong>. Temu’s sister company operating in China, Pinduoduo, is renowned for its <a href="https://a16z.com/2023/01/18/what-is-temu/">AI-driven recommendation</a> system. It’s likely Temu uses similar AI algorithms, drawing on users’ browsing and purchase history to provide personalised recommendations (a practice <a href="https://fortune.com/2018/06/26/artificial-intelligence-video-ads-augmented-reality/">Amazon</a> also partakes in). </p></li>
</ul>
<h2>Defending against manipulation</h2>
<p>Temu’s greatest benefit to consumers lies in its offer of value. It may still have lower-quality items, but this is common among all e-commerce platforms. </p>
<p>Also, Temu’s business model is built around emphasising top-selling products, which helps filter out low-quality products. Its 90-day free return policy further acts as a buffer for unsatisfactory purchases.</p>
<p>Nonetheless, Temu’s value-oriented approach may not be a good thing for consumers on all fronts. Exposed to such a wide array of marketing tactics, users might become more prone to overconsumption – which leads to environmental waste and post-purchase regret.</p>
<p>It’s worth considering your actual needs before using an e-commerce platform such as Temu. You should also familiarise yourself with the sales promotion tactics being used. Research <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/mar.21266">suggests</a> understanding these tactics, as well as advertisers’ intentions, can even empower young children to be sceptical and form a cognitive defence against them. </p>
<p>Also, in light of Temu’s gamified advertising strategy, consumers ought to temper their enthusiasm for rewards. Moving forward, one useful approach may be for schools and governments to introduce educational programs or social marketing campaigns that teach advertising tactics, and recommend coping strategies.</p>
<p><em>Temu didn’t respond to The Conversation’s request for comment.</em></p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/blind-bags-how-toy-makers-are-making-a-fortune-with-child-gambling-127229">Blind bags: how toy makers are making a fortune with child gambling</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/212463/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Xiaoling Guo receives funding from Australian Government Research Training Program (RTP) Scholarship. </span></em></p><p class="fine-print"><em><span>Shasha Wang does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While Temu employs common sales promotion tactics seen on other e-commerce platforms, it uses what is arguably the broadest range of these techniques.Shasha Wang, Senior lecturer, Queensland University of TechnologyXiaoling Guo, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2104312023-07-25T21:12:18Z2023-07-25T21:12:18ZUPS and Teamsters agree on new contract, averting costly strike that could have delayed deliveries for consumers and retailers<figure><img src="https://images.theconversation.com/files/539360/original/file-20230725-15-oa13ub.jpg?ixlib=rb-1.1.0&rect=80%2C359%2C2892%2C1612&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Teamsters employed by UPS practiced holding rallies ahead of the strike that wasn't.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLabor/9040f6dc60c648d4b1690781df068879/photo?Query=UPS&mediaType=photo,video,graphic,audio&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=25001&currentItemNo=4">AP Photo/Damian Dovarganes</a></span></figcaption></figure><p><em>The International Brotherhood of Teamsters union and UPS have <a href="https://apnews.com/article/ups-teamsters-strike-labor-logistics-delivery-a94482dbff7bfb67ad82f607ab127672">agreed on a new five-year contract</a> that boosts wages and guarantees more air conditioning in drivers’ trucks. The deal, struck on July 25, 2023, came <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">one week before an Aug. 1 deadline</a> that the Teamsters had set for the threatened strike – which <a href="https://doi.org/10.1177/0160449X9902400106">would have been the first by UPS workers since 1997</a>. The union announced on Aug. 22 that <a href="https://teamster.org/2023/08/teamsters-ratify-historic-ups-contract/">86.3% of its members had voted to approve</a> the contract, <a href="https://apnews.com/article/ups-teamsters-contract-union-voting-b104ca459ddb810f2018c68046d063ed">ratifying it</a>.</em></p>
<p><em>The Conversation asked <a href="https://scholar.google.com/citations?user=g_BdG-cAAAAJ&hl=en&oi=ao">Jason Miller</a>, a supply chain scholar at Michigan State University, to explain what happened and to sum up the significance of this deal, which is keeping 300,000 workers on the job.</em></p>
<figure class="align-center ">
<img alt="A uniformed employee sits in the driver's seat of a truck with UPS written on the side." src="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Millions of Americans depend on UPS drivers to deliver their packages.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/8d7eac1a06f94afc932a2cecab27a173/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=28">AP Photo/Michael Dwyer</a></span>
</figcaption>
</figure>
<h2>What’s in this contract?</h2>
<p>UPS has agreed to:</p>
<ol>
<li><p>Increase <a href="https://apnews.com/article/ups-teamsters-strike-labor-logistics-delivery-a94482dbff7bfb67ad82f607ab127672">starting hourly pay for part-time workers to US$21</a>, up from $16.20.</p></li>
<li><p>Raise the hourly pay of existing part-time and full-time workers by <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">$2.75 in 2023 and $7.50 more</a> over the next five years.</p></li>
<li><p>Make <a href="https://nmaahc.si.edu/explore/stories/15-year-battle-martin-luther-king-jr-day">Martin Luther King Jr. Day</a>, the third Monday of January, a paid holiday.</p></li>
<li><p>Stop requiring UPS employees to work <a href="https://apnews.com/article/ups-strike-labor-contract-teamsters-3438edf86cb006a1685e29822399a4d9">overtime hours on their days off</a>.</p></li>
<li><p>Add fans and install <a href="https://teamster.org/2023/06/teamsters-secure-air-conditioning-for-ups-fleet-in-major-tentative-deal/">air conditioning in many trucks</a> to improve cooling.</p></li>
<li><p>Create another <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">7,500 full-time Teamster jobs</a> and <a href="https://teamster.org/2023/07/weve-changed-the-game-teamsters-win-historic-ups-contract/">fill 22,500 open positions</a>.</p></li>
</ol>
<p>Teamsters General President <a href="https://www.wsj.com/articles/ups-teamsters-reach-agreement-on-new-contract-a134c910">Sean O'Brien hailed the agreement as a victory</a>. “This contract sets a new standard in the labor movement and raises the bar for all workers,” he said.</p>
<h2>What does this deal say about the supply chain and labor?</h2>
<p>This deal further reinforces the strong bargaining position of unions representing workers in the logistics sector – not just in the U.S. but also in <a href="https://www.joc.com/article/western-canada-port-strike-ends-after-deal-reached-tentative-four-year-contract_20230713.html">Canada</a>, <a href="https://www.freightwaves.com/news/breaking-ups-teamsters-reach-tentative-contract">Europe</a> and elsewhere.</p>
<p>U.S. shipping could still be disrupted amid one of the <a href="https://fred.stlouisfed.org/series/U6RATE">tightest labor markets in decades</a>, since UPS rival <a href="https://www.cnn.com/2023/07/24/business/fedex-pilots-union-vote/index.html">FedEx recently had its 5,200</a> <a href="https://www.freightwaves.com/news/fedex-pilots-reject-new-labor-deal">pilots reject a new labor agreement</a>.</p>
<p>That said, TForce Freight – formerly UPS Freight – reached its own new five-year contract with the Teamsters <a href="https://www.freightwaves.com/news/tforce-teamsters-reach-tentative-5-year-contract">earlier in July</a>, as did competitor <a href="https://www.freightwaves.com/news/teamsters-at-abf-freight-ratify-new-labor-deal">ABF Freight</a>. Unionized pilots at <a href="https://www.cnbc.com/2023/03/01/delta-pilots-new-contract-big-raises.html">Delta Airlines</a> and <a href="https://www.cnbc.com/2023/05/19/american-airlines-pilots-reach-preliminary-labor-agreement-.html">American Airlines</a> also recently agreed to new contracts with large raises – a 34% boost, in Delta’s case. </p>
<p>My view is that UPS was more willing to accept the Teamsters’ demands because current economic conditions favor labor. In addition, the company realized that a strike could have cost it substantial market share, up to <a href="https://www.freightwaves.com/news/consultant-strike-could-cost-ups-30-of-diverted-volume">30% of volume by one estimate</a>. Combined with the company’s <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-23-000006/0001090727-23-000006.pdf">recent high profits</a>, it was not in UPS management’s interests to let a strike proceed. </p>
<h2>What would have happened had there been a strike?</h2>
<p>Roughly 57.3% of the packages UPS delivers <a href="https://www.freightwaves.com/news/tough-quarter-starts-the-year-for-ups">are shipped straight to consumers</a>. The rest go to retailers and other businesses.</p>
<p>Based on <a href="https://scholar.google.com/citations?hl=en&user=g_BdG-cAAAAJ">my years of researching</a> transportation operations and supply chain disruptions, the impact of a UPS strike would have stretched far beyond delayed delivery of everything from pet food to tennis rackets that U.S. consumers buy online.</p>
<p>A UPS strike could have disrupted the availability of <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">spare parts for cars</a> and <a href="https://www.npr.org/2023/07/12/1187354600/ups-workers-could-be-on-course-for-a-historic-strike-within-weeks">wholesale medical supplies</a>, just to name a few essentials. Consumers would also have found it harder to get clothing and shoes in stores, as retail locations are typically replenished by parcel carriers. </p>
<p>Even a 10-day strike could have <a href="https://www.cnn.com/2023/07/14/economy/ups-strike-economic-impact/index.html">cost the U.S. economy an estimated $7.1 billion</a>, according to research firm <a href="https://www.andersoneconomicgroup.com/potential-ups-strike-could-be-costliest-in-a-century/">Anderson Economic Group</a>. That would have made it potentially the costliest strike in U.S. history. These costs stem from the 340,000 striking workers losing an estimated $1.1 billion in wages and UPS losing $816 million in earnings. The balance of this estimate would result from the disruptions incurred by UPS customers. </p>
<p><em>This article was updated on Aug. 22, 2023. Portions of it appeared in a prior article published on <a href="https://theconversation.com/ups-impasse-with-union-could-deliver-a-costly-strike-disrupting-brick-and-mortar-businesses-as-well-as-e-commerce-209819">July 20, 2023</a>.</em></p><img src="https://counter.theconversation.com/content/210431/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Miller does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The strike would have been the first for the parcel delivery giant since 1997.Jason Miller, Associate Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2098192023-07-20T12:31:46Z2023-07-20T12:31:46ZUPS impasse with union could deliver a costly strike, disrupting brick-and-mortar businesses as well as e-commerce<figure><img src="https://images.theconversation.com/files/538363/original/file-20230719-19-vsufa7.jpg?ixlib=rb-1.1.0&rect=16%2C0%2C5514%2C3689&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Placards are part and parcel of a protest.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/80443caf79fb48a894d4acfd6de53333/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=7">AP Photo/Brittainy Newman</a></span></figcaption></figure><p><em>Talks between the International Brotherhood of Teamsters and UPS over a new contract <a href="https://www.cnn.com/2023/07/05/business/ups-teamsters-negotiations/index.html">fell apart on July 5, 2023</a>. The union and the shipping and logistics company are <a href="https://www.freightwaves.com/news/ups-teamsters-talks-collapse">blaming each other for the collapse</a>, which occurred a few weeks after <a href="https://teamster.org/2023/06/teamsters-authorize-strike-at-ups/">97% of UPS’s Teamsters voted to strike</a> if the Teamsters and UPS don’t reach an agreement by midnight on July 31.</em></p>
<p><em>Without a deal in place, <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">more than 300,000 Teamsters will stop working</a> on Aug. 1. It would mark the delivery service’s <a href="https://doi.org/10.1177/0160449X9902400106">first strike since 1997</a>.</em></p>
<p><em>The Conversation asked <a href="https://scholar.google.com/citations?user=g_BdG-cAAAAJ&hl=en&oi=ao">Jason Miller</a>, a supply chain scholar at Michigan State University, to explain how likely it is that this will happen and what to expect if it does.</em></p>
<figure class="align-center ">
<img alt="A uniformed employee sits in the driver's seat of a truck with UPS written on the side." src="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/538368/original/file-20230719-25-2rc536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Upward of 300,000 employees could take part in a strike.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UPSLaborTalks/8d7eac1a06f94afc932a2cecab27a173/photo?Query=UPS%20teamsters&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=67&currentItemNo=28">AP Photo/Michael Dwyer</a></span>
</figcaption>
</figure>
<h2>What are the reasons for this impending strike?</h2>
<p>Before the talks collapsed, both sides had been negotiating extensively on a new five-year agreement that <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">would cover about 340,000 unionized UPS workers</a>.</p>
<p><a href="https://www.fleetowner.com/operations/article/21269359/freightmarket-ripples-ahead-of-possible-ups-strike">The delivery company has agreed to some of the Teamsters’ demands</a>, pledging to:</p>
<ol>
<li><p>End a two-tiered wage system in which part-time workers earn an average of about US$5 per hour less than full-time workers;</p></li>
<li><p>Make <a href="https://nmaahc.si.edu/explore/stories/15-year-battle-martin-luther-king-jr-day">Martin Luther King Jr. Day</a>, the third Monday of January, a paid holiday;</p></li>
<li><p>Stop requiring UPS employees to work <a href="https://apnews.com/article/ups-strike-labor-contract-teamsters-3438edf86cb006a1685e29822399a4d9">overtime hours on their days off</a>;</p></li>
<li><p>Add fans and install <a href="https://teamster.org/2023/06/teamsters-secure-air-conditioning-for-ups-fleet-in-major-tentative-deal/">air conditioning in many trucks</a> to improve cooling.</p></li>
</ol>
<p>The primary remaining sticking points concern <a href="https://twitter.com/CNBCOvertime/status/1678505073641390080?">part-time workers</a>. The Teamsters dispute UPS’s claim that part-time workers earn an average of $20 per hour. Teamsters President Sean O’Brien instead says they’re paid “<a href="https://twitter.com/Teamsters/status/1678799645336543233">poverty wages</a>.”</p>
<p>The Teamsters further want part-time workers to have earlier access to health insurance coverage and pension plans and a clearer pathway to full-time employment. The union also seeks to resolve safety and health concerns and “better pay for all workers,” as well as obtaining “<a href="https://teamster.org/2023/06/ups-pleads-to-keep-bargaining-with-more-money-teamsters-demand-more-progress/">stronger protections against managerial harassment</a>.”</p>
<p>The impasse comes after two years in which UPS posted record profits. The company cleared <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-23-000006/0001090727-23-000006.pdf">$12.9 billion and $11.5 billion</a>, respectively, in 2021 and 2022. The company <a href="https://investors.ups.com/sec-filings/annual-filings/content/0001090727-20-000005/0001090727-20-000005.pdf">nearly tripled its net income</a> from the levels seen in 2018 and 2019 of $4.8 billion and $4.4 billion.</p>
<p>The Teamsters argue that these record profits mean <a href="https://teamster.org/2023/07/after-marathon-sessions-ups-negotiations-collapse/">UPS can afford to pay higher wages</a>.</p>
<h2>What should consumers expect?</h2>
<p>If unionized UPS workers do go on strike, many U.S. consumers will surely fear delays in the delivery of their online purchases. In my view, that’s a reasonable concern, given that <a href="https://www.nytimes.com/2023/07/07/business/ups-strike-retail-shippers.html">UPS handles roughly 25%</a> of all U.S. package deliveries. </p>
<p>The <a href="http://www.cnn.com/US/9708/20/ups.update.early/">1997 strike, which lasted 16 days</a>, took place when e-commerce was in its infancy. The Census Bureau only began to track that slice of the economy in 1999, when <a href="https://fred.stlouisfed.org/series/ECOMPCTSA">online shopping amounted to about 0.6% of all retail sales</a>. Today, consumers spend about 15% of their shopping dollars on e-commerce purchases.</p>
<p>If a strike were to happen, UPS competitors, including FexEx Ground and the United States Postal Service, <a href="https://www.linkedin.com/posts/jason-miller-32110325_supplychain-supplychainmanagement-ecommerce-activity-7084504099454390272-3iwR?utm_source=share&utm_medium=member_desktop">would likely be able to handle about 20%</a> of UPS’s deliveries because the industry currently has some excess capacity. </p>
<p>That’s due to delivery <a href="https://data.bls.gov/timeseries/CES4349200007?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true">workers clocking fewer hours per week</a> today compared to the height of the COVID-19 pandemic. <a href="https://data.bls.gov/timeseries/CES4349200034?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true">Parcel delivery demand peaked in 2021</a>, when millions of Americans were still social distancing. </p>
<p>If a prolonged strike happens, UPS could lose up to <a href="https://www.freightwaves.com/news/consultant-strike-could-cost-ups-30-of-diverted-volume">30% of its business</a>, experts warn, as <a href="https://www.freightwaves.com/news/fedex-advises-ups-shippers-to-get-on-board-now">customers switch to rival services</a>.</p>
<p>The risk of losing market share is leading many industry experts to believe that if a strike were to occur, <a href="https://www.fleetowner.com/operations/article/21269359/freightmarket-ripples-ahead-of-possible-ups-strike">it wouldn’t last long</a>.</p>
<h2>What about businesses?</h2>
<p>Roughly 57.3% of the packages UPS delivers <a href="https://www.freightwaves.com/news/tough-quarter-starts-the-year-for-ups">are shipped straight to consumers</a>. The rest go to retailers and other businesses.</p>
<p>Based on <a href="https://scholar.google.com/citations?hl=en&user=g_BdG-cAAAAJ">my years of researching</a> transportation operations and supply chain disruptions, I believe Americans should recognize that the impact of a UPS strike would stretch far beyond delayed delivery of everything from pet food to tennis rackets that they buy online.</p>
<p>A UPS strike could disrupt the availability of <a href="https://www.usatoday.com/story/money/2023/07/11/ups-strike-2023-impact/70400086007/">spare parts for cars</a> and <a href="https://www.npr.org/2023/07/12/1187354600/ups-workers-could-be-on-course-for-a-historic-strike-within-weeks">wholesale medical supplies</a>, just to name a few essentials. Consumers will also find it harder to get clothing and shoes in stores, as retail locations are typically replenished by parcel carriers. </p>
<p>The supply chain for manufacturing computer and electronics products would probably be disrupted too, according to <a href="https://www.census.gov/data/datasets/2017/econ/cfs/historical-datasets.html">my analysis of data</a> from the Census Bureau and the Bureau of Transportation Statistics that <a href="https://www2.census.gov/programs-surveys/cfs/technical-documentation/methodology/2017cfsmethodology.pdf">tracks how different industries transport products to their customers</a>. Farmers and construction companies trying to get spare parts for heavy equipment would see delays in those shipments, which might result in downtime that costs tens if not hundreds of thousands of dollars.</p>
<p>Consequently, a strike would leave many businesses scrambling to fulfill customers’ orders, which may force them to spend more money on higher-priced air freight shipping. </p>
<p>Even a 10-day strike could <a href="https://www.cnn.com/2023/07/14/economy/ups-strike-economic-impact/index.html">cost the U.S. economy an estimated $7.1 billion</a> , according to <a href="https://www.andersoneconomicgroup.com/potential-ups-strike-could-be-costliest-in-a-century/">Anderson Economic Group</a> – a research firm – making it potentially the costliest strike in U.S. history. These costs stem from the 340,000 striking workers losing an estimated $1.1 billion in wages and UPS losing $816 million in earnings. The balance of this estimate would result from the disruptions incurred by UPS customers. </p>
<h2>What do you think will happen?</h2>
<p>Unlike the threatened <a href="https://theconversation.com/railroads-and-unions-reach-deal-to-avert-devastating-strike-keeping-americas-trains-and-the-economy-on-track-for-now-190600">railroad strikes of 2022</a>, there is no system in place for the federal government to prevent a UPS strike. On that occasion, Congress had the option of intervening, but a deal was reached before the government had to step in.</p>
<p>However, it seems likely that there <a href="https://apnews.com/article/ups-strike-teamsters-biden-delivery-cb586d2f6160a92cda9318d6290ac8ea">will be calls for the White House</a> to get both parties back to the negotiating table.</p>
<p>Given that both the Teamsters and UPS have an incentive to not see the company lose customers to rival shipping operations, I believe that they may reach a deal soon enough to avoid a costly and disruptive strike. Consistent with this, UPS announced on July 19, 2023, that it and the Teamsters will <a href="https://www.freightwaves.com/news/ups-teamsters-to-return-to-table">return to the negotiating table</a> before their July 31 deadline.</p><img src="https://counter.theconversation.com/content/209819/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Miller does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Talks between the the International Brotherhood of Teamsters and company bosses have broken down. A supply chain expert explores what could happen next.Jason Miller, Associate Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2061642023-07-19T12:23:14Z2023-07-19T12:23:14ZJust in time for back-to-school shopping: How retailers can alter customer behavior to encourage more sustainable returns<figure><img src="https://images.theconversation.com/files/537504/original/file-20230714-29-iem14i.jpg?ixlib=rb-1.1.0&rect=62%2C0%2C2726%2C1818&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Retail returns have become big business for UPS.
