StorefrontBacktalk » E-Commerce

Neiman Marcus Goes Down, But Only For A Special Few

Frank Hayes — Thu, 02 Feb 2012 06:46:42 +0000

Why are small problems sometimes the biggest pains? Sometimes because they're the hardest to spot. On January 25, Neiman Marcus' Web site was inaccessible only to customers using Internet Explorer versions 6 and 8 on Windows 7—everyone else was apparently able to get in without difficulty. This sort-of outage should have been easy to fix, but it lasted more than nine hours.

That suggests the Dallas-based high-end retailer made a change in the wee hours—exactly when you'd expect—but then accidentally left test code in the homepage. The result: a Web site that probably worked fine for everyone in IT, just not for all customers.

MasterCard Pushing EMV PIN. Visa? Not So Much

Evan Schuman — Thu, 02 Feb 2012 06:33:25 +0000

MasterCard's Monday (Jan. 30) rollout of its roadmap for EMV in the U.S. set it on the opposite side of payment security from Visa, with MasterCard pushing for EMV with PIN and Visa arguing that PIN isn't necessary. MasterCard is backing up its preference with some serious fraud-dollar forgiveness. Oddly enough, the much-smaller MasterCard has trumped—or, more precisely, nullified—Visa's position, at least as far as retailers are concerned.

Given that greater-than-99-percent of Visa retailers in the U.S. also accept MasterCard, chains must go along with whichever brand has the more strict requirements. Typically, that's been Visa, but not this time. On EMV-related PCI relaxations, however, the two brands opted to adopt identical policies.

Home Depot’s Try At Not Shutting Down Completely Leaves Customers Running In Circles

Frank Hayes — Thu, 02 Feb 2012 05:53:29 +0000

Home Depot took its Web site offline on Wednesday (Feb. 1) to upgrade its version of IBM WebSphere from version 6 to 7. (Exactly why the planned outage began at noon on Wednesday seems a little mysterious, but Home Depot knows its traffic patterns better than we do.) However, in what was apparently an effort to give visitors something to read, the “Pardon Our Dust” default page included a link to Home Depot’s company blog, which even had a new post for do-it-yourselfers on Wednesday.

Only one problem: The new blog post had a link to where customers could buy that product on the site—which, naturally, took the customer to the only page working on the regular site, the “Pardon Our Dust” page. In fact, all the blog’s links went either to that page or to a grim-looking error page headed “Moved Permanently: The document has moved here”—and “here” turned out to be a link to the “Pardon Our Dust” page (from which they could, of course, click on “Blog” again). Enticing customers with products you can’t sell them—and then running them in circles? Sometimes the best thing to do really is to just close the store for the day.

Amazon’s New Sales-Tax Strategy: No More Mr. White Knight

Frank Hayes — Thu, 02 Feb 2012 03:22:26 +0000

Amazon, which last year was spending millions to fight online sales taxes, is now throwing its E-Commerce competitors under the sales-tax bus. Last week, Amazon sent E-mail notices to South Carolina customers, reminding them that they owe sales tax on Amazon purchases—but without Amazon actually collecting tax when a sale is made, thereby hiking the price a customer pays.

That means Amazon gets to build South Carolina distribution centers and enjoy a five-year holiday from having to collect sales tax—while Overstock.com, eBay and even Wal-Mart become the new big targets in the crosshairs of state tax collectors.

Macy’s In Australia: No, John, It’s Not All Thanks To eBay

Frank Hayes — Thu, 26 Jan 2012 05:43:05 +0000

eBay’s bid to become the link between big U.S. retailers and Australian customers is off to a less-than-sterling start. On January 18, eBay CEO John Donahoe bragged to an earnings call audience that Macy’s used eBay Australia to get a foothold Down Under without creating a brick-and-mortar presence. “Macy’s saw that the Australian dollar was very strong,” Donahoe said. “The Australian consumers are very open to import and they’re looking for brands. And Macy’s opened up a store in eBay Australia, and so they’re now reaching consumers in Australia on the eBay platform without having to have assets reside in the country.”

