This is the latest installment in FN’s series “Tech Tuesdays.” Each week, FN will take a closer look at an area of digital innovation and explore how these technologies are impacting the way footwear operates. The shoe industry is known for combining heritage craftsmanship with the latest advances: This column will examine that intersection.
Today’s retail brands are tasked with fighting fraud on all fronts, as developments in technology provide new avenues for scammers to try. But while many are directing their attentions to counterfeiting and chargebacks, one of the biggest threats to both a company’s bottom line and reputation is also one of the most classic forms of fraud: violations in minimum advertised price (MAP) policy.
Any brand who sells through retail partners, or authorizes the selling of its goods through online marketplaces, needs to be diligent about maintaining standard prices. While discounting and sales promotions may be used to help shift inventory later in the season, brands should be building in price protection through the creation – and enforcing – of MAP policies, so that the original number isn’t undercut by other listings.
“A strong Internet-authorized distribution agreement and a MAP policy are tools that allow brands to have the control back in their hands,” said Ryan Erickson, VP of Sales at brand protection platform Trackstreet. “The sales reps should be out there selling, saying here’s our collection, here are the products we’re going to have on MAP and here are the products we’re going to let the market help dictate because they’re going to be very widely distributed.
Not all products are needed, or even suited, to a MAP policy. Old season product that’s been on sale for several years may have readjusted its price in the market, to a more affordable number. Additionally, MAP policies for products that will sell through a large network of partners will be harder to enforce; it may make more sense for a brand to focus on a few valuable styles each season instead.
Even with a reduced number of policies to track, this can still be a challenge due to the range of sellers both online and in-store that might carry the footwear. This is where technology can be of use. Programs like Trackstreet can more easily aggregate and review data to identify where an item might be being listed for an inappropriate sum, both on individual retail websites and through marketplaces like Amazon.
“We can’t identify all third-party sellers on Amazon; there are 2 million third-party sellers,” said Erickson. “But with our Amazon analytics, we’re able to narrow down the search and find out who some of those third-party sellers are. There’s nothing too surprising about what we do – that’s the beauty of it. It’s really just putting the control back in the hands of the brands so that they can make the decisions.”
Erickson differentiates between the one-off sellers that take advantage of a product that happens to come their way, and the dealers who deliberately establish a system that undercuts a brand’s pricing. These may be people using employee discounts to gain access to product or other back doors in order to maintain a steady flow of product.
These are fortunately the players who are most likely to be caught by the comprehensive software tracking, due to the repeated violations. Due to the simplified nature of these tracking systems, it can be easy and affordable for brands to implement them on their most valuable product lines. And Erickson suggests that brands’ fears over how their retail partners may respond may be unwarranted.
“A lot of the retailers are asking for [MAP policies] because they just want to be able to showcase your products in a proud way and in a margin-enhanced way,” said Erickson. “They have the same issues with a customer coming into a showroom and trying on product, only to go onto their phones and order it from a cheaper, unauthorized seller.”
Not only can these tools offer quick solutions to margin drains, but Trackstreet also offers a forecasting service that can help brands gain an overview of their performance. It can be challenging to manually collect data from all partners and platforms, which is needed in order to identify trends in sales, but with the help of a third party software this can become more accessible.