</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/EarnsUPS/9fd54604385d4aa0b1122e018b5323da/photo">AP Photo/Toby Talbot</a></span></figcaption></figure><p>Back-to-school sales are underway, and people across the country will be shopping online to fill up backpacks, lockers and closets – and they’ll be taking advantage of free returns.</p>
<p>Making it easy for customers to return items at no cost started as a retail strategy to <a href="https://www.theatlantic.com/technology/archive/2023/05/free-online-shopping-returns-retailer-policy-changes/673975/">entice more people to shop online</a>. But it’s getting expensive, for <a href="https://theconversation.com/inside-the-black-box-of-amazon-returns-206551">both retailers and the planet</a>.</p>
<p>In 2022, retail returns added up to more than <a href="https://nrf.com/research/2022-consumer-returns-retail-industry">US$800 billion in lost sales</a>. The <a href="https://theconversation.com/inside-the-black-box-of-amazon-returns-206551">transportation, labor, and logistics</a> involved raised retailers’ costs even higher. Product returns also increase pollution, greenhouse gas emissions and waste in landfills, where many returned products now end up.</p>
<p>So how can retailers fix this problem and still provide quality customer service?</p>
<p><a href="https://scholar.google.com/citations?user=bqBiAJQAAAAJ&hl=en">We conduct</a> <a href="https://www.ivybusiness.iastate.edu/directory/cfaires/">research</a> in reverse logistics, focusing primarily on the intersection of retail returns and customer behavior. Here are some insights that can help <a href="https://www.retailtouchpoints.com/topics/customer-experience/how-retailers-can-minimize-returns-focus-on-convenience-communication-and-personalization">reduce the abuse of free returns</a> and lower costs without losing quality.</p>
<p><iframe id="V7yOA" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/V7yOA/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Nudging: In-store vs. shipped returns</h2>
<p>Where a product is returned makes a difference. Items returned to the store can be restocked an average of 12 to 16 days faster than those that are mailed. Mailed returns also cost companies more: The difference between the most expensive shipped returns and least expensive in-store returns is <a href="https://www.mckinsey.com/industries/retail/our-insights/returning-to-order-improving-returns-management-for-apparel-companies">$5 to $6</a> per item. That adds up quickly.</p>
<p>Studies show that customers may be willing to change their return behavior – <a href="https://thehill.com/opinion/energy-environment/3890170-moving-the-needle-on-supply-chain-sustainability/">with a little help</a>.</p>
<p><a href="https://www.thedrum.com/opinion/2023/02/23/how-brands-can-nudge-consumers-positive-behavior-change-sustainability">Behavioral nudges</a> are a technique used in decision-making to steer a person toward a specific behavior. Putting candy at eye-level at the grocery store checkout counter to encourage impulse purchases is an example, or making employee participation in a <a href="https://news.uchicago.edu/explainer/what-is-behavioral-economics#nudge">401(k) savings program the default</a> option. Another type of nudge involves <a href="https://doi.org/10.1016/j.jeem.2018.06.009">providing more information</a>.</p>
<p>If you’ve ever shopped online and seen statements like “10 out of 10 customers recommend this product” or “Only 2 items left in stock,” you have experienced the use of information to influence your decision. Nudges emphasizing sustainability may also appeal to customers and have a positive impact on return behavior.</p>
<figure class="align-center ">
<img alt="A man hands a slip of paper to a woman a returns desk at Saks Fifth Avenue." src="https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537505/original/file-20230714-23-j763kq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Returning items to a store can avoid extra transportation, shipping and packaging, saving money and avoiding waste and emissions.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakNewYork/a1f251980fd140dbb26a82fa97746807/photo">AP Photo/Mark Lennihan</a></span>
</figcaption>
</figure>
<p>In a recent survey, 94% of merchants said customers were concerned about sustainability, according to a <a href="https://happyreturns.com/merchant-survey-2023">report from Happy Returns</a>, a logistics firm that works with retailers.</p>
<p>However, a much lower percentage of customers actually make sustainable return decisions. That suggests that customers do not fully understand the environmental impact of their return choices – and it offers a way for retailers to help.</p>
<p>Our research found that when customers were given information about the environmental impact of the different return options, they were nearly 17 times more likely to choose an in-store return rather than returning an item by mail. Nudges like this offer a simple and inexpensive way for retailers to alter customer behavior in favor of sustainability.</p>
<h2>Picking up returns to speed up the process</h2>
<p>Some customers request to return an item but then wait weeks before mailing it. It’s known as customer procrastination, and it also has a cost. The longer these products remain unprocessed, <a href="https://wwd.com/business-news/business-features/innovation-in-online-returns-why-online-merchants-are-embracing-box-free-returns-as-the-new-default-return-method-1235197019/">the more value they can lose</a>.</p>
<p>High-priced electronics, such as laptops and tablets, have short product life cycles and lose value quickly, sometimes at a rate of 1% per week. Seasonal items, such as back-to-school supplies or winter coats, become more difficult to resell if retailers get them back on shelves after demand has bottomed out. A returned item’s resale value <a href="https://www.wsj.com/articles/what-stores-do-with-90-billion-in-merchandise-returns-1518777000">determines its destination</a>: It can end up back on store shelves, sold to liquidators for pennies on the dollar or sent to a landfill.</p>
<figure class="align-center ">
<img alt="A worker carries an Amazon box as another checks over a box and address." src="https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537506/original/file-20230714-17-ha7ae5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Transportation is a large expense for retail returns, for both companies and the planet.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/EarnsUPS/fcdaf7a62f184d56bd7ac52aa069d83d/photo">AP Photo/Mark Lennihan</a></span>
</figcaption>
</figure>
<p>A home pickup service for time-sensitive returns could reduce delays in a way that is also useful to the customer. A small number of pickup vehicles collecting returns from customers could avoid multiple shipments, <a href="https://chainstoreage.com/survey-returns-cost-online-retailers-21-order-value">reducing total miles traveled</a> and cutting vehicle emissions, while also avoiding the need for each return to be individually packaged.</p>
<p>Our research found that a pickup service could help retailers collect returns faster and reduce product value loss, particularly for high-priced products and products that lose value quickly, such as consumer electronics.</p>
<h2>How to change policies without losing customers</h2>
<p>While several retailers have <a href="https://www.theatlantic.com/technology/archive/2023/05/free-online-shopping-returns-retailer-policy-changes/673975/">stopped offering free returns</a> or changed their return policies over the past year, our research suggests that changes affecting all customers might not be the best choice.</p>
<p>Broad policy changes that affect everyone might involve limiting the number of returns per customer, charging a fee for returns or shortening the window for returns. An alternative is a targeted return policy that applies only to people who abuse the system. For example, retailers can restrict free returns for people who repeatedly buy more items than they intend to keep, knowing they can return the rest.</p>
<figure class="align-center ">
<img alt="A woman standing a computer terminal checks boxes on an assembly line." src="https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=486&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=486&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537507/original/file-20230714-25-ahjkkr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=486&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Offering free returns carries a cost for retailers, but ending return policies can also turn off customers.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/woman-works-at-a-distrubiton-station-at-the-855-000-square-news-photo/1124819753">Johannes Eisele / AFP via Getty Images</a></span>
</figcaption>
</figure>
<p><a href="https://doi.org/10.1016/j.jbusres.2022.07.011">We conducted two studies</a> to explore how customers would view changes to a retailer’s return policies.</p>
<p>In the first study, 460 participants were significantly more likely to speak negatively about the retailer – a fictitious company, in this case – when the retailer’s returns policy change applied to everyone and affected everyone equally.</p>
<p>Our follow-up study asked 100 online customers about their thoughts regarding generalized versus targeted policy changes. When the return policy change targeted customers who abused returns, 44% of the participants expressed positive emotions, and only 13% expressed negative emotions.</p>
<p>Those positive emotions included comments like, “I would feel proud of the company for taking action against people who try to cheat the system.” Such responses indicated that participants understood that cheaters were increasing the price paid by everyone. </p>
<p>But when the return policy change applied to everyone, 64% of the participants expressed negative emotions. Nearly half indicated they would speak negatively about the policy change to family and friends, and 42% said they would shop at another store.</p>
<h2>Other ways to help customers make better decisions</h2>
<p>Retailers can also change the online shopping experience before the customer makes a purchase <a href="https://www.insiderintelligence.com/content/6-creative-ways-retailers-prevent-returns">to avoid the need for returns</a>.</p>
<p>One way is to obtain detailed <a href="https://www.zenstores.com/tutorials/prevent-returns-your-online-shop/">customer feedback</a> on returns and use that to provide better product descriptions to customers. Another is to avoid incentivizing the wrong behavior. Well-intentioned <a href="https://www.insiderintelligence.com/content/6-creative-ways-retailers-prevent-returns">free shipping on orders over a set dollar amount</a> could encourage customers to overpurchase and later return products.</p>
<p>Posting videos of items for sale can help buyers spot problems that photos might hide. <a href="https://www.news.iastate.edu/news/2023/04/13/virtual-fitting-rooms">Virtual fitting rooms</a> that use an avatar of the customer to try on clothes virtually can help customers choose the right size the first time.</p>
<p>There is no doubt that managing retail returns is a <a href="https://www.mckinsey.com/industries/retail/our-insights/returning-to-order-improving-returns-management-for-apparel-companies">difficult task</a>. To make the process more sustainable, retailers need to help customers make choices that limit the need for a return or that minimize the impact of a return on the environment and, of course, the retailer’s bottom line.</p><img src="https://counter.theconversation.com/content/206164/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Returns cost companies billions of dollars in lost sales. They also generate emissions and packaging waste. Two logistics experts offer some tips from psychology for more sustainable returns.Christopher Faires, Postdoctoral Researcher in Supply Chain Management, Iowa State UniversityRobert Overstreet, Assistant Professor of Supply Chain Management, Iowa State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2065512023-06-14T12:34:08Z2023-06-14T12:34:08ZInside the black box of Amazon returns<figure><img src="https://images.theconversation.com/files/531778/original/file-20230613-29-we8jk3.jpg?ixlib=rb-1.1.0&rect=303%2C54%2C4888%2C2997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Retailers' costs for managing returns are rising.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/september-2020-saxony-anhalt-osterweddingen-parcels-are-news-photo/1229199382">Ronny Hartmann/picture alliance via Getty Images</a></span></figcaption></figure><p>E-commerce may make shopping more convenient, but it has a dark side that most consumers never see.</p>
<p>Say you order an electric toothbrush and two shirts for yourself during a sale on Amazon. You unpack your order and discover that the electric toothbrush won’t charge and only one shirt fits you. So, you decide to return the unwanted shirt and the electric toothbrush.</p>
<p>Returns like this might seem simple, and often they’re free for the consumer. But managing those returns can get costly for retailers, so much so that many returned items are simply thrown out.</p>
<p>In 2022, returns cost retailers <a href="https://nrf.com/research/2022-consumer-returns-retail-industry">about US$816 billion</a> in lost sales. That’s nearly as much as the U.S. <a href="https://nces.ed.gov/fastfacts/display.asp?id=66">spent on public schools</a> and almost twice the <a href="https://nrf.com/research/customer-returns-retail-industry">cost of returns in 2020</a>. The return process, with <a href="https://doi.org/10.1038/s41467-020-20738-4">transportation and packaging</a>, also generated about <a href="https://4771362.fs1.hubspotusercontent-na1.net/hubfs/4771362/2022%20Impact%20Report/Optoro_2022%20Impact%20Report.pdf">24 million metric tons</a> of planet-warming carbon dioxide emissions in 2022.</p>
<p><iframe id="314QO" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/314QO/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Together, costs and emissions create a sustainability problem for retailers and the planet. </p>
<p>As a <a href="https://scholar.google.com/citations?user=fbARgoUAAAAJ&hl=en&oi=ao">supply chain management researcher</a>, I follow developments in retail logistics. Let’s take a closer look inside the black box of product returns.</p>
<h2>Returns start with miles of transportation</h2>
<p>So, you repackaged your unwanted shirt and the electric toothbrush and drove them to UPS, which has an agreement with Amazon for free returns. Now what?</p>
<p>UPS transports those items to the retailer’s warehouses <a href="https://www.mwpvl.com/html/amazon_com.html">dedicated to processing returns</a>. This step of the process costs the retailer money – <a href="https://www.cbre.com/insights/viewpoints/reverse-logistics-tis-the-stressful-season-for-holiday-gift-returns">66% of the cost</a> of a $50 item by one estimate – and emits carbon dioxide as trucks and planes carry items hundreds of miles. The plastic, paper or cardboard from the return package becomes waste.</p>
<figure class="align-center ">
<img alt="Two semi trucks with UPS logos drive down a highway toward the camera." src="https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=535&fit=crop&dpr=1 754w, https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=535&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/531476/original/file-20230612-254009-kbegb9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=535&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Returns can travel hundreds of miles in going from the customer’s hands to a return center, sometimes back to the manufacture, and then going back into inventory for resale.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/trucks-drive-by-the-scene-where-a-cargo-plane-was-searched-news-photo/106351058">William Thomas Cain/Getty Images</a></span>
</figcaption>
</figure>
<p>Processing a return takes <a href="https://www.shopify.com/enterprise/reverse-logistics">two to three times longer</a> than initially shipping the item – it has to be unpacked, inspected, repacked and rerouted. That adds more to the cost to the company, especially in a tight labor market. Workers have to manually unpack the items, inspect them and, based on the return reason, decide what will happen next.</p>
<h2>Restocking and reselling means more miles</h2>
<p>If a warehouse worker decides the shirt in our example can be resold, the shirt will be repackaged and sent to another warehouse.</p>
<p>Once another consumer orders the shirt, it will be ready to be packed and shipped.</p>
<figure class="align-center ">
<img alt="Two young men stand beside a conveyor belt with boxes on it. Several more belts just like it are behind them." src="https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=375&fit=crop&dpr=1 600w, https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=375&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=375&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=471&fit=crop&dpr=1 754w, https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=471&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/531477/original/file-20230612-29-cia282.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=471&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Retail warehouses tend to be vast buildings of conveyor belts and stacks of products and packaging materials.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/trucks-drive-by-the-scene-where-a-cargo-plane-was-searched-news-photo/106351058">Johannes Eisele/AFP via Getty Images</a></span>
</figcaption>
</figure>
<p>In-store returns can significantly cut warehouse and transportation costs, but driving to a brick-and-mortar store might not be convenient for the consumer. Only <a href="https://nrf.com/research/2022-consumer-returns-retail-industry">about a quarter of online purchases</a> are returned in person to the store.</p>
<h2>Refurbishing, if repair costs less than the product</h2>
<p>If the item is defective, like the electric toothbrush in our example, the warehouse worker might send it back to the manufacturer for fixing and refurbishing. It would be repackaged and loaded on a truck and possibly a plane to be sent to the manufacturer, leading to more carbon dioxide emissions.</p>
<p>If the electric toothbrush can be repaired, the refurbished product is ready to be sold into the consumer market again – <a href="https://www.nytimes.com/wirecutter/money/buying-refurbished-products/">often at a lower price</a>. </p>
<p>Refurbishing returned products helps to achieve a closed-loop supply chain where products are reused rather than disposed of as waste, making the process more sustainable than buying a new item.</p>
<figure class="align-center ">
<img alt="Two men holding products and scanners stand at computer stations with large bins beside them and stacks of bins in the background." src="https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=383&fit=crop&dpr=1 600w, https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=383&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=383&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=481&fit=crop&dpr=1 754w, https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=481&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/531479/original/file-20230612-150540-abtui0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=481&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Managing returns is more labor-intensive than fulfilling the original order, in part because it involves inspecting the item and then repackaging it.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/workers-process-arriving-merchandise-in-amazon-logistics-news-photo/524305368">Horacio Villalobos/Corbis via Getty Images</a></span>
</figcaption>
</figure>
<p>Sometimes, however, repairs cost more than the product can be resold for. When it is more expensive to restock or refurbish a product, it may be cheaper for the retailer to throw the item away.</p>
<h2>Landfills are a common end for returns</h2>
<p>If the company can’t resell the shirt or refurbish the electric toothbrush economically, the outlook for these items is grim. Some are <a href="https://www.cnbc.com/2022/01/28/amazon-returns-what-really-happens-to-them.html">sold in bulk</a> to discount stores. Often, returned products simply end up in landfills, sometimes overseas.</p>
<p>In 2019, about <a href="https://info.optoro.com/hubfs/Optoro%202019%20Impact%20Report.pdf">5 billion pounds of waste</a> from returns were sent to landfills, according to an estimate by the return technology platform Optoro. By 2022, the estimated waste had nearly doubled to <a href="https://4771362.fs1.hubspotusercontent-na1.net/hubfs/4771362/2022%20Impact%20Report/Optoro_2022%20Impact%20Report.pdf">about 9.5 billion pounds</a>.</p>