Well, sort of. Actually, Macys.com was already selling to Australian customers last summer, using third-party vendor FiftyOne to handle shipping, customs, currency issues and customer service. And the Macy’s eBay Australia store currently has no products; Macy’s spokesman Jim Sluzewski said the eBay store was tested only through the end of 2011 and Macy’s is now evaluating its results. So Macy’s wasn’t depending on eBay to reach Aussies, and the eBay store was already closed when Donahoe did his bragging. Other than that, he got it right—we hope.

Target’s Showrooming Futility: It Should Be Winning But It’s Not

Evan Schuman — Thu, 26 Jan 2012 01:37:36 +0000

In a futile attempt to fight showrooming, Target is pressuring its suppliers to make it more difficult for Target's customers to price compare. The most bizarre part is that Target is trying to game a system where it already has a huge competitive advantage.

The historic argument has been that E-tailers have a huge convenience advantage and that a retailer must combat that by leveraging its experience/ambiance advantage. But with showrooming, the customer has already driven to the store, parked, walked to the aisle and found the desired product. The physical store has the convenience advantage 10 times over.

In Theory, E-Commerce Sites Are Way Too Slow. But Do Customers Care?

Frank Hayes — Wed, 25 Jan 2012 22:58:43 +0000

Speed-tuning for retail Web sites may have finally hit a wall. A report released Wednesday (Jan. 25) says Nike, JCPenney, JCrew and Amazon had the fastest retail sites in 2011. But the survey also notes that the most popular and profitable sites are actually slower to load than the average site, because they contain so much content, and that content delivery networks don't actually speed up load times.

In theory, load times of 3 seconds or more should cost retailers half their customers. If that's true, E-tailers should be going out of business. Maybe it's time to dump those theories.

Fortnum & Mason’s PCI Weakness: Customer Service

Evan Schuman — Wed, 25 Jan 2012 19:22:47 +0000

Historic British retailer Fortnum & Mason—with roots dating back to 1704—is finding that PCI compliance doesn't end with IT. The chain had to confess last week that a customer service rep was asking customers to E-mail their full credit-card data—including CVV—to process routine refunds.

Clearly, one errant employee is something every chain has. But this example brings up a too-often overlooked PCI fact: Compliance is an issue for every employee. Mobile payment, being a disruptive factor, will only make things worse, because it creates many more opportunities for payment-card data to be captured/retained against the rules.

Should CIOs Now Surrender To Marketing? (Oddly Enough, The Answer Is “Yes. With Limits.”)

Todd L. Michaud — Wed, 25 Jan 2012 02:28:04 +0000

In the power struggle between retail marketing and retail IT, IT is getting its server farms kicked. It started with E-Commerce and is now growing with mobile and social. What has to go? If it can go in the cloud, get rid of it. E-Mail? Gone. Web hosting? Out of here. CRM? Exit, stage right. If it can be easily outsourced by specialist firms or even done by people in the business unit, you need to let it go.

It's time to evict Web and mobile app development, and pretty much any marketing initiative that isn't core to your business. Heresy? Certainly, pens Retail Columnist Todd Michaud. But it's necessary.

Visa’s Chip-And-No-PIN Plans For The U.S. Making Some Nervous

Frank Hayes and Evan Schuman — Thu, 19 Jan 2012 05:57:25 +0000

With Visa's clarification on January 13 that its U.S. EMV deployments will include Chip-and-no-PIN, retailers are trying to decide if this is a good thing or a bad thing. On the bad side, this forces retailers to immediately trust the chip technology perhaps a bit more than they want to.

"When I think about secondary validation, that gives me more of a warm fuzzy even though we have people saying that I have a more sophisticated chip and that my smart device has got some protection sitting in it," said Bill Titus, the Loss Prevention VP at Sears.

Parsing Wal-Mart’s Web Plan: How Far To Push The Stores

Evan Schuman — Thu, 19 Jan 2012 04:25:12 +0000

Few statements are parsed as aggressively for hidden signals and clues as those from Wal-Mart corporate. And few topics have to be handled more delicately than how aggressively Wal-Mart senior management will push merged-channel strategies on its stores. Therefore, the statement issued Monday (Jan. 16) by Wal-Mart about its new E-Commerce chief and how he is expected to interact with stores is getting a lot of close inspection.

