Can Deep Discounts Save Retailers?

Your next video will start in

Recommended Videos

  • Info

  • Comments


Dec. 26 (Bloomberg) – WSL Strategic CEO Wendy Liebmann and Bloomberg Contributing Editor Richard Falkenrath discuss online holiday shopping, supply chain issues and shopping security threats on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Not delivering packages on time.

Who comes out ahead, the retailers?

Nobody comes out ahead.

It is too late for the retailers to benefit from it, except people running and for the regular sales.

All of the retailers who have been shipping online get a bad rush as well because they did not deliver when they should have.

This is a supply chain issue and an administrative issue really.

Do they get -- sorted out next year or will they always be behind because the search of online shopping will get heavier?

What we saw this year, online shopping took this huge rush people did not anticipate so we have this whole issue of how do you get supply chain working.

They must get it right this year.

They must get it right sooner than last year because people will not put up with it.

Between now and this year, they don't have the volume.

It is what you put in place i guess in time for the holidays of 2014. but you have to spend extra.

So i guess it is a balancing act.

It is, because then you have the other issues -- do i do free shipping?

How do i increase capacity to ship on time?

How do i deal with returns?

You have the big wave of online shopping, so -- the people move away from free shipping?

I think a bigger balance.

How much do i have to spend to get free shipping?

It has been given away already, now shoppers are saying you promised me free shipping.

What about consenting shoppers to buy sooner.

Do you give a discount -- buy two weeks in advance, and by the way, we will take 10% off.

Absolutely that can be done.

All the online guys say -- they can encourage you very intimately, so there is a lot of that going on.

Richard falkenrath, our other guest host, target got a lot of data lost or stolen from the card readers.

Do you expect more of that in the coming weeks ahead because of the surge in holiday shopping online, that we will hear more stories about this?

Yes, there will continue to be stores.

Target is the latest in a long line of major retailers and large companies have been hacked.

This is a new feature of the economy, and it is not going away.

It will continue.

It was a serious hack but it is commonplace for these breaches to occur.

Maybe companies will finally start spending more on this.

They say in 2014 we will have the chips like in europe embedded in the plastic cards.

Maybe the target problem will drive them to move quickly.

Maybe retailers and consumers will be the drivers as well, that effort.

Those chips have been available, richard, since the 1990's. it is what europe uses.

Why are we so slow?

A good question and a lot of people are asking themselves that now.

There's really no good explanation.

Just a lack of -- sort of inertia of the old system with the magnetic card.

Do you talk about issues like this around the table as a national security company, that you can bring the u.s. economy to a halt with a cyber threat?

Yes, this is one of the top topics.

In fact, the highest level, the president and his top advisers -- when they talk about the national strategies, cybersecurity figures into it and it is frankly one of the more difficult problems.

In part, because you have to enlarge the table.

It is not just the traditional national security advisers -- defense, cia, state department -- that you have to bring in everyone who looks after the economy, and then the lawyers who can tell you what you can can't do.

This is really a different kind of national security issue, in part because the economic implications of the internet are so vast.

Tell us about the perpetrators.

Is that a russian ring, domestic?

Traditionally people think of it as a russian crime ring, but it is not necessarily case, is it?

There are many different actors with many different motors -- motives in different places.

We don't know exactly who was behind it.

Maybe somebody does, who is investigating.

But there are hackers are higher.

-- for hire.

Sometimes the actual hackers are not the one to want to use the data but they are hired out to acquire this.

I was a case in the chemical sector where one set of hackers based in china was systematically targeting the entire, coal industry worldwide to steal their insider information, their intellectual property.

They were doing enough for the own purposes but at the behest of another.

I can understand why an competitor would like the code, how do you make the chemicals, can we make them more cheaply, but in the case of a target with 40 million red card strips -- credit card strip stolen, what do you do with the info?

You sell it.

There is the secondary market -- the credit card can effectively be siphoned off?

Yes, and to get the small amount of cash you can get off of them before the bank figures out that has been stolen and shuts it down.

But there is a secondary market for that, and it has pretty best -- precise prices.

You buy them in batches.

1000 card numbers with valid expiration date and valid -- the three numbers on the back, goes for 20 bucks.

40 million of them is a lot of money.

In the case of target, do they lose business to kohl's and jcpenney?

It does, because people don't feel comfortable.

Consumers are already telling us they are feeling insecure about the economy, the ups and downs.

It is just one more thing that makes people say maybe i won't go there this week, maybe i will wait until it is fixed.

They can't afford any of that at this point.

Not a lot of volume out there this morning.

People straggling back in from the holidays, but those who are trading started to push futures higher.

Three points up on the s&p, and the dow and nasdaq also higher.

Keeping a close eye on the 10-year note yield, at the moment, just above the 2.98 range.

Will we go over three?

The euro is gaining on the dollar, although the dollar is up against the yen.

The yen hit a six-year low.

Oil prices, a big concern for everybody.

This is the season where they should be going down.

They are up a little bit.

We talked about on tuesday, gasoline prices.

98 bucks to fill up my car yesterday.

What do you drive?

[laughter] 22 gallon tank.

The car is 12 years old, i have to make it last another 12. maybe that is the best deal

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change