<h2>Era of free returns might not last</h2>
<p>In the past, customers who wanted to return items by mail were often expected to do so on their own dime. That changed after Amazon began offering free returns and providing easy-to-use drop-off locations at UPS or Kohl’s stores. Other retailers followed suit to compete, with many seeing free returns as a <a href="https://info.optoro.com/report-the-anatomy-of-returns">way to keep shoppers coming back</a>.</p>
<p>But that pendulum may be <a href="https://www.cbsnews.com/miami/news/retailers-cracking-down-online-returns-charging-fees/">starting to swing back</a>. The percentage of retailers charging to ship returns increased from <a href="https://corp.narvar.com/resources/2022-returns-policy-benchmark">33% to 41% in 2022</a>. </p>
<p>Retailers are trying several other techniques to lower the return rate, waste and losses, which ultimately come back to consumers in the form of higher prices. </p>
<p>Some retailers have shortened the return window, limited frequented returns or stopped offering free returns. Other strategies include <a href="https://doi.org/10.1177/00222437231154871">virtual dressing rooms</a> and clearer fitting guides, which can help reduce clothing returns, as can high-quality photos and videos that reflect size and color accurately. If consumers use those tools and pay attention to sizing, they can help cut down on retail’s growing climate footprint.</p><img src="https://counter.theconversation.com/content/206551/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simone Peinkofer does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Returns are becoming a costly sustainability problem for retailers and the planet. A supply chain expert explains.Simone Peinkofer, Assistant Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2020582023-05-25T12:05:43Z2023-05-25T12:05:43ZHow online grocery shopping is making Britain’s urban-rural inequality worse<figure><img src="https://images.theconversation.com/files/528225/original/file-20230525-25-4slr26.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/Nvo5xeoccVg">Jan Kopriva/Unsplash</a></span></figcaption></figure><p>Before the pandemic, online grocery shopping was typically something younger and more affluent people living in cities indulged in. When COVID hit, though, <a href="https://theconversation.com/two-years-into-the-pandemic-which-of-our-newly-formed-habits-are-here-to-stay-178204">the market exploded</a>. </p>
<p>In the first week of the first UK lockdown, demand for Ocado home deliveries was reportedly <a href="https://www.reuters.com/article/us-health-coronavirus-britain-supermarke-idUSKBN21H210">ten times higher</a> than it had been the week before. But when COVID restrictions were re-imposed in September 2020, the online supermarket, like its competitors, was <a href="https://www.dailymail.co.uk/news/article-8750427/Ocado-warns-running-delivery-slots-second-lockdown-looms-Britain.html">still warning customers</a> that slots were selling out fast. So fast, in fact, one staffer <a href="https://www.reuters.com/article/us-health-coronavirus-britain-supermarke-idUSKBN21H210">said</a> they were going “like Glastonbury tickets.”</p>
<p>Households struggled to book delivery slots, as supermarkets rightly <a href="https://www.theguardian.com/business/2020/mar/25/supermarkets-use-database-to-prioritise-deliveries-to-elderly">prioritised</a> deliveries for elderly and vulnerable consumers. And retailers hustled to <a href="https://www.mintel.com/press-centre/click-spend-90-of-brits-plan-to-continue-online-grocery-shopping-even-after-peak-covid-19-passes/">capitalise on this rapid growth</a>. </p>
<p>In April 2020, Tesco told its customers it <a href="https://www.tescoplc.com/news/2020/our-latest-response-to-covid-19-29-april/">had hired</a> 12,000 extra staff and 4,000 new delivery drivers. Six months in, Sainsbury’s said it was delivering 700,000 online orders per week, having effectively <a href="https://www.about.sainsburys.co.uk/news/latest-news/2020/28-09-20-sainsburys-dials-up-digital#:%7E:text=Sainsbury's%20will%20deliver%20700%2C000%20online,since%20the%20beginning%20of%20March.">doubled</a> its capacity. </p>
<figure class="align-center ">
<img alt="A cat amid bags of shopping." src="https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526585/original/file-20230516-29-z6wabp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">COVID lockdowns saw new demographics turn to online deliveries.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/DPC8oN2IMcY">Daniel Romero/Unsplash</a></span>
</figcaption>
</figure>
<p>In 2019, prior to the pandemic, my colleagues and I <a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">mapped online groceries coverage</a> by all the major UK grocers, using the “check if we deliver to your area” tool on their websites. We found that where you live affects your choice and availability of online groceries. </p>
<p>People in rural areas have <a href="https://www.cdrc.ac.uk/cdrc-analysis-uncovers-new-rural-e-food-deserts/">less access to supermarkets in general</a> and, when it comes to online grocery shopping, just over 11% of those people have no choice at all. </p>
<h2>Lack of choice</h2>
<p>When households order groceries online from the major supermarkets, their orders are usually assembled in a local supermarket, what industry insiders term an “online fulfilment store”. These have dedicated staff, storage space, vehicles and drivers. </p>
<p>This model, however, means that online groceries are <a href="https://www.mdpi.com/0718-1876/17/2/33">not available</a> in all locations. Rather, they are concentrated around the network of stores that each grocer operates. </p>
<figure class="align-center ">
<img alt="A cottage in a valley with fog overhead." src="https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528238/original/file-20230525-15-sg2yw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People living in rural Scotland have very few online options.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/XwjICmfI0SQ">Antoine Fabre/Unsplash</a></span>
</figcaption>
</figure>
<p>On each supermarket website we inputted one postcode from each of the 41,735 neighbourhoods in Great Britain – representing 25.7m households – and recorded the result. We then counted the number of retailers delivering to each neighbourhood.</p>
<p>We found that 98% of households in Great Britain are served by at least one of Tesco, Sainsbury’s or Asda. These three grocers offer the greatest delivery coverage, particularly in urban and suburban areas where households have a choice of grocer providing home delivery. </p>
<p>Other grocers have more restricted coverage. Iceland, a budget retailer with stores in urban areas, serves only 86% of households. Ocado, meanwhile, which is more upmarket and online only, delivers to only 77% of households. </p>
<p>Many neighbourhoods – in south-west and northern England, south and mid-Wales, and in Scotland’s borders, highlands and islands – suffer poor coverage of online groceries. </p>
<p>Households in many neighbourhoods in Argyll and Bute (Scotland), for example, have a single online groceries provider (Tesco). By contrast, in nearby Glasgow, most neighbourhoods have a choice of six online grocery providers. </p>
<p>Across Great Britain, we found that
<a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">over 11% of households</a> in the most remote rural areas have no choice of provider. They must rely on a single grocer (typically Tesco) for online groceries. </p>
<h2>Why retailers are not expanding into rural areas</h2>
<p>Rural areas that are underserved by supermarkets in general are precisely those that could benefit the most from better online provision. In urban contexts, the older, higher spending consumer demographic was newly <a href="https://www.efoodinsights.com/uk-online-grocery-report/">converted</a> to online grocery shopping. </p>
<p>In rural areas, this same demographic could therefore represent untapped demand. In other words, there is an incentive for retailers to expand there.</p>
<figure class="align-center ">
<img alt="A row of beach huts on a beach." src="https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528230/original/file-20230525-23-py6r8k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Supermarket coverage across Wales is much thinner than for England.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/Xvh4JikjajI">Llio Angharad/Unsplash</a></span>
</figcaption>
</figure>
<p>But that is not happening. We had rare access to data about the nationwide network of Sainsbury’s stores. <a href="https://www.mdpi.com/0718-1876/17/2/33">Over 180 of those supermarkets</a> are in London and south-east England, 85 of which are used as online fulfilment stores. This means the retailer is able to deliver groceries to all neighbourhoods in these regions. </p>
<p>In Wales, by contrast, there are only <a href="https://www.mdpi.com/0718-1876/17/2/33">four Sainsbury’s online fulfilment stores</a> concentrated around the major towns and cities in south Wales. <a href="https://www.tandfonline.com/doi/full/10.1080/09593969.2021.2017321">We found that</a> home delivery by Sainsbury’s was unavailable to 162,000 Welsh households (12%). </p>
<p>Even if all existing Sainsbury’s supermarkets in Wales were used for online deliveries, over 25% of neighbourhoods would still be <a href="https://www.mdpi.com/0718-1876/17/2/33">more than 40km</a> from their nearest fulfilment store. Drivers could have to travel over 100km to make their deliveries. This is prohibitively expensive and inefficient. </p>
<p>To expand online groceries coverage beyond the store network, retailers would need to fork out considerable sums to build more stores. Most, however, <a href="https://www.grocerygazette.co.uk/2023/03/09/plans-supermarkets-expanding/">have cut back</a> on supermarket expansion plans, focusing instead on smaller convenience stores to reflect changing shopper behaviours. </p>
<p>Amid changing consumer behaviours, online remains a key battleground for grocers. However, it <a href="https://www.economist.com/britain/2021/01/23/an-online-sales-boom-is-killing-supermarket-profits">offers lower profit margins</a> than in-store shopping due to the higher costs of order preparation and delivery. </p>
<figure class="align-center ">
<img alt="A cab with an ad for an online grocery company." src="https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528227/original/file-20230525-27-z4t2n2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Will Turkish online grocer Getir expand into rural areas?</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/IXOqVutVfdM">Metin Ozer/Unsplash</a></span>
</figcaption>
</figure>
<p>Another solution is the <a href="https://www.theguardian.com/business/2023/jan/16/sainsburys-signs-deal-with-food-delivery-app-just-eat">partnership model</a> between grocers and <a href="https://theconversation.com/rapid-delivery-grocery-apps-have-flourished-during-the-pandemic-but-will-they-permanently-change-how-we-shop-162391">online platforms</a> such as Uber Eats, Just Eat and Deliveroo, who collect customer orders from smaller convenience stores (such as Tesco Express). </p>
<p>New players like the Turkish <a href="https://www.wired.co.uk/article/getir-europe-delivery-wars">online-only grocer Getir</a> offer <a href="https://theconversation.com/fast-grocery-deliveries-are-likely-to-get-more-expensive-heres-why-177502">rapid delivery services</a> using smaller, more efficient warehouses located close to the customers. However, these, too, are confined to urban areas, for now. </p>
<p>Not being able to choose where you shop has several adverse impacts. It can restrict <a href="https://www.gov.uk/government/news/cma-blocks-merger-between-sainsburys-and-asda">competition</a> in online groceries, which in turn can see customers faced with less choice of delivery slot or higher charges for home delivery. </p>
<p>And, as highlighted by the consumer choice champion <a href="https://campaigns.which.co.uk/affordable-food/">Which?</a> and the <a href="https://www.cdrc.ac.uk/priority-places-for-food-index/">Consumer Data Research Centre</a>, it can hamper access to affordable, healthy groceries, by limiting customers’ opportunity to shop around for the best deals and widest range. </p>
<p>Quite how this might change though boils down to whether the major grocers or the new innovators <a href="https://theconversation.com/inflation-the-supermarket-business-model-is-too-fragile-to-shield-customers-from-rising-food-prices-183408">are able</a> to make the investments needed to better cater to rural demand. Until then, customers in these areas will <a href="https://www.cdrc.ac.uk/cdrc-analysis-uncovers-new-rural-e-food-deserts">face the dual disadvantage</a> of poor access to larger supermarkets and fewer online grocery options to improve things.</p><img src="https://counter.theconversation.com/content/202058/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research reported here has been undertaken by a team based at the University of Leeds, with support from the Consumer Data Research Centre, Leeds Institute for Data Analytics and Centre for Doctoral Training in Data Analytics and Society. Specific acknowledgement is given to Dr Nick Hood, School of Geography, University of Leeds for his contribution to this work.</span></em></p>People in rural areas have less access to supermarkets in general. When it comes to online grocery shopping, just over 11% of those have no choice at all.Andy Newing, Associate Professor in Applied Spatial Analysis, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2029992023-05-17T15:27:50Z2023-05-17T15:27:50ZBuy now pay later: Klarna is courting young shoppers with Paris Hilton and TikTok-style algorithms – here’s why it’s a problem<figure><img src="https://images.theconversation.com/files/522757/original/file-20230425-3326-u53w6r.jpg?ixlib=rb-1.1.0&rect=107%2C87%2C6382%2C3901&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-beautiful-young-couple-enjoying-having-659109247">Shutterstock</a></span></figcaption></figure><p>After adding a few too many items to your online shopping cart, you head over to the payment page to check out. Alongside the usual credit card and PayPal payment fields, you see an enticing new option. A colourful button offers to allow you to spread your payment over several months at 0% interest. This would lessen the immediate dent a payment to ASOS, Shein or H&M might make on your bank balance, and allow you to purchase all the items in your bag.</p>
<p>Buy now, pay later (BNPL) services are now readily available with thousands of online retailers. Nearly 17 million consumers in the UK have used <a href="https://www.finder.com/uk/buy-now-pay-later-statistics">BNPL services</a> like Klarna and Clearpay. BNPL companies offer a period of interest-free credit (usually several months). They typically levy late fees if this time frame is exceeded, and pass it on to debt collectors if the repayment is repeatedly missed. </p>
<p>While people of all ages are increasingly <a href="https://www.ft.com/content/524a7e1e-4ff0-48d6-b9b1-973a9dd4e8d9">turning to these services</a> to manage in the cost of living crisis, data shows that BNPL is <a href="https://www.forbes.com/uk/advisor/credit-cards/buy-now-pay-later-statistics/">most used by young people</a> between the ages of 18 and 34. In order to target this audience – Millennials and Gen Zs – Klarna relies extensively on colourful, upbeat social media marketing strategies.</p>
<hr>
<figure class="align-right ">
<img alt="Quarter life, a series by The Conversation" src="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451343/original/file-20220310-13-1bj6csd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><em><strong><a href="https://theconversation.com/uk/topics/quarter-life-117947?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">This article is part of Quarter Life</a></strong>, a series about issues affecting those of us in our twenties and thirties. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.</em></p>
<p><em>You may be interested in:</em></p>
<p><em><a href="https://theconversation.com/management-lessons-from-ted-lasso-the-importance-of-clear-goals-and-positive-feedback-202209?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">Management lessons from Ted Lasso: the importance of clear goals and positive feedback</a></em></p>
<p><em><a href="https://theconversation.com/what-is-eldest-daughter-syndrome-and-how-can-we-fix-it-202016?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">What is ‘eldest daughter syndrome’ and how can we fix it?</a></em></p>
<p><em><a href="https://theconversation.com/how-a-night-of-poor-sleep-can-affect-your-next-day-at-work-and-four-ways-to-function-better-201896?utm_source=TCUK&utm_medium=linkback&utm_campaign=UK+YP2022&utm_content=InArticleTop">How a night of poor sleep can affect your next day at work – and four ways to function better</a></em></p>
<hr>
<p>The company has just <a href="https://www.cnbc.com/2023/04/25/klarna-overhauls-app-with-tiktok-like-discovery-feed-amid-ai-buzz.html?utm_source=substack&utm_medium=email">announced</a> a redesign of its app that will feature a “discovery feed”, similar to TikTok’s “for you page”, to offer shoppers personalised recommendations.</p>
<p>A 2021 <a href="https://www.klarna.com/us/blog/social-media-marketing-for-gen-z-and-millennials/">blog post by Klarna</a> offers detailed tips for businesses hoping to win over young shoppers on social media:</p>
<blockquote>
<p>Learning how to speak to these audiences is even more important than ever, especially as their buying power eclipses that of previous generations.</p>
</blockquote>
<p>Klarna has also enlisted a famous face to help it reach an audience enamoured with noughties nostalgia. In February, the company announced a partnership with American reality TV icon and multimillionaire heiress Paris Hilton. Calling her a fashion, tech and business trailblazer, Klarna’s chief marketing officer, David Sandström, <a href="https://www.prnewswire.com/news-releases/klarna-announces-global-campaign-starring-paris-hilton-in-collaboration-with-hiltons-1111-media-301740630.html">noted</a> that Hilton was a fitting partner for the company because of “her shopping prowess”. </p>
<p>Hilton won’t just be fashion inspiration, she also represents a capacity to spend mega-money. It’s almost impossible to imagine Hilton using Klarna to the same end as consumers who use it to delay payments for groceries or other essentials. Indeed, in <a href="https://www.instagram.com/p/CpnUAnaPtjP/">one tongue-in-cheek post</a>, Hilton trains her dog to shop using Klarna so they can have matching tracksuits.</p>
<p>A Klarna spokesperson told The Conversation:</p>
<blockquote>
<p>We’ve made a conscious decision to be different, to not feel like the big traditional banks but communicate in a way smart shoppers can relate to. Our products are designed to encourage responsible spending, and with 99% of our lending repaid, it’s clear they do just that.</p>
</blockquote>
<h2>Beware or pay later</h2>
<p>It’s socially irresponsible for Hilton to deliver messages about how people should manage their money. This fun, carefree endorsement could be particularly misleading or dangerous for those wanting to escape the strain of inflation and high bills that permeate current everyday living. </p>
<p>BNPL credit gives shoppers an opportunity to spend quickly and easily, and provides a brief respite from financial troubles. But it comes with potential longer-term pitfalls. </p>
<p>Consumers may find this particularly difficult to manage, as our relationship with spending money as a “reward” or “retail therapy” is very much part of western culture, even in times of economic hardship. This is evident in <a href="https://www.theguardian.com/business/2022/oct/14/lipstick-effect-britons--luxuries-cost-of-living-crisis">the “lipstick effect”</a>: the inverse correlation between economic downturn and increased sales of smaller items. In other words, when people cut back on big ticket spending like holidays or cars, they treat themselves with more affordable luxuries like lipstick, coffee and chocolate.</p>
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<p>A partnership with Hilton could downplay the seriousness of borrowing. One third of BNPL borrowers said in 2022 that their loans had <a href="https://www.theguardian.com/business/2022/jun/23/buy-now-pay-later-uk-research">become unmanageable</a>. </p>