Wal-Mart has recently been trying to more closely align stores with various online, mobile and social efforts. But like all major chains, brick-and-mortar management resistance is non-trivial.

M-Commerce Report Contradicted By Its Own Numbers

Frank Hayes — Thu, 19 Jan 2012 02:47:01 +0000

Want to drive customers to all your retail channels? Give them a more satisfying Mobile-Commerce site—at least that's what one analyst says. In a study released on January 12, ForeSee argued that only Apple and Amazon have M-Commerce sites that really stand out for customer satisfaction. Customers said the Web sites of other big chain are better than their mobile sites, which hurts the chains' ability to get customers to return through any channel.

It's a fine theory. Trouble is, it doesn't actually seem to work for most of the 16 retailers that ForeSee looked at, ranging from Best Buy and eBay to Avon and Target.

Zappos Breach’s Payment Card Pledge Very Risky

Evan Schuman — Thu, 19 Jan 2012 02:27:45 +0000

When Amazon's Zappos apparel unit announced on Sunday (Jan. 15) that more than 24 million customers had their information potentially stolen from its site, Zappos took the radical—but wise—move of wiping out all of its passwords. That caused massive disruptions to the company, shutting down customer service phone access and access to the site from outside the U.S., in addition to inconveniencing all customers.

But it was the unequivocal declaration that payment systems had not been touched that raised eyebrows. At this early stage of a breach investigation—knowing that cyberthieves tend to be quite good at hiding their tracks and creating misleading tracks—is such a blanket promise to customers reckless?

Wal-Mart’s Stealth Social Strategy: Pretend This Isn’t About Customers

Frank Hayes — Wed, 18 Jan 2012 22:14:31 +0000

Retail chains have been using Facebook and other social media to connect with customers for years, but now someone is trying to use it to acquire new suppliers—and, astonishingly, it's Wal-Mart. On Wednesday (Jan. 18), the retail giant launched a contest to let would-be suppliers pitch their products with YouTube videos, which customers can vote on to choose their favorite products. The winners get a chance to have Wal-Mart sell their wares online or in-store.

But what's really clever is how the contest uses social media as stealth customer engagement—an area where Wal-Mart hasn't been exactly brilliant in the past.

Mobile May Force You To Rewrite Your Shoplifting Definitions. And 100 Other Things You Haven’t Yet Thought Of

Mark Rasch — Mon, 16 Jan 2012 19:23:38 +0000

Mobile payment is going to change retail in an unknown number of unknown ways, and your lawyers will have healthy employment. Consider in-aisle checkout and shoplifting rules, pens Legal Columnist Mark Rasch. Today, customers who put products in a concealed place—a pocket, backpack, purse, etc.—while still in the store can be convicted of shoplifting even if they have yet to reach the POS checkout area.

The conceal part of that action is considered evidence of criminal intent. Now let's see you try and enforce that rule when you have in-aisle mobile checkout.

Guess Google Wallet: Great GUI, Hardly Any Customers

Evan Schuman — Thu, 12 Jan 2012 02:49:22 +0000

Mobile wallets face a time-honored Catch-22: because very few stores support the technology, consumers have very little reason to bother getting it. Exactly how barren is this dial-tone desert for Google Wallet, currently the only actively being trialed game in mobile town?

We have our early clues from the CIO of the $2.5-billion 481-store Guess chain, one of the first test sites for Google Wallet in "a couple of stores" in California since May. In total, how many customers have tried Google Wallet? Says CIO Michael Relich: "Five or six." Not 500 or 600 customers, mind you. Five or six.

Guess CIO On iPad Trial: “This Is The Consumerization Of IT.”

Evan Schuman — Thu, 12 Jan 2012 02:45:07 +0000

Walk into one of about 25 Guess stores this week and you'll see customer-accessible iPads in the men's, women's and accessories departments and even in the dressing rooms. "For the cost of a kiosk, I can put in four or five of these," said Guess CIO Michael Relich. "This is the consumerization of IT."

But the Guess iPad trial is hardly being done to save costs. The flexibility of the tablets and sharp, customer-friendly graphics make the devices a much more effective way to show demos and to locate merchandise, check inventory and do anything else that a kiosk would normally do.

With Google’s Social/SEO Mashup, Your Teams Are On A Collision Course

Frank Hayes — Thu, 12 Jan 2012 00:59:27 +0000

After years of making search-engine optimization tweaks to E-Commerce sites to get as high in those search results as possible, retailers are about to face a much more complicated SEO situation. On Tuesday (Jan. 10), Google announced it will now push up search results from Google+ high in its search rankings. The result: Retail sites will suddenly be pushed down in the list of search results by something outside of their SEO control.

But that's just the start. Does anyone really expect that Google won't take this further—and that your traditional SEO and social media teams aren't about to collide?

One Attacker With A Single PC Can Now Bring Down A Whole Server Cluster. Got Any Unhappy Customers?

Frank Hayes — Wed, 11 Jan 2012 17:04:17 +0000

The days of the classic botnet distributed denial-of-service attack may be numbered, and that isn't necessarily good news for retail chains.On January 6, a cyberthief-friendly programmer made public a one-line attack that could enable a single attacker to bring multiple servers to their knees. That moves DDoS out of the realm of requiring a costly botnet for a high-bandwidth mass attack—and brings it into range for a single irritated teenager.

The vulnerability that attack uses is easily fixed. What's really worrisome is what makes the attack practical: the new ability to target server weaknesses that have been known for years—but no one worried about.

Publix Buy-Online-Pick-Up-In-Store Trial Nixed: Grocery Shoppers Are Different

Evan Schuman — Wed, 11 Jan 2012 03:22:14 +0000

A trial for the Publix grocery chain to allow buy online/pick up right outside the store—similar to what Hannafords has been trialing—has ended with the service being killed. “While our Curbside associates have created many loyal Curbside customers, the number of consistent customers who chose to use this service was considerably less than required to meet our predetermined expectations,” Publix spokeswoman Shannon Patten was quoted as saying.

There is something about grocery chains—unlike almost any other retail segment—where trust is minimalized. For some perishable items—think meats, fruits, eggs or vegetables—where a customer wants to personally inspect items, looking for unripe, moldy items or cracked eggshells. The suspicion that employee-chosen items might inadvertently—or even deliberately—be less picky exists. There’s also a carryover effect, where even boxed or canned goods can suffer from the psychological association with those more delicate items. Grocery shoppers are not averse to tech improvements—see mobile shopping devices, electronic shelf labels or even some instances of self-checkout—but they really don’t want their ability to select to be diminished.

Want To Push Social Media? Have You Considered Using Your Stores?

Todd L. Michaud — Tue, 10 Jan 2012 17:29:20 +0000

How's this for ironic? Retailers complain about how difficult it is to get shoppers to explore their social media efforts. And yet these same retailers have the almost undivided attention of these shoppers, often for hours every month, in an environment where the retailer has complete control of the surroundings, the store layout and the staff.

Almost all retail marketing efforts are based on the not-so-simple premise of getting people to purchase from them, either online or in person. The problem, pens Retail Columnist Todd Michaud, is likely a mesh of old-mentality thinking with a heavy dose of channel conflict.

Questions To Ask Your System Vendor Or Reseller

Walter Conway — Mon, 09 Jan 2012 15:25:34 +0000

The National Retail Federation's Big Show is next week, and the exhibition floor will be crowded with vendors offering retailers all types of software applications. As a public service, following is a list of questions all merchants should ask their POS system supplier or reseller based on one QSA's experience—namely the experience of PCI Columnist Walt Conway.

The good vendors will be able to address all these questions. The not-so-good ones will hand you a carrier bag or a pen instead.

Amazon’s Latest Patent: Guessing Religion Based On Giftwrap

Evan Schuman — Thu, 05 Jan 2012 02:52:43 +0000

Amazon is floating the idea—via a patent filing—of launching a social service. Whether it would be a dating site or a potential business partner finder or just a more intelligent way of choosing who to hang with online, that's not clear.

But it is clear that Amazon is drooling over its vast CRM files and trying to figure out how much money it can make off them.