<p>Klarna claims that 99% of their lending is repaid, and 40% of customers pay the company back early. But data reflecting the wider sector suggests that BNPL users are struggling to keep up with payments.</p>
<p>A survey by Credit Karma found that 41% of BNPL users had missed a payment and incurred charges from <a href="https://www.theguardian.com/business/2022/oct/03/its-just-so-easy-isnt-it-how-buy-now-pay-later-can-leave-britons-struggling-with-debt">high interest rates</a>. StepChange reported that half of those with a BNPL loan found it difficult to keep up with bills and credit repayments, with 17% of borrowers in <a href="https://www.stepchange.org/media-centre/press-releases-bnpl-consumer-struggles.aspx">“severe financial difficulty”</a>. </p>
<p>StepChange also found that 40% of BNPL borrowers had fallen behind on housing payments or utility bills to keep up with credit repayments. And 39% of people with BNPL debt reported that credit had a negative impact on their health, <a href="https://www.stepchange.org/media-centre/press-releases-bnpl-consumer-struggles.aspx">relationships or work</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/cost-of-living-four-ways-to-stop-banks-and-companies-using-complex-maths-against-you-189095">Cost of living: four ways to stop banks and companies using complex maths against you</a>
</strong>
</em>
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<hr>
<p>A <a href="https://home.barclays/news/2021/11/-barclays-reveals-pitfalls-of-unregulated-bnpl-agreements-for-ch/">study from Barclays</a> found that while BNPL services are more accessible than credit cards, two in five users are unclear on the terms and conditions, and do not fully understand the consequences of missed repayments.</p>
<p>Users were also unaware that providers were not required to do the same financial checks as credit cards to ensure consumers can manage and afford repayments. When BNPL providers pass unpaid debt to debt collection agencies, this can then negatively affect your <a href="https://www.thetimes.co.uk/money-mentor/article/buy-now-pay-later-vs-credit-cards/#credit-score">credit rating</a>. </p>
<p>Research shows that this can push people further into financial trouble. A poor credit score limits access to other mainstream credit sources, so if someone needs money, they feel vulnerable and are <a href="https://nrl.northumbria.ac.uk/id/eprint/30782/1/Post-print%20JFSM%20article%20-%20The%20Orbit%20of%20Consumer%20Credit%20Choices.pdf">pushed into high cost credit options</a> such as payday loans or pawning, which can result in unmanageable debt. In a vulnerable situation, consumers oscillate between <a href="https://journals.sagepub.com/doi/10.1177/14705931211027930">blaming the lenders and blaming themselves</a>, leading to a spiral of emotional decision making that can make people feel trapped into using the service again.</p>
<p>These companies are still largely unregulated in the UK, with plans for regulation legislation from the Financial Conduct Authority <a href="https://www.reuters.com/business/finance/britain-sets-out-legislation-regulate-buy-now-pay-later-credit-2023-02-13/">coming soon</a>. Until then, consumers need to be vigilant when using BNPL – that includes being critical of the ways it is marketed to them, including spending advice from one of the world’s richest people.</p><img src="https://counter.theconversation.com/content/202999/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Here’s what you need to know about these mini loans.Jehana Copilah-Ali, Research Associate, Newcastle UniversityJane Brown, Lecturer in Marketing, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2004462023-03-05T19:20:24Z2023-03-05T19:20:24ZSex and lies are used to sell vapes online. Even we were surprised at the marketing tactics we found<figure><img src="https://images.theconversation.com/files/513089/original/file-20230302-22-rpx5kz.jpg?ixlib=rb-1.1.0&rect=0%2C2%2C998%2C745&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hague-netherlands-march-13-2022-popular-2135784369">oliverdelahaye/Shutterstock</a></span></figcaption></figure><p>It’s easy to buy vapes or e-cigarettes online. When we looked at websites selling them to buyers in Australia and New Zealand, we found a variety of slick, false or misleading marketing claims.</p>
<p>In our <a href="https://www.sciencedirect.com/science/article/pii/S1326020022000139?via%3Dihub">new research</a> we outlined how these included health claims – how vapes contain “zero” carcinogens, are an effective aid for quitting smoking, and lead to improved breathing “in a matter of days”. </p>
<p>Vapes were also marketed as sexy, sleek and environmentally friendly.</p>
<p>We saw a range of products on sale – including several bundled together as “starter kits”. Most vaping liquid contained nicotine. There were price discounts, loyalty schemes and free delivery.</p>
<p>Here’s why this is all such a concern and what we can do about it.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/vaping-related-lung-disease-now-has-a-name-and-a-likely-cause-5-things-you-need-to-know-about-evali-125730">Vaping-related lung disease now has a name – and a likely cause. 5 things you need to know about EVALI</a>
</strong>
</em>
</p>
<hr>
<h2>What we did and what we found</h2>
<p>We investigated 20 Australian and New Zealand online retailers of vapes and vaping products.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Marketing discount for vapes" src="https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/512448/original/file-20230227-18-ks3a5e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Discounts and special offers were common.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>We looked at their product range, how they verified buyers’ ages, as well as their marketing strategies and claims.</p>
<p>Most websites only needed buyers to click on a box to confirm they were 18 years old or over. When buyers clicked through, they could find a range of nicotine and no-nicotine vapes and vaping liquids. Some didn’t ask buyers’ ages at all. Only one site needed buyers to verify their age with formal identification.</p>
<h2>Outlandish marketing claims</h2>
<p>Unsubstantiated or blatantly false health claims were the most common claims we found. These included:</p>
<blockquote>
<p>vaping has been proven to be up to 95% less harmful than smoking cigarettes.</p>
</blockquote>
<p>This statement stems from a study <a href="https://journals.sagepub.com/doi/pdf/10.1177/026119291504300610?casa_token=rjfg5Px-WNcAAAAA:PTechh4LPbk4yXDV15A6MndWRNayULmxMau8WwR6eaN3Y000g7G9rn_dBuEijTNeqmtFL0a_hiw">criticised</a> for its lack of hard evidence, yet it remains a common claim. </p>
<p>Other health claims included:</p>
<blockquote>
<p>you will feel your breathing improve in a matter of days.</p>
</blockquote>
<p>and:</p>
<blockquote>
<p>if you are vaping high quality tested liquids, then you can be puffing on ZERO carcinogens. </p>
</blockquote>
<p>When it came to quitting smoking, websites claimed:</p>
<blockquote>
<p>e-cigarettes are a more effective tool for helping smokers quit than nicotine replacement therapies, including patches and gum.</p>
</blockquote>
<p>These claims are unfounded as the jury remains out as to whether these products help people quit smoking. A major review of the literature found there was <a href="https://openresearch-repository.anu.edu.au/handle/1885/262914">insufficient evidence</a> to promote vapes for this.</p>
<p>Websites also called vaping “sleek”, “stylish” and futuristic. </p>
<p>One website claimed:</p>
<blockquote>
<p>Some people vape because it’s sexy.</p>
</blockquote>
<p>Another site claimed:</p>
<blockquote>
<p>Creative design, advanced technology, [product name] will bring you infinite pleasure.</p>
</blockquote>
<p>There were environmental claims too, such as:</p>
<blockquote>
<p>don’t buy a disposable [e-cigarette] that isn’t fully recyclable – our device is friendly to the planet.</p>
</blockquote>
<p>Marketing vaping products as something creative, innovative, sleek, sexy and environmentally friendly would be particularly appealing to younger buyers.</p>
<p>We found multiple payment methods, price discounts and opportunities to earn loyalty discounts. Delivery options including postal and courier services. Sometimes, delivery was free.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Free shipping marketing tactic" src="https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=136&fit=crop&dpr=1 600w, https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=136&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=136&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=171&fit=crop&dpr=1 754w, https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=171&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/512451/original/file-20230227-20-w04btt.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=171&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sometimes, delivery was free.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Why is this an issue?</h2>
<p>Vapes <a href="https://www.tobaccoinaustralia.org.au/chapter-18-e-cigarettes/18-6-the-health-effects-of-e-cigarette-use">are not harmless products</a>. They contain hundreds of chemicals, originating from the e-liquids, from the device and formed by the heating element, many of which are toxic. Risks include addiction, poisoning, seizures, burns and injuries, lung injury, and environmental pollution (from plastics and lithium batteries).</p>
<p>Vaping use almost tripled among Australian adults between <a href="https://www.tobaccoinaustralia.org.au/chapter-18-e-cigarettes/18-3-extent">2013 and 2019</a> and <a href="https://www.abs.gov.au/statistics/health/health-conditions-and-risks/smoking/latest-release">young adults</a> are taking up vaping in droves.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1628942421018169346"}"></div></p>
<p>Buying vapes online is popular. An <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-023-15142-8">Australian study</a> reported adolescents mainly get vapes from “friends”. However, adults (25+ years) tend to buy them online. It’s likely “friends” who provide vapes to adolescents could be buying at least some of these online.</p>
<p>An <a href="https://click.endnote.com/viewer?doi=10.3390%2Fijerph16030338&token=WzMzMDE4ODAsIjEwLjMzOTAvaWplcnBoMTYwMzAzMzgiXQ.PwsYKA6Wl8Peh_VhuDkajiNLdBc">international study</a> also reported Australians mostly (65.2%) bought their vape products online. In fact, the study found Australians were many times more likely to buy them online compared with people in Canada, the United States and England.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/we-asked-over-700-teens-where-they-bought-their-vapes-heres-what-they-said-190669">We asked over 700 teens where they bought their vapes. Here's what they said</a>
</strong>
</em>
</p>
<hr>
<h2>What needs to happen next?</h2>
<p>Nicotine-containing vapes are only <a href="https://www.tga.gov.au/resources/resource/guidance/nicotine-vaping-products-information-prescribers#:%7E:text=From%201%20October%202021%2C%20all,from%20Australian%20pharmacies%20and%20overseas.">legally available</a> to adults in Australia with a doctor’s prescription to help people stop smoking. </p>
<p>In New Zealand, nicotine-containing vapes <a href="https://vapingfacts.health.nz/the-facts-of-vaping/vaping-law-and-policy/">can be legally purchased</a> as a regulated product. However, in both countries, it is illegal for manufacturers or retailers to sell them to those under 18.</p>
<p>Despite these restrictions, it’s clear both nicotine and no-nicotine vapes are being sold to under 18s, and to people without prescriptions.</p>
<p>Australia’s Health Minister Mark Butler has <a href="https://www.abc.net.au/news/2023-02-24/australia-vaping-problem-health-policy-solution/102012768">recently met with</a> state and territory health ministers to discuss vaping regulation. The Therapeutic Goods Administration earlier this year <a href="https://www.tga.gov.au/resources/consultation/consultation-proposed-reforms-regulation-nicotine-vaping-products">finished taking public submissions</a> about proposed vaping reforms.</p>
<p>It’s time we stop the promotion of, and easy access to, vaping products through online retailers. We also need to ban the use of unsubstantiated marketing claims.</p>
<p>This will require improved surveillance, monitoring, and regulations that curb the online sale and importation of vapes, along with improved border controls.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-can-we-reverse-the-vaping-crisis-among-young-australians-enforce-the-rules-185867">How can we reverse the vaping crisis among young Australians? Enforce the rules</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/200446/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonine Jancey receives funding from the WA Health Promotion Foundation. She is a Board member of the Australian Council on Smoking and Health.</span></em></p>Vapes were marketed as healthy, sexy, sleek and environmentally friendly. It’s time we clamped down on these dodgy claims.Jonine Jancey, Academic and Director Collaboration for Evidence, Research and Impact in Public Health, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2003082023-02-21T18:11:54Z2023-02-21T18:11:54ZUK shoppers are choosing bricks over clicks right now, but here’s why it isn’t the end for online retail<figure><img src="https://images.theconversation.com/files/511205/original/file-20230220-18-56d1sa.jpg?ixlib=rb-1.1.0&rect=121%2C74%2C4338%2C2889&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shoppers have been returning to physical stores in recent months.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-teenager-pretty-girl-looking-clothes-180658181">SergeBertasiusPhotography/Shutterstock</a></span></figcaption></figure><p>British retail sales figures showed an unexpected bump in activity over the Christmas shopping period that <a href="https://theconversation.com/cost-of-living-crisis-why-its-been-a-happy-new-year-for-uk-retailers-keeping-up-with-changing-shopping-trends-197585">exceeded expectations</a> – particularly given the current UK cost of living crisis.</p>
<p>But beneath the headlines of positive sales in recent months, it was more surprising to see physical stores performing markedly better than online shops. Many multi-channel retailers, including <a href="https://internetretailing.net/industry/next-reports-better-than-expected-christmas-sales-driven-by-a-return-to-stores/">Next</a> and <a href="https://www.theretailbulletin.com/fashion/seasalt-trading-boosted-by-christmas-but-wary-of-tough-months-ahead-06-01-2023/">Seasalt</a>, said their physical stores outstripped online sales, while online retailers such as <a href="https://www.marketingweek.com/asos-sales-slow-down-over-christmas/">Asos</a> and <a href="https://www.reuters.com/business/retail-consumer/online-retailer-boohoo-sales-drop-11-christmas-period-2023-01-19/">Boohoo</a> experienced poor Christmas trading. Revenues for online grocery firm Ocado fell by 3.8% in 2022 <a href="https://www.theguardian.com/business/2023/jan/17/ocado-record-christmas-sales-buying-fewer-items">despite record Christmas trading</a>.</p>
<p>Even online retail giant Amazon was <a href="https://www.retail-insight-network.com/comment/amazon-uk-sales-growth-sinks/">less successful</a> in the UK last year. Accounting for exchange rate fluctuations, Amazon’s sales figures suggested positive growth of 5.2% in sterling terms in 2022, but this was its lowest-ever annual growth rate in the UK.</p>
<p>The Christmas bonus for UK bricks and mortar shops was influenced by two issues. In addition to being the first “normal” Christmas since 2019 – shops were open with no lockdowns or restrictions – a wave of <a href="https://www.standard.co.uk/news/uk/royal-mail-postal-strikes-december-2022-christmas-b1028678.html">postal strikes in November and December 2022</a> made online deliveries less predictable. And while <a href="https://www.independent.co.uk/travel/news-and-advice/tssa-train-strike-today-december-b2252387.html">rail strikes</a> may have affected travel to some physical stores at the same time, local retail areas may still have benefited from concerns that online purchases might not make it under the tree by Christmas day.</p>
<h2>The future of bricks versus clicks</h2>
<p>The finance director of Primark, <a href="https://theconversation.com/fashion-retailer-primark-is-refusing-to-sell-online-heres-why-it-is-right-to-do-so-153511">a resolute hold-out against online retail</a>, believes <a href="https://www.retail-week.com/fashion/primark-boss-time-to-change-the-narrative-about-online-sales-growth/7043060.article?">online retail will not continue to grow rapidly</a>, as it has done in recent years, and that it now looks “mature”. After years of record online sales growth stoking fears for the future of British high streets, the tide seems to be turning for British shopping patterns.</p>
<p>The most recent <a href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/january2023">retail sales figures</a> from the Office for National Statistics show a plateauing of online retail sales over the past 12 months.</p>
<p><strong>Internet sales as a percentage of retail sales</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=236&fit=crop&dpr=1 600w, https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=236&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=236&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=296&fit=crop&dpr=1 754w, https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=296&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/511162/original/file-20230220-24-ks37hk.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=296&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Internet sales as a percentage of total retail sales from November 2006 to January 2023 (ratio, %).</span>
<span class="attribution"><a class="source" href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi">Office for National Statistics</a></span>
</figcaption>
</figure>
<p>There are four main reasons for this flattening of online shopping figures.</p>
<p><strong>1. Online retail reaching a peak</strong></p>
<p>The current slowdown follows years of rapid growth, suggesting that online shopping has reached a peak, although this does not mean it will fall back rapidly any time soon. British online shopping figures have been higher than that of many other countries for much of the past decade. And British people continue to shop online <a href="https://www.statista.com/statistics/281241/online-share-of-retail-trade-in-european-countries/">a lot more than</a> consumers in many other countries.</p>
<p><strong>2. Annual shopping trends continue</strong></p>
<p>An important component of the annual retail cycle is the peak in November and December each year. Black Friday is <a href="https://theconversation.com/black-friday-in-britain-where-it-all-went-wrong-127967">no longer a single-day event</a> and Christmas remains a significant sales driver. British consumers clearly embrace online shopping during this key November and December sales period, although <a href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/december2019">the 2019 figures</a> (from just before COVID hit) suggested a reduction on previous years.</p>
<p><strong>3. COVID-era changes</strong></p>
<p>The scale of the <a href="https://www.economicsobservatory.com/how-coronavirus-affecting-uks-retail-sector">disruption from COVID</a> is obvious. As shops closed during lockdowns, online took up the strain and expanded rapidly. At its peak in January 2021, internet buying reached 37.8% of retail sales as the pandemic turbo-charged the online sector. </p>
<p>The web was a lifeline for many retailers and consumers during this period, providing businesses with another way to reach customers and continue operating, and providing a way for consumers to order goods amid general pandemic restrictions or if they had to shield. It is hard to imagine people completely stopping shopping online.</p>
<p><strong>4. Meeting expectations</strong></p>
<p>Finally, the online sector proportion of retail sales fell as we came out of out of lockdown, but this was expected. As the chart above shows, it is 26.6% as of January 2023, some 30% off its peak, but also above the long-term trend. </p>
<p>The recent figures in this series, along with more general signs, do hint at further change, however. The UK E-commerce trade association, imrg, predicts <a href="https://www.imrg.org/blog/and-a-happy-new-year-are-good-tidings-in-store-for-2023/">a declining online ecommerce sector</a> in 2023. Consumers, despite cost of living and strikes, seem to want to return to the shops – and online retailing is not immune to cost pressures either.</p>
<figure class="align-center ">
<img alt="calculator and cart in shopping online concept" src="https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/511202/original/file-20230220-26-6tct9f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Calculating the cost of shopping online versus in a shop.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/calculator-cart-shopping-online-concept-720088921?src=41thXWb_Xup_R2hRRDcvrA-1-53">issaro prakalung/Shutterstock</a></span>
</figcaption>
</figure>
<p>It would be absurd to say online retailing is in crisis – it still claims <a href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi">a quarter of all retail sales</a>. Consumers are used to having access to it and can see its benefits. As a retail option it is here to stay. But perhaps UK retail is reaching a more settled level of online sales. Of course, this idea has been <a href="https://theconversation.com/online-shopping-why-its-unstoppable-growth-may-be-coming-to-an-end-118616">proposed many times</a> since Amazon launched its website in 1995 and online retail has continued to grow.</p>
<p>But just like everyone else during the current cost of living crisis, retailers with online offerings are trying to curtail their costs and exposures. If, as is claimed, <a href="https://www.thetimes.co.uk/article/online-returns-rose-to-1-in-3-items-last-year-say-retailers-lxcbvkj5n">one in three fashion items bought online are returned</a>, it is easy to question the financial and <a href="https://theconversation.com/fast-fashion-why-your-online-returns-may-end-up-in-landfill-and-what-can-be-done-about-it-188090">environmental sustainability</a> of the model. </p>
<p>Some retailers including Zara, Next and <a href="https://www.moss.co.uk/returns-policy#:%7E:text=goods%20to%20us.-,Return%20Courier%20Cost,-If%20you%20choose">Moss Bros</a>, <a href="https://www.chargedretail.co.uk/2022/05/31/parcelhero-weve-almost-reached-the-point-of-no-free-return/">have begun to charge for returns</a> to limit costs. Others are charging for subscription services, such as <a href="https://www.amazon.co.uk/Amazon-Relentless-Retailer-Continue-Revolutionize/dp/139860142X">Amazon</a> and <a href="https://www.dailyrecord.co.uk/lifestyle/tesco-announces-major-update-rapid-29234803">Tesco</a>, or bundling offerings together to create an enhanced deal for consumers. The sector is taking a hard look at what works and at what cost and return on investment.</p>
<p>Consumers are also <a href="https://theconversation.com/shopping-the-cost-of-living-crisis-is-hitting-people-urgently-and-directly-retail-expert-qanda-185801">concerned about what they are spending</a>. Working out the costs, impact and convenience of travelling versus online buying, on top of the actual price of the products, is important when money is tight. But different consumers will come up with different results depending on their situation, product, price and charges.</p>
<p>Online shopping provides many benefits. But, even with <a href="https://www.bbc.co.uk/news/business-63807159">recent news</a> of <a href="https://www.retailgazette.co.uk/blog/2023/01/mco-redundancies-continue/">multiple corporate</a> closures and <a href="https://theconversation.com/how-made-com-went-from-a-pandemic-era-business-superstar-to-a-failed-company-in-just-18-months-194323">collapses</a>, it does seem that physical stores are enjoying a small renaissance as people rediscover the pleasure of shopping “in real life”.</p><img src="https://counter.theconversation.com/content/200308/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leigh Sparks is Chair of Scotland's Towns Partnership</span></em></p>The rapid rise of online shopping is slowing but internet retail is here to stay.Leigh Sparks, Professor of Retail Studies and Deputy Principal, University of StirlingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1911492023-01-12T13:19:54Z2023-01-12T13:19:54ZConsumers often can’t detect fake reviews – and underestimate how many negative reviews might be fakes<figure><img src="https://images.theconversation.com/files/501162/original/file-20221214-14106-u73s9p.jpg?ixlib=rb-1.1.0&rect=42%2C8%2C5565%2C3724&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fake reviews of products and services are rampant online – and are often hard to pick out from the real ones.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/bad-rating-and-negative-reviews-concept-reputation-royalty-free-image/1271987935?phrase=online%20negative%20rating&adppopup=true">anyaberkut/iStock/Getty Images Plus via Getty Images</a></span></figcaption></figure><p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Consumers who have a personality that scores high in terms of openness – such as being open to new adventures and intellectually curious – have better success at spotting fake reviews than other personality types, according to <a href="https://doi.org/10.1108/JCM-04-2021-4597">our recently published research</a>. Extroverted people, on the other hand, tend to have a harder time identifying a fake review. </p>
<p>To reach these conclusions, we compiled reviews from a unique data set of 1,600 Chicago hotel reviews, marked as either fake or real, that was compiled by artificial intelligence engineer and researcher <a href="https://myleott.com/">Myle Ott</a> and his team for peer-reviewed research they <a href="https://doi.org/10.48550/arXiv.1107.4557">published in 2011</a> and <a href="https://aclanthology.org/D13-1199/">2013</a>.</p>
<p>Ott and colleagues mined real reviews from travel review websites such as Tripadvisor, Hotels.com and Expedia, which have a reasonably small deception rate. They gathered fake reviews by using Amazon Mechanical Turk to recruit people to write fake hotel reviews that sounded truthful.</p>
<p>We then used <a href="https://www.pewresearch.org/internet/2016/07/11/what-is-mechanical-turk/">Amazon Mechanical Turk</a> to recruit 400 participants and asked them to imagine they needed to choose a hotel for a planned trip to Chicago. Each participant was assigned a hotel, read eight reviews about it, guessed at which ones were fake and explained why they seemed fake or real. The eight reviews were a balanced set of two positive fake, two positive real, two negative fake and two negative real, shown in a randomized order. </p>
<p>Participants then answered questions that allowed us to assess where they rank in terms of the <a href="https://www.thomas.co/resources/type/hr-guides/what-are-big-5-personality-traits">big five personality types</a>: extroversion, agreeableness, openness, conscientiousness and neuroticism.</p>
<p>Overall, we found that consumers generally trust negative reviews more than positive ones. In evaluating whether an online review is genuine, consumers frequently underestimate the number of negative reviews that can be fake, while assuming that some positive reviews might be fake. </p>
<p>When we asked our participants why they thought a negative review was trustworthy, we found that they didn’t fully take into account that the writer might be motivated to post the review out of a desire to harm the business – for example, hostile competitors or angry customers. </p>
<p>We also found that readability, length and content affected perceptions of the review. Study participants were more likely to trust positive reviews when the sentences were short, and more likely to trust negative reviews when the sentences were long. </p>
<p>Shorter negative reviews with less emotional content were also more believable. </p>
<p>And in terms of personality type, while participants scoring high on openness were best at spotting fake reviews, and those with more extroversion did the worst, it was only for positive reviews. All personality types did pretty poorly at weeding out fake negative reviews. </p>
<h2>Why it matters</h2>
<p>Consumers consider online reviews to be among the <a href="https://doi.org/10.17705/1jais.00305">most important sources of information</a> for making buying decisions. However, according to <a href="https://www.which.co.uk/news/article/thousands-of-fake-customer-reviews-found-on-popular-tech-categories-on-amazon-agk4L2H5c96L">a 2019 report by Which?</a>, the U.K.’s consumer champion organization, many of these reviews on popular websites such as Amazon are fakes.</p>
<p>But consumers <a href="https://journals.sagepub.com/doi/10.1207/s15327957pspr1003_2">are consistently bad at detecting</a> fake reviews in their buying decisions.</p>
<p>Our research could help consumers become more aware of how they respond to reviews, especially negative ones.</p>
<h2>What still isn’t known</h2>
<p>Our research has identified certain features in the length, wording and structure of online reviews, as well as consumer personality types, that lead consumers to trust online reviews. We still don’t know why these features convey trustworthiness to consumers or why they differ for positive versus negative reviews.</p><img src="https://counter.theconversation.com/content/191149/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shabnam Azimi is an assistant professor of marketing, Quinlan School of Business, Loyola University of Chicago.</span></em></p>Online reviews have a big impact on buying decisions – but how can shoppers sort the real ones from the fakes?Shabnam Azimi, Assistant Professor, Loyola University ChicagoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1975852023-01-12T13:17:20Z2023-01-12T13:17:20ZCost of living crisis: why it’s been a happy new year for UK retailers keeping up with changing shopping trends<figure><img src="https://images.theconversation.com/files/504064/original/file-20230111-17-h347hg.jpg?ixlib=rb-1.1.0&rect=0%2C1%2C998%2C664&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Several UK retailers announced better than expected sales over the Christmas period.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/black-woman-buying-goods-grocery-store-1612161790?showDrawerOnLoad=true">Nejron Photo/Shutterstock</a></span></figcaption></figure><p>The <a href="https://theconversation.com/tis-the-season-to-spend-spend-spend-or-so-retailers-would-have-us-think-34880">significance of Christmas to retailers’ bottom lines</a> means that updates on trading during this time are always closely watched. This year, the <a href="https://theconversation.com/global-economy-2023-how-countries-around-the-world-are-tackling-the-cost-of-living-crisis-196740">cost of living crisis</a> has weighed heavily on shops. As well as inflation (especially in food), energy, pay and other cost pressures on retailers, transport and postal strikes and the ongoing impact of Brexit also caused concern in the run-up to Christmas 2022 that <a href="https://www.economicsobservatory.com/christmas-and-the-cost-of-living-crisis-how-will-retailers-cope">the retail losers would far outweigh the winners</a>.</p>
<p>But results – particularly among clothing and some non-food categories – have pointed to a more positive picture than anticipated before the festive period. British retail giant Next produced a downgraded estimate of annual profits last autumn, <a href="https://www.nextplc.co.uk/%7E/media/Files/N/Next-PLC-V2/documents/2023/trading-statement-jan-2023.pdf">but its Christmas trading update points to strong sales</a> – and in its stores more than on online. Budget store <a href="https://www.thegrocer.co.uk/finance/city-snapshot-bandm-hikes-profit-guidance-on-strong-pre-christmas-trading/674939.article">B&M also reported excellent Christmas trading figures</a> as did <a href="https://news.sky.com/story/next-christmas-sales-figures-far-exceed-expectations-12780212">retailers as diverse as</a> Boots, Greggs, <a href="https://www.retailgazette.co.uk/blog/2022/12/the-perfume-shop-christmas/#:%7E:text=The%20retailer%20sold%201.8%20million,and%20Thierry%20Mugler's%20Alien%20fragrances.">The Fragrance Shop</a>, <a href="https://www.reuters.com/world/uk/uks-card-factory-expects-fy-profit-beat-market-expectations-2023-01-10/">Card Factory</a>, <a href="https://www.theindustry.fashion/store-sales-boost-seasalt-christmas-trading/">Seasalt</a> and <a href="https://www.theretailbulletin.com/general-merchandise/oxfam-benefits-from-surge-in-christmas-sales-10-01-2023/">Oxfam</a>. </p>
<p><a href="https://www.kantar.com/uki/inspiration/fmcg/2022-wp-uk-grocery-price-inflation-fuels-first-ever-12-billion-christmas">Grocery shopping</a> figures for December showed stellar performances from Aldi and Lidl, while Iceland also did well. Market leader <a href="https://www.tescoplc.com/news/2023/3q-and-christmas-trading-statement-202223/">Tesco performed strongly</a> and Marks & Spencer produced <a href="https://corporate.marksandspencer.com/media/press-releases/marks-and-spencer-group-plc-christmas-20222023-trading-13-weeks-31-december">far better than expected results</a> in both food and non-food. In further good news, independent bookstore numbers are at <a href="https://www.theguardian.com/books/2023/jan/06/indie-bookshop-numbers-hit-10-year-high-in-2022-defying-brutal-uk-retail-year">a ten-year high</a>.</p>
<p>It is early days and there are more retailers to report, of course – certainly, the data for Morrisons and Waitrose showed comparatively poor Christmas sales numbers. Plus, several retailers, including online furniture shop Made and <a href="https://www.retailgazette.co.uk/blog/2023/01/mco-redundancies-continue/">clothing company M&Co</a>, did not survive 2022, while others such as homeware seller Wilko were <a href="https://www.theguardian.com/business/2023/jan/04/wilko-funding-hilco-cash-chair">forced to refinance</a> or had to be rescued like <a href="https://www.bbc.co.uk/news/business-63807159">clothing brand Joules</a> and McColl’s, the convenience shop operator that was <a href="https://www.retailgazette.co.uk/blog/2022/12/9-retailers-bust-2022/">bought by Morrisons</a> last year.</p>
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Read more:
<a href="https://theconversation.com/how-made-com-went-from-a-pandemic-era-business-superstar-to-a-failed-company-in-just-18-months-194323">How Made.com went from a pandemic-era business superstar to a failed company in just 18 months</a>
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<p>Retailer Christmas figures are also unaudited, focus on sales not profit and can cover different dates depending on the retailer. But, in general, results so far have been better than anticipated. This could be because consumers have started to change their habits in the following ways in response to the cost of living crisis.</p>
<h2>1. Searching for value</h2>
<p>The effects of inflation have caused more consumers to <a href="https://www.kantar.com/uki/inspiration/fmcg/2022-wp-uk-grocery-price-inflation-fuels-first-ever-12-billion-christmas">search for value</a>, causing many to switch to discount retailers and own-brand products, which are typically perceived as offering value. Some of the comparative sales increases over Christmas were due to rising prices and thus <a href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/november2022">while spending is up in total, the number of items bought is not</a>.</p>
<h2>2. Shop local</h2>
<p>The <a href="https://link.springer.com/article/10.1007/s12061-022-09494-8">impact of the pandemic</a>, combined with recent transport and postal service strikes have caused a switch to local spending. When pandemic restrictions were in effect, people explored their local areas and used local and independent retailers, something that has continued with working from home. Difficulties accessing some larger towns and cities by public transport and uncertainty over postal deliveries due to strikes has increased the importance of shopping local. </p>
<p><a href="https://www.retailgazette.co.uk/blog/2023/01/december-footfall/">Figures for December</a> show the highest footfall since the pandemic, with a notable bounce on high streets. Online retailing may have had a weaker Christmas boost than previous years because consumers wanted to visit stores, were uncertain about delivery and wanted to shop around for the best bargains.</p>
<h2>3. Buying with credit</h2>
<p>There is some evidence that people used <a href="https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/economicactivityandsocialchangeintheukrealtimeindicators/latest">credit cards</a> and <a href="https://www.bankofengland.co.uk/statistics/money-and-credit/2022/november-2022">savings</a> to ensure a good Christmas. The slowdown in the housing market, and the desire to reward ourselves during the first Christmas without pandemic restrictions for three years, combined to encourage those who could to make the effort to spend.</p>
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<img alt="Men wearing Christmas jumper/sweater and eyeglasses holding credit card and using smart phone, laptop, christmas present in foreground." src="https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/504073/original/file-20230111-21884-6hv7nr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Some shoppers put Christmas on their credit card in 2022.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/men-wearing-blue-sweater-eyeglasses-holding-746222053">Zivica Kerkez/Shutterstock</a></span>
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<p>With all this changing consumer behaviour, well-run retail businesses that manage their product offerings, supply chains and stock levels to hit the above “sweet spots” for consumer demand did well during Christmas 2022. Those who were less effective or perceived to be less consumer focused, suffered. </p>
<p>But there is also a clear and growing disparity among consumers. There is no doubt that, for many, last Christmas was a good one. But at the same time <a href="https://researchbriefings.files.parliament.uk/documents/CBP-9209/CBP-9209.pdf">record numbers of people are in food and fuel poverty</a>, and large numbers are really struggling to cover basics, with <a href="https://publichealthscotland.scot/media/16542/population-health-impacts-of-the-rising-cost-of-living-in-scotland-a-rapid-health-impact-assessment.pdf">consequent effects on health and wellbeing</a>.</p>
<h2>A uneven ride ahead</h2>
<p>And so, while more positive than expected figures many retailers should be welcomed, they probably mask future problems. Even in its upbeat Christmas results, Next pointed to possible price rises in the coming months and concerns about affordability, as has <a href="https://www.theguardian.com/business/2022/nov/09/m-and-s-faces-gathering-storm-as-joint-venture-with-ocado-makes-loss-marks-and-spencer">M&S previously</a>. Sainsbury’s, <a href="https://www.hospitalityandcateringnews.com/2023/01/inflation-prompts-greggs-to-increase-workers-pay-by-10/#:%7E:text=Bakery%20chain%20Greggs%20has%20increased,third%20time%20in%20a%20year.">Greggs</a> and Tesco are among retailers that have <a href="https://www.thesun.co.uk/money/19967034/shops-supermarkets-rates-pay-hour-rise-aldi-ms/">recently increased shopfloor wage</a> rates, reflecting a tight labour market but also reacting to the cost of living struggles of their staff.</p>
<p>Among these economic headwinds, however, there are indications that inflation should decline in 2023 and that energy prices may not rise as fast as predicted, or could even fall. The UK may also see <a href="https://www.thetimes.co.uk/article/the-end-is-finally-in-sight-for-interest-rate-rises-w5kwrj9gv">an end to recent interest rate rises</a> during this year.</p>
<p>In January 2022, the economy looked fairly stable, but got worse very quickly. Now in January 2023 the hope is that things will improve faster than anticipated. Any gains will be hard won. As the economy continues to adjust to the effects of COVID and Brexit, while also absorbing the cost of living crisis, further change in 2023 will not be spread evenly across all retailers, nor all shoppers.</p><img src="https://counter.theconversation.com/content/197585/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leigh Sparks is Chair of Scotland's Towns Partnership</span></em></p>UK retailers had a happier Christmas than expected, but consumers are changing how they shop due to the rising cost of living.Leigh Sparks, Professor of Retail Studies and Deputy Principal, University of StirlingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1893482022-12-19T16:23:57Z2022-12-19T16:23:57ZGen Z beauty brands can use ‘friendly’ chatbots to boost body image as well as sales, research shows<figure><img src="https://images.theconversation.com/files/498308/original/file-20221130-14-yjbbq9.jpg?ixlib=rb-1.1.0&rect=96%2C88%2C5170%2C3294&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some members of gen Z spend hundreds of pounds every year on makeup.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/top-view-young-teenage-girl-recording-2109862970">Anastasiia Vyshnevska / Shutterstock</a></span></figcaption></figure><p>Some members of “generation Z” – people <a href="https://www.pewresearch.org/social-trends/2020/05/14/on-the-cusp-of-adulthood-and-facing-an-uncertain-future-what-we-know-about-gen-z-so-far-2/">born after 1996</a>, the oldest of whom are turning 26 in 2022 – spend hundreds of pounds per year on <a href="https://www.pipersandler.com/teens">beauty products</a>. In fact, gen Z members are often more willing to spend on beauty and skincare products <a href="https://assets.ctfassets.net/inb32lme5009/7wDIuSsLOnSxTUqPmRb081/603b8ffb77757549d39034884a23743c/The_Youth_of_the_Nations__Global_Trends_Among_Gen_Z.pdf">than previous generations</a>. </p>