Best Buy’s Black Friday Cancellations Were “Bait-and-Switch Breach Of Contracts”

Mark Rasch — Thu, 05 Jan 2012 01:29:11 +0000

Twas the night before Christmas, and up in the sky, was a jolly old Santa, sans gifts from Best Buy. Consumers who had bought particularly popular items on the Best Buy Web site on Black Friday expecting a visit from Santa instead received a virtual lump of coal from the retailer in the form of an E-mail informing them that no gift was coming.

Legal Columnist Mark Rasch wants to call it a bait-and-switch coupled with a breach of contract. The Uniform Commercial Code Article 2 for the sale of goods says that if there is an offer (PlayStation for $150!), an acceptance (click here!) and consideration (here's my credit card), then voila! A contract is formed.

Best Buy’s Black Friday Fiasco: When Were Bosses Told?

Evan Schuman — Thu, 05 Jan 2012 01:22:28 +0000

Best Buy's Black Friday disaster is a huge deal precisely because it strikes at the very heart of E-Commerce fears. Namely, a consumer needs to feel confident that once an order is paid for, the product will absolutely be arriving shortly.

Although Best Buy has yet to spell out how this happened, the most likely scenario is that it was the so-called perfect storm of bad timing and possibly a quantity typo. How much of a delay happened while employees desperately tried to find the—unknown to them at that point—non-existent merchandise? In a $50 billion chain, news can travel upstream very slowly. When the news is bad, it travels upstream even more slowly.

Online Age-Verification Is No Longer Impossible. In Fact, It’s Required

Frank Hayes — Wed, 04 Jan 2012 23:54:36 +0000

If detecting a customer's age is tricky when the customer is standing right in front of a kiosk, it's an even bigger problem for E-Commerce—one with hard legal consequences. Just after Christmas, a California father discovered his 14-year-old son had successfully ordered a water pipe and tobacco through Amazon—both illegal for minors to buy in California.

Age verification is something mail-order vendors have struggled with for years, and mostly given up on. But E-tailers can no longer use impossibility as an excuse. A recent federal law requires age-verification for tobacco sold online—and other age-controlled items can't be far behind.

Strange eBay Holiday Promotion Forced Shoppers To Engage In Unnatural Merged Channel Gymnastics

Evan Schuman — Wed, 04 Jan 2012 20:57:44 +0000

A very bizarre eBay holiday promotion—which appears to have been in response to an almost-as-bizarre holiday promotion from Amazon—seemed to reverse conventional thinking about merged channel retailing. Instead of offering an incentive to shop online or in-store, the eBay incentive inexplicably required consumers to shop in both channels.

What started this holiday dogfight was an Amazon promotion, where it was offering a tiny discount (5 percent, with a ceiling of $5) for people who scanned barcodes and then purchased the item on Amazon. eBay's response was what it billed as a $10 in-store coupon, with three retailers: Toys "R" Us, Dick's Sporting Goods and Aéropostale.

Protecting Call Centers, The PCI Way

Walter Conway — Tue, 03 Jan 2012 16:21:34 +0000

The PCI Council used its December 2011 newsletter to remind merchants and service providers to control physical access to their call centers with video cameras or other devices. This recommendation is both sound security and good advice, and merchants everywhere should take it to heart. But as a QSA, PCI Columnist Walt Conway wishes the Council had done more than highlight just one particular sub-requirement.

There is more to protecting sensitive areas than installing video cameras. The second, and possibly thornier, concern for small and midsize merchants is how effective the reminder is likely to be when many of them mistakenly think they won't need to follow the advice.

Don’t Rush To Mine Customer Reviews After Christmas. You Won’t Like What You Get

Frank Hayes — Thu, 15 Dec 2011 04:59:07 +0000

A U.K. buying site that tracks the frequency of online customer reviews said on December 8 that retailers shouldn't expect a flood of product reviews on the run-up to Christmas. If the usual trends hold, there should be a lull in reviews between October and New Year's when the pace of review writing should pick up again, according to DooYoo.com.

As obvious as that seems (after all, how can a gift recipient review a gift until it's actually opened?), there may be a few more subtleties in when retailers can expect reviews—and what type of reviews they can expect.