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<p>But research also shows that <a href="https://www.theseus.fi/bitstream/handle/10024/12465/dickman_christina.pdf;jsessionid=8B007CA9A5AC55D4F8861509D6B787C1?sequence=1">young women’s body image</a> is linked to cosmetics use. They often use beauty products to conceal perceived flaws or compensate for body parts they may not like. Members of gen Z are particularly plagued by <a href="https://www.glamourmagazine.co.uk/article/gen-z-least-confident-generation">negative perceptions of body image</a> and low self-esteem. This has been linked to <a href="https://wp.nyu.edu/dispatch/2019/04/09/marketing-to-gen-z-amid-social-media-panic/">the high use of social media</a> among this age group. </p>
<p>So, cosmetics companies that are trying to sell to this age group – as most of them are – should be mindful of these self-esteem issues, particularly where makeup purchases are involved. Research I conducted with colleagues shows they can incorporate this awareness into the technology tools they offer shoppers – in particular, the new breed of “beauty chatbots” – in order to help boost body confidence while also making sales.</p>
<h2>Beauty tech</h2>
<p>Cosmetics brands often use <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/mar.21699">cutting-edge technology</a> to sell their wares. Companies such as <a href="https://graziamagazine.com/me/articles/mac-cosmetics-launches-augmented-reality-makeovers/">Mac</a>, <a href="https://www.retaildive.com/ex/mobilecommercedaily/sephora-tries-on-augmented-reality-update-for-real-time-facial-recognition">Sephora</a> and <a href="https://www.cosmeticsdesign-europe.com/Article/2022/07/12/L-Oreal-patents-makeup-artist-virtual-makeup-app-for-Augmented-Reality-images-and-video-streaming#:%7E:text=International%20beauty%20major%20L'Or%C3%A9al,services%20and%20image%20sharing%20platforms.">L’Oréal</a> all use tech including artificial intelligence, augmented reality and data analytics to help customers discover and choose new makeup these days. </p>
<p>In particular, augmented reality has been used to develop <a href="https://www.sciencedirect.com/science/article/pii/S0747563220302983">virtual try-on tools</a> that help online shoppers test makeup online to see how it looks, based on things like skin type and hair colour, before buying. Research shows this experience supports people’s <a href="https://www.sciencedirect.com/science/article/pii/S0148296318305228">existing perception of their body image</a>, whether those perceptions are positive or negative.</p>
<p>Alongside such tools, <a href="https://theconversation.com/the-chatgpt-chatbot-is-blowing-people-away-with-its-writing-skills-an-expert-explains-why-its-so-impressive-195908">chatbots</a> are often used by makeup brands to support online shopping. As an AI-powered online sales assistant, a chatbot can communicate with shoppers via a small box on-screen, into which a person can type questions or answers while they’re browsing a website. This allows makeup buyers to interact with brands through <a href="https://chatbotsmagazine.com/how-chatbot-helps-businesses-improve-customer-service-121530ebe60f">online conversations</a>.</p>
<p>Around 80% of <a href="https://www.servicebell.com/post/chatbot-statistics#:%7E:text=How%20many%20companies%20are%20using,rely%20on%20a%20small%20number.">companies worldwide use chatbots</a>, and they can also be a way to <a href="https://www.sciencedirect.com/science/article/pii/S0747563220302983">collect data</a> about site users.</p>
<p>Two of the benefits of using chatbots are the ability to personalise interactions with customers – such as when they are using virtual try-on tools – and to automatically <a href="https://www.sciencedirect.com/science/article/pii/S0747563220302983">offer relevant products and services</a>. Of course, any salesperson knows the power of personality when it comes to enticing shoppers to buy, but can chatbots charm in the same way? </p>
<h2>Friendship goals</h2>
<p>Our research analysed how <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/mar.21715">experiences of using various cutting-edge technologies</a> when shopping for beauty products affect body image, self-esteem and purchase behaviour among younger females. Our data was collected from three studies, a survey and two experiments involving 1,568 gen Z women. </p>
<p>While these tools are designed to provide a better customer experience, our research shows there are benefits to programming chatbots to be “friendlier”.</p>
<p>The majority of cosmetics brands currently offer chatbots with two types of personality: friend or assistant. Assistant types offer intelligent, factual and organised support and information in response to customer enquiries. But chatbots that also have friend‐like characteristics – such as being sassy, perky and humorous – encourage stronger feelings of warmth.</p>
<p>We found that, for women in this age group, receiving support from a chatbot in the form of a “virtual friend” can have a more positive effect on their body image and self-esteem. The type of communication used by these chatbots was characterised by our respondents as being helpful, nice and friendly. The findings also show that that chatbots with these characteristics positively affected participants’ self-esteem and buying behaviour when using beauty brands’ virtual applications. </p>
<h2>Sales boost</h2>
<p>As well as improving gen Z women’s interactions with virtual makeup try-on applications, friendlier chatbots can encourage people to buy more as well. We found that purchase behaviour was stronger when the gen Z women in our study had conversations with chatbots that they categorised as being helpful, nice and friendly. </p>
<p>But beauty brands that offer chatbot services can create benefits beyond increasing sales and improving customer relationships. They can also boost shoppers’ body image – an important benefit for gen Z beauty-lovers.</p>
<p>Brands should keep this in mind when choosing the style of language used by their chatbots. Using a more personalised, conversational style when interacting with young female customers will not just increase sales, it could also boost their body confidence.</p><img src="https://counter.theconversation.com/content/189348/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nisreen Ameen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Boosting body confidence should be as important as boosting sales to beauty brands.Nisreen Ameen, Senior Lecturer in Digital Marketing, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1957622022-12-15T15:56:21Z2022-12-15T15:56:21ZShopping: how retailers are using the latest technology to boost in-store spending<figure><img src="https://images.theconversation.com/files/500693/original/file-20221213-3574-jsfo2z.jpg?ixlib=rb-1.1.0&rect=78%2C78%2C7358%2C4738&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Smart shopping.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/futuristic-technology-concept-girl-try-use-1478264060">Shutterstock/Fit Ztudio</a></span></figcaption></figure><p>Your online world is probably full of adverts persuading you to buy something with a simple touch of your phone. But away from those personal screens, UK retailers are <a href="https://www.trade.gov/country-commercial-guides/united-kingdom-ecommerce">actually spending most</a> of their digital budgets inside their traditional bricks and mortar shops. </p>
<p>For in-store marketing tools have moved far beyond brightly coloured signs and piped music towards a rapidly developing set of technological techniques designed to help you spend. </p>
<p>One of these involves actively encouraging you to use your phone while you are in a shop by providing free wifi, using QR codes, or sending you ideas on social media. This might sound strange – surely retailers don’t want you to be looking at your screen when you could be looking at what’s on their shelves? </p>
<p>In fact, <a href="https://journals.sagepub.com/doi/10.1509/jm.17.0277">our research</a> suggests that consumers being distracted can be quite profitable. Customers who used their phones in-store ended up spending 40% more than those who didn’t. </p>
<p>We found that phone use had a considerable effect on consumers’ mental state, distracting people to such an extent that they are not fully aware of their immediate surroundings. (This is why using a phone when driving is so dangerous.) </p>
<p>The shoppers who had been on their phones turned out to be three times more likely to go back to a part of the store they had already browsed and left. After engaging with a personal screen, they effectively started their shopping all over again – a bit like hitting the “refresh” button on their spending experience. </p>
<p>From a retailer’s point of view then, every time you use your phone and put it away, it is as if you have just walked in.</p>
<h2>Screen time</h2>
<p>Shops will also use their own digital screens to showcase their products (often several at the same time) in use. In <a href="https://link.springer.com/article/10.1007/s11747-019-00697-z">one study</a> we saw how shoppers were more inspired (to make a purchase) if they saw a short film of a product in use, than if they saw the same item in a still image. This could be footage of a recipe being made from a range of groceries, for example, or furniture displayed in a home setting. </p>
<p>Seeing products actually being used seems to add an extra dimension that shoppers find appealing. It even makes them more likely to buy multiple items to match what is being portrayed on the screen – a new pan with a new set of utensils for instance, or a sofa plus the cushions and the side table. </p>
<p>Personal selling is another powerful tool in retailing, with <a href="https://www.sciencedirect.com/science/article/abs/pii/S0969698912001014?via%3Dihub">studies showing</a> that handing out samples of tasty grocery products can increase sales by as much as 3,500%. This comes at a price, however, with much of the increased revenue being swallowed up by staffing costs. </p>
<p>So why not digitise personal selling? As part of our work, we ran an experiment which used a large vertical screen showing a recording of a person in front of the free samples. The results revealed that as much as 80% of the sales increase remained, even when the actual person was absent. </p>
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<p>This idea can be developed further using a hologram or multi-sensory “mixed reality” display, when a digital scene is projected onto the real-life physical world. <a href="https://www.sciencedirect.com/science/article/pii/S0022435922000446?via%3Dihub">Our study</a> on this showed that shoppers related well to a product to an increased extent when it had been projected in front of them. </p>
<p>In the test, we fitted sophisticated projectors to the ceiling over the ends of supermarket aisles, which then provided customers with a laser-show-style film, combined with sounds and even smells. For instance, the film might be of a pasta recipe being made, with accompanying sounds of chopping and frying, and the aroma of a tomato sauce being cooked.</p>
<p>The visual stimulus alone boosted sales by over 60% for the products on show. Adding the sounds and scents increased this even more.</p>
<h2>Digital days</h2>
<p>All of these digital devices in a physical store contribute to what we refer to as “experiential retailing”. The idea is to help the shopper see a product in use rather than just on a shelf, and also to make the whole shopping situation more pleasurable. </p>
<p>So, whenever you go shopping, expect the physical store to have ever more digital elements which are there to inspire and assist – but also nudge you towards more purchases. </p>
<p>And don’t discount the effect of that piped music either. <a href="https://www.sciencedirect.com/science/article/abs/pii/S0148296304002000?via%3Dihub">Studies have shown</a> that music increases a store’s total sales by around 3% at Christmas time. The effect is more pronounced if the music is mood-enhancing – so if you feel happy when you hear a shop’s chosen playlist, you’ll probably spend more money while you sing along.</p><img src="https://counter.theconversation.com/content/195762/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jens Nordfält has previously received funding from the Hakon Swenson Research Foundation and the Swedish Retail and Whole Council. </span></em></p>Digital retail is not just about buying online.Jens Nordfält, Professor of Management, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1947852022-11-23T16:57:07Z2022-11-23T16:57:07ZWhy Primark’s new click and collect service will not be a simple win for the fast fashion giant<figure><img src="https://images.theconversation.com/files/496570/original/file-20221121-15-z4vsqt.jpg?ixlib=rb-1.1.0&rect=378%2C135%2C5956%2C4161&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shoppers visiting Primark.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/motion-blur-people-walking-shopping-primark-672453790">fokke baarssen / Shutterstock</a></span></figcaption></figure><p>Primark fans in the UK struggled to get their first online fast fashion fix from the Irish retailer recently. Its <a href="https://www.bbc.co.uk/news/business-63598525">website crashed</a> on the day it launched a “<a href="https://corporate.primark.com/newsroom/corporate-news/primark-goes-online-with-click-collect/n/d822044a-5107-4dae-95b1-b339ea6c971c">click and collect</a>” service to allow people to buy certain items online for collection in-store. </p>
<p>But, despite its initial popularity, Primark is only conducting a limited trial of this model. This is a smart move given the outlook for <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/articles/whatactionsarepeopletakingbecauseoftherisingcostofliving/2022-08-05">reduced spending patterns</a> due to the cost of living crisis. </p>
<p>Similar moves have certainly had mixed results for other companies in recent years. The strategy worked for low-price US store Target, which claimed <a href="https://investors.target.com/news-releases/news-release-details/target-provides-update-holiday-sales#:%7E:text=Drive%20Up%20grew%20more%20than%20500%20percent">sales soared by more than 500%</a> when it offered click and collect during the 2020-21 holiday season. </p>
<p>On the other hand, low-cost supermarket <a href="https://www.thesun.co.uk/money/12915254/lidl-axes-plans-launch-online-shopping-delivery/">Lidl abandoned its attempt</a> at click and collect in the UK in 2020, although its competitor Aldi has so far <a href="https://www.aldipresscentre.co.uk/business-news/aldis-christmas-click-collect-slots-now-available/">stuck with its version</a>. Indeed, it’s almost expected of a modern retailer to sell both online and in physical stores, but Primark’s click and collect strategy is not a straightforward website offering. </p>
<p>As well as only being offered at 25 of its <a href="https://www.primark.com/en-gb/about-us">191 UK locations</a>, some of the 2,000 children’s items on offer via the service are not available in the stores themselves. This is a canny product area to trial, however, since parents of fast-growing kids navigating a cost of living crisis may well want cheap clothing for school and play.</p>
<p>Primark’s click and collect service does not allow customers to relax at home while their shopping is delivered to their doors. But it does mean shoppers can make sure certain desired items are available when they travel to the store. “Stock check” features typically cannot guarantee this because inventory is often wrong.</p>
<p>A click and collect model offers several other advantages to sellers: </p>
<ul>
<li>It saves both the business and its customers from paying for postage on returns, with <a href="https://www.ecrloss.com/research/buy-online-return-in-store">our research showing</a> that, although such services create additional costs due to returns, having customers return items to a shop is more cost effective for the retailer.</li>
<li>Less packaging is needed because items do not have to survive one or more trips through the post – a company might claim that this is environmentally friendly but it also reduces the costs involved.</li>
<li>Customers might pick up additional items when collecting or returning click and collect items.</li>
<li>When customers click, collect and return to the shop, research shows there are <a href="https://www.sciencedirect.com/science/article/pii/S0969698922002387">less opportunities for customer fraud</a> compared to other online sales models.</li>
</ul>
<h2>Hidden click and collect risks</h2>
<p>But click and collect is not problem free. A major headache for retailers offering this kind of service is making sure stock is available to meet demand in the specific shops for which click and collect is available. </p>
<p>This avoids racking up transport costs or disappointing too many customers. In the US, <a href="https://www.sailthru.com/marketing-blog/target-curbside-pickup-experience/#:%7E:text=Target%20managed%20expectations">Target manages online customer expectations</a> with emails and texts that aim to avoid disappointment and suggest alternatives.</p>
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<strong>
Read more:
<a href="https://theconversation.com/fashion-retailer-primark-is-refusing-to-sell-online-heres-why-it-is-right-to-do-so-153511">Fashion retailer Primark is refusing to sell online – here's why it is right to do so</a>
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<p>A click and collect retailer also risks hidden costs and damages relating to returns. When people “click but don’t collect”, shops are left with items on backroom shelves. This requires administrative and logistical effort to arrange refunds and return products to warehouses or other stores where they may have more chance of being sold. </p>
<p>People might also “click lots and only keep one item (or none)”. This can happen when shoppers order several sizes or colours to try on and return the rest before leaving the shop. Again, this could saddle the retailer with extra costs and little associated income. And these days, the rising cost of living could create choosier shoppers. </p>
<p>Given the many risks involved with this kind of scheme, starting with a limited service is sensible. Primark can then gauge if returns – a major cost area relating to click and collect – could wipe out any additional profits it might make with this new venture. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-hidden-costs-of-online-shopping-for-customers-and-retailers-109694">The hidden costs of online shopping – for customers and retailers</a>
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<h2>Managing returns</h2>
<p>While having customers return items to its shops will be more cost effective for the business than postal returns, this pilot will help Primark work out if it can keep the overall rate of returns and its costs down. It will also be able to weigh up the benefits of additional impulse buys while click and collect customers are in the shop, versus the cost of staff time taken up with order disputes and returns. </p>
<p>But offering an online-only product range means items returned to store will not necessarily be resold from there. Instead, returns could be sent back to the warehouse for processing. And this is where the real test for Primark’s new online model lies: can it afford the cost of returns? </p>
<p>If the company expands this service to all of its stores and offers other routes to returning goods, it is likely to find itself in the same situation as some mid-range shops recently. The scale of returns affected bottom-line profits for some businesses and created the need for separate returns distribution centres or to <a href="https://www.which.co.uk/news/article/how-to-avoid-paying-zaras-new-1.95-returns-charge-aW4qW6I5oBPc">charge for postal returns</a>.</p>
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<img alt="Smiling woman with blonde hair lifts two large Primark paper bags from a counter of a Primark shop." src="https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/496571/original/file-20221121-14-dysy43.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Primark is letting shoppers order some items online for collection in certain UK shops.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/enschede-netherlands-aug-19-2014-people-234495628">Robert Hoetink / Shutterstock</a></span>
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<p>Of course, there are also environmental implications when any fast fashion empire attempts to boost sales. Many mixed-fibre textiles sold by such retailers are difficult to recycle. While good quality textiles often get re-gifted, resold or donated, cheaper items may simply end up in <a href="https://www.aljazeera.com/gallery/2021/11/8/chiles-desert-dumping-ground-for-fast-fashion-leftovers">landfill in developing countries</a>.</p>
<p>Primark has also argued that this move is about <a href="https://www.bbc.co.uk/news/av/business-63587132">“believing” in the high street</a>. But this is not a completely altruistic move. It is a strategy to get shoppers into stores to buy more, without <a href="https://www.bbc.co.uk/news/business-63598525">taking on the costs</a> of major IT upgrades for customer and inventory management.</p>
<p>Managing such operational risks while navigating the ongoing kickback against <a href="https://www.wearthlondon.com/blog/what-is-fast-fashion-and-why-is-it-bad/">fast fashion</a> – albeit countered by egalitarian claims for <a href="https://www.economist.com/taxonomy/term/76969?page=113&page%5Cu003d78=">making clothes affordable for all</a> – makes click and collect a much more complex proposition than it might appear to be on the surface.</p><img src="https://counter.theconversation.com/content/194785/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lisa Jack is an academic advisor to the ECR Retail Loss Group (<a href="http://www.ecrloss.com">www.ecrloss.com</a>). Primark is a member of ECR but did not pay or contribute towards the underlying research for this article.</span></em></p><p class="fine-print"><em><span>Regina Frei receives funding from the UK Economic and Social Research Council (grant reference ES/V015605/1). </span></em></p>By offering a limited click and collect service, the retailer can gauge the benefits versus the costs and hassle of managing product returns.Lisa Jack, Professor of Accounting, University of PortsmouthRegina Frei, Associate Professor in Operations and Supply Chain Management, University of SouthamptonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1933012022-10-27T01:16:50Z2022-10-27T01:16:50ZDrone delivery is a thing now. But how feasible is having it everywhere, and would we even want it?<figure><img src="https://images.theconversation.com/files/492012/original/file-20221027-23886-7u3iex.jpeg?ixlib=rb-1.1.0&rect=8%2C238%2C2982%2C2007&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Wing</span></span></figcaption></figure><p>In recent years, cafes, supermarkets and online shops have started to trial drone delivery in a handful of locations around the world. More than a <a href="https://builtin.com/drones/drone-delivery-companies">dozen drone delivery companies</a> are now running such trials.</p>
<p>Just this week, Wing (owned by Google’s parent company Alphabet) announced a partnership with Australian supermarket giant Coles to <a href="https://www.abc.net.au/news/2022-10-26/qld-supermarket-drone-delivery-available-gold-coast-/101573808">deliver small items via drone to customers close to a Gold Coast supermarket</a>. Wing is already operating in parts of Canberra and Logan, Queensland. </p>
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<p>Given the technical success of various trials so far, it is worth exploring whether drone delivery might become mainstream and can actually be scaled up geographically.</p>
<p>As you would expect, the answer is “it depends”. There are many issues when considering drones around people, such as safety and infrastructure. For example, a recent <a href="https://www.abc.net.au/news/2022-09-30/food-delivery-drone-lands-on-power-lines-qld-browns-plains/101489670">crash of a delivery drone on electricity lines</a> in a suburb of Logan left thousands without power.</p>
<p>There is also potential <a href="https://theconversation.com/drones-to-deliver-incessant-buzzing-noise-and-packages-116257">unwanted noise</a> and visual pollution, and a perceived issue around privacy.</p>
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Read more:
<a href="https://theconversation.com/privatising-the-sky-drone-delivery-promises-comfort-and-speed-but-at-a-cost-to-workers-and-communities-166960">Privatising the sky: drone delivery promises comfort and speed, but at a cost to workers and communities</a>
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<h2>Safety first</h2>
<p>Adding potentially dozens of small aircraft to the sky above our homes, workplaces and roads each day is a serious business. As you would hope, currently the operation of commercial drones is a highly regulated undertaking in most countries. </p>
<p>In Australia, the Civil Aviation Safety Authority <a href="https://www.casa.gov.au/drones/industry-initiatives/drone-delivery-services">has strict regulations</a> that aim to make the operation of drones as safe as possible. They also <em>prohibit</em> drone use if the craft can’t be used safely in a given situation.</p>
<p>In fact, Australia was one of the first countries to have drone regulations. For example, you cannot fly a drone close to an airport, or directly over people.</p>
<p>Commercial operators of drones are acutely aware of this and gain a licence to operate – it is not in anyone’s interest to operate unsafely, and it would be bad for business.</p>
<h2>A limited geographic market – for now</h2>
<p>To satisfy the requirement of operating drones safely, delivery operators focus on flying drones over unpopulated land, generally very low-density areas, and in particular the urban fringe. These are newer suburbs where drone flight paths can be planned to eliminate or minimise safety issues, such as an unexpected crash. </p>
<p>It is no coincidence Wing has been running drone delivery trials in low-density areas of Southeast Queensland, and outer <a href="https://www.canberratimes.com.au/story/6009932/wings-delivery-drone-service-gets-the-green-light/">Canberra suburbs</a>. These places are ideal for drone delivery and a great place to continue to develop this business, even if the <a href="https://www.abc.net.au/news/2021-12-11/wing-resumes-drone-deliveries-after-raven-attacks/100689690">odd bird attack can disrupt things</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1442603431672225796"}"></div></p>
<p>But drone delivery in dense parts of major cities? This is very unlikely in the medium term, due to extreme difficulty in safely operating drones in dense suburbs.</p>
<p>If you live in an apartment building, where would the delivery take place? On the roof? Maybe, if your building was set up for it. This is where scaling up faces the largest difficulties, and the logistics of running potentially hundreds of drones from a distribution centre become truly challenging.</p>
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<figcaption><span class="caption">Zipline and Walmart team up for drone delivery.</span></figcaption>
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<p>However, if there was a high demand for it, and the right investments were made, it is feasible that drone delivery to dense city areas could be achieved.</p>
<p>But just because it might be technically possible, doesn’t mean it <em>will</em> happen. The long-term business case would need to make sense, of course. But there is a more critical issue in the near term – the <a href="https://ethics.org.au/ethics-explainer-social-license-to-operate/">social licence to operate</a>.</p>
<h2>A social licence</h2>
<p>A social licence is not an official thing, a government body does not issue one. It is more about whether the general public accepts and supports the new thing.</p>
<p>At the end of the day, this social acceptance is what often determines the success or failure of widespread uptake of new technology, such as delivery drones. </p>
<p>Take nuclear power, for example. Many countries have nuclear power and the public there seem happy with that. Other countries had a social licence for nuclear power and lost it, such as Japan. In Australia we do not have a social licence for nuclear power, but that does not mean we won’t gain it in the future. </p>
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Read more:
<a href="https://theconversation.com/from-divestments-to-protests-social-licence-is-the-key-33576">From divestments to protests, social licence is the key</a>
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<p>A social licence is an ever-evolving construct based on the pros and cons of a technology, all of which is influenced by its perceived value. Most people are now seemingly comfortable to be tracked 24 hours a day by their smartphones, as they believe the benefits outweigh the potential negative impacts.</p>
<p>It is likely we already have a solid social licence to use drones to <a href="https://www.nature.com/articles/d41591-022-00053-9">deliver emergency life-saving medicine</a> to people in need. In a potential life-or-death situation like that, it is easy to see that normally the benefits outweigh any risks or inconvenience to others.</p>
<p>But delivering a coffee or a tube of toothpaste by drone? I think the social licence for that is up for grabs. At this point in time, it could go either way.</p><img src="https://counter.theconversation.com/content/193301/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonathan Roberts is Director of the Australian Cobotics Centre, the Technical Director of the Advanced Robotics for Manufacturing (ARM) Hub, and is a Chief Investigator at the QUT Centre for Robotics. He receives funding from the Australian Research Council. He was the co-founder of the UAV Challenge - an international drone competition.</span></em></p>In a few Australian suburbs, a cup of coffee or toothpaste can now arrive via the air. But that doesn’t mean drones are going to be widespread – for now.Jonathan Roberts, Professor in Robotics, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1893462022-09-06T17:25:50Z2022-09-06T17:25:50ZGen Z smartphone addiction can boost compulsive buying – but businesses can help them kick the shopping habit<figure><img src="https://images.theconversation.com/files/482270/original/file-20220901-19-drhz6r.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C2837%2C1783&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Gen Z smartphone addiction can support compulsive buying habits. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/group-fashion-friends-watching-on-their-1254124996">AlessandroBiascioli / Shutterstock</a></span></figcaption></figure><p>People born between the mid-1990s and early 2010s – so-called <a href="https://www.mckinsey.com/%7E/media/McKinsey/Industries/Consumer%20Packaged%20Goods/Our%20Insights/True%20Gen%20Generation%20Z%20and%20its%20implications%20for%20companies/Generation-Z-and-its-implication-for-companies.ashx">generation Z</a> – face many financial challenges, from <a href="https://www.theguardian.com/business/2022/jun/08/average-uk-house-price-hits-record-but-market-starts-to-cool">more expensive housing</a> to <a href="https://fullfact.org/economy/how-have-wages-changed/">lower wages</a>. Many are already delaying life plans such as buying a home and saving for <a href="https://www.fool.com/the-ascent/personal-finance/articles/is-gen-z-facing-a-financial-crisis-heres-what-the-data-says/">retirement</a> as a result. But recent research on the connection between smartphone addiction and compulsive buying behaviour in this age group shows the potential for even more financial damage. </p>
<p>Gen Z makes up <a href="https://www.schroders.com/de/ch/wealth-management/insights/markte/what-investors-need-to-know-about-gen-z/">a third</a> of the global population and is estimated to spend <a href="http://www.millennialmarketing.com/wp-content/uploads/2018/01/Barkley_WP_GenZMarketSpend_Final.pdf">US$143 billion</a> (£124 billion) annually, as well as having a significant influence on <a href="https://www.researchandmarkets.com/research/94jvqr/generation_z_as?w=12">family spending</a>. Members of gen Z also often share some unique financial characteristics. For example, they are <a href="https://www.aecf.org/blog/what-are-the-core-characteristics-of-generation-z">financially minded</a>, worry about their future prospects and have an <a href="https://www.oxford-royale.com/articles/7-unique-characteristics-generation-z/">entrepreneurial mindset</a>. </p>
<p>Having grown up using the internet and digital technologies, this age group also tends to be online a lot more than others. In fact, some <a href="https://99firms.com/blog/generation-z-statistics/#gref">research shows</a> 55% of gen Z use their smartphones for five or more hours a day and 31% feel uncomfortable if they are without their phone even for 30 minutes or less. Besides being a primary vehicle for social interaction, smartphones are also an <a href="https://www.accenture.com/t00010101T000000Z__w__/gb-en/_acnmedia/PDF-44/Accenture-Retail-Customer-Journey-Research-2017-Infographic.pdf#zoom=50">increasingly popular way</a> for this generation to shop. </p>
<p>Such extensive reliance on phones could be interpreted as unhealthy and smartphone addiction among gen Z has previously been shown to cause various mental health problems such as stress and <a href="https://onlinelibrary.wiley.com/doi/10.1002/smi.2805">anxiety</a>, as well as being related to <a href="https://www.sciencedirect.com/science/article/pii/S0747563215300169">escapism</a>. <a href="https://www.sciencedirect.com/science/article/pii/S0747563222002266">New research</a> I conducted with colleagues also shows smartphone addiction among this generation of consumers is strongly related to compulsive buying behaviour. </p>
<p>Compulsive buying is an addiction associated with guilt, harm and a repetitive urge to buy goods that may be inexpensive and useless. These purchases are usually made without considering the financial consequences, which is troubling in normal times but particularly when consumer prices in the UK are expected to rise by <a href="https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/august-2022">more than 13%</a> this winter.</p>
<h2>Mood management</h2>
<p>The data for our research was collected via a survey of students aged between 18 and 24 years enrolled in high schools and universities. The <a href="https://www.sciencedirect.com/science/article/pii/S0747563222002266">findings suggest</a> there are two factors that enhance the connection between smartphone addiction and compulsive buying behaviour in this age group. </p>
<p>First, young people with smartphone addiction may use these devices to manage unpleasant <a href="https://www.iihs.edu.lk/pluginfile.php/18502/mod_resource/content/1/emotions.pdf">moods</a> and deal with negative emotions. Second, we found this can lead a person into a “<a href="https://psycnet.apa.org/record/2000-12701-000">flow state</a>”, which means they are totally absorbed in an activity – in this case, browsing on their phone. They experience pleasant feelings and lose track of time. </p>
<p>Compulsive buyers also experience a short-term improvement in their mood as they make a purchase, which acts as a positive reinforcement and encourages them to continue buying. Further, online shopping allows people to buy things without using cash and remain hidden from the scrutiny of others. These features may also trigger compulsive buying behaviour. </p>
<p>What this all means is that smartphones can be a very easy way for Gen Z’s compulsive buyers to satisfy an uncontrollable urge to shop. So what can be done to help them save their money for their financial futures?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/482274/original/file-20220901-23-k5pnkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Online retailers can take action to help prevent compulsive buying.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/new-normal-social-distancing-concept-view-1891125859">Fit Ztudio / Shutterstock</a></span>
</figcaption>
</figure>
<h2>Possible solutions</h2>
<p>Gen Z customers with compulsive buying behaviour need help to kick this habit, particularly in the current economic downturn. This help could take many forms. Public institutions, especially those involved in education, could develop ad hoc programmes aimed at educating people about the risks related to smartphone addiction. </p>
<p>As well as compulsive buying, it can affect performance at <a href="https://www.sciencedirect.com/science/article/pii/S2352853217300159">work</a> and <a href="https://www.sciencedirect.com/science/article/pii/S2451958821000622">school</a>. Proper financial education should also be standard for this generation, not to mention every other age group. </p>
<p>But what about companies themselves? It may seem ridiculous to expect a retail firm to sacrifice a boost in sales from smartphone-fuelled compulsive buying, but this could be an opportunity for socially responsible action. </p>
<p>For example, retailers could develop algorithms to identify Gen Z consumers with compulsive buying behaviour, remove them from shopping newsletters or introduce a limit on spendable money in a certain time frame. Such targeted action by online stores and brands could boost these companies in the eyes of consumers that <a href="https://www.tandfonline.com/doi/full/10.1080/1331677X.2018.1547202#:%7E:text=Specifically%2C%20CSR%20creates%20value%20for,ethical%20aspects%20of%20consumer%20need.">increasingly value</a> corporate social responsibility. </p>
<p>The cost of living is already a <a href="https://www2.deloitte.com/content/dam/Deloitte/global/Documents/deloitte-2022-genz-millennial-survey.pdf">major concern</a> for Gen Z. Implementing some ethical and socially responsible marketing to reduce the risks of compulsive buying and spread a culture of responsible spending could address some of the economic uncertainty currently faced by members of this generation.</p><img src="https://counter.theconversation.com/content/189346/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nisreen Ameen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent research highlights the links between Gen Z smartphone addiction and compulsive buying.Nisreen Ameen, Senior Lecturer in Digital Marketing, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1852422022-06-21T13:32:09Z2022-06-21T13:32:09ZLove Island and eBay: how the reality show could model a radically sustainable future for its young viewers<figure><img src="https://images.theconversation.com/files/469796/original/file-20220620-24-vt8on1.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6687%2C4194&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Love Island has faced past criticism for not promoting sustainable lifestyles.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com">Shutterstock</a></span></figcaption></figure><p>A <a href="https://www.itv.com/presscentre/press-releases/ebay-becomes-love-islands-first-ever-pre-loved-fashion-partner">recently announced</a> partnership between ITV reality show Love Island and secondhand e-commerce giant eBay sends a strong positive signal about prioritising sustainability over fast fashion. </p>
<p>After receiving a strong backlash against Love Island’s promotion of fast fashion brands such as <a href="https://www.isawitfirst.com/">I Saw It First</a> and <a href="https://www.missguided.co.uk/">Missguided</a>, the show’s executive producer, Mike Spencer, has announced it’ll be working with eBay in 2022 to clothe participants in its current series with “preloved” garments.</p>
<p>Love Island boasts huge audience ratings among young people. Some <a href="https://yougov.co.uk/topics/entertainment/articles-reports/2019/07/29/what-kind-person-watches-love-island">43%</a> of Love Island viewers are under 30, and 16-34 year-olds made up <a href="https://www.itvmedia.co.uk/making-an-impact/love-island-launch-peaks-with-30-million-viewers-tv-overnights">one-third of viewers</a> of the series premiere on June 6. So the show has the power to influence young people’s <a href="https://theconversation.com/love-island-ditches-fast-fashion-how-reality-celebrities-influence-young-shoppers-habits-183771">shopping habits</a>, largely through the official Love Island app where viewers can “shop the show” to find beauty and fashion items promoted by contestants. Producers hope that by linking viewers to eBay – where they’ll find a curated selection of “<a href="https://www.ebay.co.uk/b/Love-Island-Official-Looks/bn_7118520194">Islander-inspired</a>” outfits – they’ll be encouraged to buy secondhand instead.</p>