Amazon Price-Check Program’s Critics Have The Wrong Facts And The Wrong Attitude

Evan Schuman — Thu, 15 Dec 2011 02:47:00 +0000

The Amazon price-check promotion is getting mercilessly blasted by authors, a U.S. Senator, a retail trade group and various others. The strangest part is that so many are getting the actual specifics of the Amazon program wrong.

Booksellers were up in arms about Amazon encouraging people to go into their local stores to buy on Amazon, despite the fact that consumers have been doing the same thing for as long as Amazon has been around and the fact that—to be nitpicky—books were excluded from the program. U.S. Senator Olympia J. Snowe (R.-Me.) issued a statement that "incentivizing consumers to spy on local shops is a bridge too far." That may be true, but the price-sharing part—the spying the senator is referencing—was excluded from any incentives.

Amazon Chutzpa: Do Unto Others What You Block

Mark Rasch — Thu, 15 Dec 2011 01:57:22 +0000

When Amazon launched a one-day promotion this month aimed at getting its customers to go into brick-and-mortars and select items they wanted to buy at Amazon for a 5 percent discount, it was engaging in a deliciously ironic act.

Why? Because although what it was doing to those physical stores was likely legal, had those stores tried doing the same to Amazon, it would have been illegal, thanks to Amazon's posted policies. That policy phrasing is not even universal—or even common— among major E-tailers, pens Legal Columnist Mark Rasch.

Next StorefrontBacktalk Newsletter Will Be Published January 5th

Frank Hayes — Thu, 15 Dec 2011 00:53:23 +0000

As is our tradition, StorefrontBacktalk shuts down for the last two weeks in December, due to the fact that y’all are far too busy (a) supporting the biggest selling weeks of the year until December 25th, (b) supporting the biggest returns-and-exchanges week of the year after December 25th and (c) closing the quarterly books until December 31st on what everyone hopes will be a bigger year than 2010.

That means our next regular weekly issue will arrive on January 5th, 2012. In the meantime, everything else will still be live (the Web sites, our Kindle version, our Twitter tweets, our mobile sites, etc.). And we’ll, as always, send out breaking news alerts if circumstances merit.

Tokens Are Not The Same As Encryption. Honest

Walter Conway — Thu, 15 Dec 2011 00:47:08 +0000

It's now been four months since the PCI Council's guidance on tokenization, and people are still mixing up tokenization and encryption. They are also drawing incorrect parallels/inferences. Tokenization is not encryption. Trying to compare the two is not appropriate (or like comparing quarks to streetcars or your other favorite silly similes), and doing so can lead to mistakes in scoping PCI.

By the way, after much effort, PCI Columnist Walt Conway thinks he has finally found a real-world example of what a high-value token should be. Let's say shoppers want to use a payment card at a merchant, but they do not want that merchant to have their PAN, for whatever reason.

Interested In Advertising In StorefrontBacktalk In 2012?

StorefrontBacktalk — Mon, 12 Dec 2011 17:28:00 +0000

A message from our beloved business side: As the NRF Big Show happens next month, StorefrontBacktalk has a couple of last-minute slots for anyone wanting to communicate with NRF attendees. In mid-January, as our readers leave their postmortem holiday shopping meetings with the list of everything that went wrong, every feature management wants to add and a wishlist of products to make it all, it’s a nice time message.

We will also be adding several content channels next year—including several new weekly podcast series, more monthlies, events in addition to our usual weekly and monthly newsletters, and Web sites—and if your marketing people have any interest in getting involved, we now have new opportunities. Some of these new channels were specifically created to enable smaller vendors, with much more limited resources, into our community. If your marketers want to get your brand in the middle of these discussions, please drop us a note.

EU Considering Data Breach/Privacy Rules With Fines Of Five Percent Of A Retailer’s Annual Revenue

Evan Schuman — Thu, 08 Dec 2011 05:01:54 +0000

The European Union is considering new rules that will enable it to fine retailers as much as five percent of their annual revenue—yep, you read that right—for breaching EU privacy rules. The rules would also cover the protection of payment-card data.

If enacted with enforcement teeth, this could be huge. Not only are the threatened amounts (at least the ceiling) orders of magnitude beyond what major U.S. chains have been threatened with by card brands and processors, but the threats are far more realistic.