<figure class="align-center ">
<img alt="A close up image of the Love Island app icon alongside other apps on a smartphone" src="https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/469783/original/file-20220620-18-694crv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">App partnerships allow viewers to buy styles similar to those seen on screen.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/stone-staffordshire-united-kingdom-july-2-1440369578">Shutterstock</a></span>
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</figure>
<p>This is a <a href="https://theconversation.com/love-island-ditches-fast-fashion-how-reality-celebrities-influence-young-shoppers-habits-183771">small step</a> in the right direction towards making sustainable lifestyles more accessible and fun. But more needs to be done in order to shift the pervasive association between popular culture and consumerism.</p>
<h2>Attracting sustainable consumers</h2>
<p>Love Island and its <a href="https://www.independent.co.uk/life-style/fashion/molly-mae-hague-pretty-little-thing-love-island-b1909069.html">influential contestants</a>, including PrettyLittleThing creative director <a href="https://graziadaily.co.uk/celebrity/news/molly-mae-pretty-little-thing-fashion-week/">Molly-Mae Hague</a>, are known to <a href="https://theconversation.com/love-island-ditches-fast-fashion-how-reality-celebrities-influence-young-shoppers-habits-183771">drive fashion trends</a>. In previous years, online fashion sales have grown by <a href="https://www.reuters.com/article/britain-entertainment-climate-fashion-idUSL8N2Y13F7">more than one-tenth</a> during the eight-week summer period when the show airs. Early insights suggest this year will be no different, with eBay searches for dresses similar to those seen on contestants up by as much as <a href="https://www.independent.co.uk/extras/indybest/fashion-beauty/womens-clothing/love-island-2022-ebay-partnership-contestants-b2098165.html">200%</a>. </p>
<p>Sustainability advocates, including former Love Island contestant, model and fashion influencer <a href="https://www.reuters.com/article/britain-entertainment-climate-fashion-idUSL8N2Y13F7">Brett Staniland</a>, have argued that the show endorses a throwaway attitude to fashion. For many, this was epitomised by the show’s promotion of <a href="https://www.theguardian.com/fashion/2019/jun/22/one-pound-bikini-missguided-fast-fashion-leaves-high-street-behind">Missguided’s £1 bikini</a>, priced low enough to be considered disposable. In contrast, the show’s decision to partner with eBay should attract a new audience for the reuse culture message compared to the people sustainability messaging usually targets.</p>
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<strong>
Read more:
<a href="https://theconversation.com/love-island-ditches-fast-fashion-how-reality-celebrities-influence-young-shoppers-habits-183771">Love Island ditches fast fashion: how reality celebrities influence young shoppers' habits</a>
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<p><a href="https://www.unep.org/explore-topics/resource-efficiency/what-we-do/sustainable-consumption-and-production-policies">Sustainable consumption</a> involves recognising the environmental impact of our lifestyles and resolving to consume less. Moving away from disposability and towards reuse across all sectors of society – not just fashion – relies on cooperation between governments, businesses and citizens. </p>
<p>But motivating people to take environmental concerns into account when it comes to shopping is <a href="https://www.routledge.com/Sustainable-Consumption-Key-Issues/Middlemiss/p/book/9781138645660">challenging</a>, not least because we are bombarded with images that equate success or “<a href="https://sustainableearth.biomedcentral.com/articles/10.1186/s42055-020-00033-2">the good life</a>” with high levels of material consumption. Advertisers work hard to convince us that we need the latest car, gadget or fashion item to live a fulfilling life. </p>
<figure class="align-center ">
<img alt="Rows of workers use sewing machines inside a factory hall" src="https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/469791/original/file-20220620-14-kbbew1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The fast fashion industry has been criticised for exploiting workers and damaging the environment.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/iloasiapacific/10987405545">Flickr/ILO Asia-Pacific</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
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<p>Another challenge is to make sustainable lifestyles appealing to the mainstream, rather than just to <a href="https://journals.sagepub.com/doi/full/10.1177/0731121419836966?casa_token=ULG0ULUFgrUAAAAA%3AZ9iPdI05nccjXL4jNpsh9tQBVAjOVWV0QxBUWp6Kd599wcI4dzX-p5gUio4d-eXZI5zRBIS5Mjzb">affluent middle-class consumers</a>, who are already <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9781315165509-9/participates-community-based-sustainable-consumption-projects-matter-constructively-critical-approach-manisha-anantharaman-emily-huddart-kennedy-lucie-middlemiss-sarah-bradbury">most receptive</a> to sustainable consumption campaigns.</p>
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Read more:
<a href="https://theconversation.com/5-ways-to-shift-consumers-towards-sustainable-behaviour-120883">5 ways to shift consumers towards sustainable behaviour</a>
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<p>Living sustainably is often taken to mean giving up the things that we like (including cars, meat or holidays) and allowing our individual freedoms to be curtailed for the <a href="https://donellameadows.org/archives/a-synopsis-limits-to-growth-the-30-year-update/">common good</a>. And <a href="https://www.umasspress.com/9781558495043/the-anxieties-of-affluence/">critiques</a> of consumerism have linked good citizenship with restrained spending and denial of material pleasures. </p>
<p>Collaborations like that between Love Island and eBay – along with other popular campaigns such as <a href="https://wearme30times.com/">wearme30times</a>, which encourages us to only buy items of clothing if we’ll wear them at least 30 times – can play a big role in shifting these ideas. Importantly, they’re often successful because they work <em>with</em> <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921344913001353">consumer culture</a> in recognising that we buy clothes to <a href="https://www.jstor.org/stable/2489287">communicate our identities</a>, display our social status and <a href="https://www.wiley.com/en-gb/A+Theory+of+Shopping-p-9780745667911">maintain social relationships</a> (as well as for fun). </p>
<figure class="align-center ">
<img alt="Two people look at a pink sweater in a store" src="https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/469801/original/file-20220620-22-hcrp12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Sustainability is often targeted at more affluent people.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-female-customer-shopping-clothing-store-2053746332">Shutterstock</a></span>
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<p>They also tap into our existing anxieties about fast fashion by introducing other options. Philosopher Kate Soper’s concept of “<a href="https://journals.sagepub.com/doi/abs/10.1177/1469540507077681?casa_token=3z_x321RxEAAAAAA:Y7DCzuBixwaDLKATY8-sMXjVlxEUzIgD6MrOdNKYonaHrPrYjkkvRrHhnpRjvcNRpOTZzAU2Rc64">alternative hedonism</a>” recognises how, when faced with the negative effects of consumption, it can be deeply satisfying to reduce your impact to benefit the world around you. That sense of satisfaction helps challenge enduring <a href="http://ecite.utas.edu.au/65295">social stigma</a> surrounding secondhand clothes, as well as promote sustainability among those unable to afford high-end eco-friendly fashion. </p>
<h2>Taking it further</h2>
<p>But the impact of this partnership should not be overestimated. Those who watch the show – but perhaps not the news – would be forgiven for missing it altogether, given there’s not yet been any mention of secondhand clothing on Love Island itself. In fact, what’s more likely to stand out is the appeal of a luxurious foreign holiday and the multiple beauty and fashion items pictured in dressing room scenes.</p>
<p>And <a href="https://theconversation.com/reducing-peak-demand-lowering-prices-but-what-about-emissions-11564">reducing consumption</a> is definitely not the message underpinning the show’s economy: with big brands advertising during breaks, in-app purchasing enabled across multiple social media platforms and contestants likely to become <a href="https://www.ft.com/content/17d9dd5c-90c3-11e8-bb8f-a6a2f7bca546">brand influencers</a> once the show ends. </p>
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Read more:
<a href="https://theconversation.com/our-addiction-to-stuff-how-walmart-enables-us-to-destroy-the-planet-129066">Our addiction to stuff: How Walmart enables us to destroy the planet</a>
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<p>But if it was to <a href="https://www.research.manchester.ac.uk/portal/en/publications/interventions-in-practice-reframing-policy-approaches-to-consumer-behaviour(f41b5679-f201-47df-ba48-12254e497074).html">lead by example</a>, Love Island could ditch conspicuous consumption altogether. Since many unsustainable behaviours are <a href="https://www.research.manchester.ac.uk/portal/en/publications/interventions-in-practice-reframing-policy-approaches-to-consumer-behaviour(f41b5679-f201-47df-ba48-12254e497074).html">driven</a> by convenience, comfort and social norms, the show could promote <a href="https://www.ribabooks.com/whats-mine-is-yours-how-collaborative-consumption-is-changing-the-way-we-live_9780007395910">collaborative consumption</a> instead. </p>
<p>That could mean group cooking, which cuts <a href="https://www.bloomsbury.com/uk/food-waste-9780857852342/">food waste</a> and appliance <a href="https://journals.openedition.org/aof/7691">energy consumption</a>, or a “<a href="https://www.youtube.com/watch?v=Xq7ub4z7YLQ&ab_channel=MyGreenCloset">fashion library</a>” encouraging increased use of each clothing item. There’d certainly be entertainment value in watching contestants swap clothes or harvest local produce: or even slog through the British mud in a glamping-style scenario. Love Island already shows the good and the bad of dating – it’s time for it to get real about sustainability too.</p><img src="https://counter.theconversation.com/content/185242/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Katy Wheeler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Sustainable fashion collaborations show that living an eco-friendly life can be fun - here’s how popular shows can help dismantle consumerism altogether.Katy Wheeler, Senior Lecturer in Sociology, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1847612022-06-10T14:16:26Z2022-06-10T14:16:26ZBuy now pay later: how to protect consumers without regulating it out of existence<figure><img src="https://images.theconversation.com/files/468196/original/file-20220610-16487-4fclax.jpg?ixlib=rb-1.1.0&rect=1210%2C240%2C2054%2C1920&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The BNPL market is booming but users need better protections through balanced financial regulation.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/bnpl-buy-now-pay-later-online-2063408687">Shutterstock</a></span></figcaption></figure><p>Calls to regulate the booming “buy now, pay later” (BNPL) industry have not deterred big brands like <a href="https://theconversation.com/buy-now-pay-later-apple-will-now-lend-you-money-to-keep-you-spending-and-expand-its-empire-184550">Apple</a> and <a href="https://home.barclays/news/press-releases/2021/12/amazon-teams-up-with-barclays-to-enable-customers-to-pay-in-inst/">Amazon</a> from the idea of offering consumers an interest-free, no-fee way to spread payments for purchases. Apple cited “<a href="https://www.apple.com/uk/newsroom/2022/06/apple-unveils-new-ways-to-share-and-communicate-in-ios-16/">users’ financial health</a>” when it announced this new feature, but research shows financially vulnerable people need more protection.</p>
<p>It’s possible to regulate this sector to safeguard consumers without completely restricting access. By learning lessons from previous efforts to regulate the payday lending sector, for example, the industry and its regulators could take steps to prevent misuse.</p>
<p>The use of BNPL payment platforms <a href="https://www.fca.org.uk/publication/corporate/woolard-review-report.pdf">almost quadrupled</a> in 2020, with transaction values reaching £2.7 billion. <a href="https://www.bain.com/globalassets/noindex/2021/bain_report_buy_now_pay_later-in-the-uk.pdf">In 2021</a>, UK BNPL transaction value grew by as much as 70% to £6.4 billion or 5% of the total e-commerce market. </p>
<p>This form of credit allows people to pay for online purchases in instalments, without a credit record check. It tends to attract younger borrowers, with a quarter of users aged 18-24 years old and half aged 25-36 years old, <a href="https://www.fca.org.uk/publication/corporate/woolard-review-report.pdf">according to data</a> shared by providers with the UK’s financial regulator, the Financial Conduct Authority (FCA). </p>
<p>Unfortunately, it has also encouraged some shoppers to <a href="https://www.which.co.uk/news/article/from-laybuy-to-klarna-how-safe-is-buy-now-pay-later-online-awAjp3K6TTeb">spend more</a> than they can afford. Citizens Advice says two in five BNPL users have <a href="https://www.citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/BNPL%20Debt%20Collection%20(1).pdf">struggled to repay</a>, and one in four of those that have missed a payment have been contacted by debt collectors. </p>
<p>And while BNPL was conceived as a convenient way to purchase big-ticket items such as sofas and TVs, the rising cost of living means people are now using it to <a href="https://www.theguardian.com/money/2022/jan/29/buy-now-pay-later-grocery-schemes-are-a-debt-trap-for-struggling-families">pay for essentials</a> such as food and toiletries. Research has also found that users who are unable to repay their BNPL sometimes use <a href="http://dx.doi.org/10.2139/ssrn.4001909">credit cards</a> with typical interest rates of 20% to delay repaying their debt.</p>
<figure class="align-center ">
<img alt="Woman with bills and credit cards." src="https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/468204/original/file-20220610-28309-r4ymb5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Some BNPL borrowers are using credit cards to manage their installments.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/top-view-stressed-young-asian-woman-785560924">Shutterstock</a></span>
</figcaption>
</figure>
<p>A rise in overstretched users is not only detrimental to consumers, it could also damage businesses. Retailers have <a href="https://www.bain.com/globalassets/noindex/2021/bain_report_buy_now_pay_later-in-the-uk.pdf">increasingly relied</a> on BNPL to boost sales by allowing people to spread the cost of goods over a series of payments. They pay the provider a fee for the purchased goods and the BNPL business model is reliant on consumers’ repeat use. </p>
<p>Retailers have used this to navigate recent challenges like Brexit and COVID-19. Up to 92% of merchants <a href="https://www.bain.com/globalassets/noindex/2021/bain_report_buy_now_pay_later-in-the-uk.pdf">surveyed last year</a> had integrated their first BNPL solution since early 2020. But the rising cost of living crisis has changed the economics of this form of credit for all involved. </p>
<h2>Regulatory lessons</h2>
<p>As a result, regulation looks increasingly likely, and necessary, to provide consumers with greater protection from financial harm. The FCA has already enforced <a href="https://www.fca.org.uk/news/press-releases/fca-secures-contract-changes-buy-now-pay-later-customers">new contractual changes</a> to terms and conditions to help protect consumers using Klarna, Clearpay, Laybuy and Openpay. These new measures include protecting consumers that cancel their goods through BNPL from being charged a late payment fee. </p>
<p>At the moment, the hope is that other providers will follow suit. This regulation needs to be enforced across the sector in a way that shields consumers without removing access to this form of finance.</p>
<p>The regulation of payday lending in 2015 provides valuable lessons for BNPL. My research on the <a href="https://doi.org/10.1017/S004727942100026X">experience of borrowers</a> shows that, while “high-cost, short-term” credit regulation protected users from falling into too much debt, it also excluded many people from accessing this credit at all. </p>
<p>Ultimately, this regulation restricted consumer choice by forcing several high-profile lenders into <a href="https://theconversation.com/wongas-collapse-and-what-it-means-for-the-people-who-rely-on-payday-loans-102419">administration</a>. Their <a href="https://www.bbc.co.uk/news/business-45359395">business models</a> no longer worked due to the stricter rules on lending and a cap on the cost of credit, combined with an influx of pre-regulation compensation claims.</p>
<h2>Protecting consumers</h2>
<p>Financial regulation that aims to protect consumers must support those on the lowest incomes that are shouldering the greatest burden in the cost of living crisis. More generally, an uplift in benefits in line with inflation would be useful. Credit is not always the right solution, but affordable community finance providers such as credit unions and community development finance institutions should also be promoted. </p>
<figure class="align-center ">
<img alt="Computer, coffee, phone credit card, yellow background" src="https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/468206/original/file-20220610-35185-c6buqm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Balanced regulation can both protect consumers and maintain access to this form of credit.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/top-view-online-shopping-credit-card-1699531609">Shutterstock</a></span>
</figcaption>
</figure>
<p>For BNPL regulation specifically, regulators can and should design rules that will ensure that consumers are protected but also able to continue to use this increasingly popular form of finance. According to my research, the following measures would help:</p>
<ul>
<li>Clarifying that BNPL is a form of credit and the implications of using it so that consumers can make informed decisions. </li>
<li>Ensuring providers make sufficient and appropriate checks about whether consumers can afford to repay loans alongside their other financial commitments to reduce overall debt. This would rely on access to real-time data to prevent multiple loans with multiple providers.</li>
<li>Adding greater <a href="https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/credit-borrowing-money/goods-services-bought-credit#:%7E:text=If%20you%20used%20a%20credit,a%20point%20of%20sale%20loan">consumer goods protection</a> to match other forms of credit such as credit cards, which offer a refund if goods are lost or damaged.</li>
</ul>
<p>The BNPL model is unlikely to disappear any time soon. Instead, BNPL companies are already starting to adapt to a more regulated future by changing their business models to some extent. For example, Klarna’s moves to <a href="https://www.bbc.co.uk/news/business-61293257">report its data</a> to credit scoring companies certainly indicates it is pre-empting regulation of the sector, as well as an economic slowdown that could curb its growth in the near future. </p>
<p>Even with this outlook, however, confidence in the sector remains. Thoughtful regulation will ensure present players and new entrants can build responsible BNPL offerings that online shoppers can continue to add to their baskets.</p><img src="https://counter.theconversation.com/content/184761/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lindsey Appleyard receives funding from the abrdn Financial Fairness Trust and Barrow Cadbury Trust. </span></em></p>The UK’s cost of living crisis has exposed the financial vulnerability of consumers, especially those using ‘buy now, pay later’ products.Lindsey Appleyard, Assistant Professor, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.