Evan Schuman's StorefrontBacktalk

A victim mentality seems to be sweeping through the retail industry. Every day, good retail organizations make horrible decisions (or, in some cases, do not make a decision) that even they know will have a long-term negative impact on their business. “Tech Titans” don’t exist in retail. There are simply those who willingly embrace IT as a core part of the their business and their overall value proposition and there are those who live with outdated sensibilities about IT’s role.

“If your organization is spending too much time and money maintaining legacy systems, it’s because you either made poor decisions in favor of short-term gains or lacked long-term vision,” pens Retail Columnist Todd Michaud. “If your IT leader (I won’t even assume you have a CIO) is trapped working for your CFO or your IT budget is based on a percentage of your sales, you deserve the spaghetti diagram that is your IT infrastructure. Showrooming is a self-inflicted wound.”

In the otherwise futile battle against showrooming—do you really think making it harder for your shoppers to compare prices on their mobile devices isn’t going to backfire?—some chains have started to get clever. Perhaps the motivation is ill- advised. But if the results are helpful to both shoppers and retailers, why complain?

Target’s QR endcap move is a fine example. Although it is only one of many, Target’s efforts are the topic of StorefrontBacktalk‘s October monthly column in Retail Week, the U.K.’s largest retail publication. The column lives here at Retail Week. For those who don’t have a Retail Week subscription—shame on you!—here’s a copy at StorefrontBacktalk.

The retailer alliance that’s trying to come up with its own interchange-free mobile payments system has added a handful of new members, and we’re trying to figure out why. On Monday (Oct. 1), MCX said that Gap, Bed Bath & Beyond, Dillard’s, Dunkin’ Brands “and others” have now signed up for the group, which insists it’s hard at work on a mobile payments platform.

Maybe it’s the Walmart mystique.

Mobile barcode experiments have been all the rage these last few months. Burger King tried QR for payment. Target used it for unlimited in-store inventory on hot holiday toys. Home Depot and Macy’s both toyed with CRM-adapting QR codes to show different people different information. Will shopper-scanned codes prove to be a passing fad, or will it be long-term? For those hoping these approaches offers serious business returns, a glimmer of hope has come out of a grocery trial.

Back in May, we told you about a train-station grocery trial by online grocer Peapod, which was itself a direct steal from a Tesco QR code subway trial in South Korea. The Peapod effort started at 16 stations in the Chicago and Philadelphia metro areas. Here’s the unexpected part: On Monday (Oct. 1), Peapod expanded the trial to more than 100 locations. The expansion—adding Boston, Connecticut, New York, New Jersey and Washington, D.C., commuter rail stations to the test—is impressive in its scope. And it means someone at the retailer must have seen some powerful numbers.

Target on Wednesday (Oct. 3) unveiled an in-store chain-wide QR trial that will simultaneously test almost unlimited inventory of a handful of the season’s hottest toys and whether shoppers would like to avoid purchase lines in exchange for multi-day shipping delays, in addition to assessing a suggestion that this option can be used to hide gift purchases from curious young eyes. Not bad for some cheap QR code stickers.

Given all of those interesting attributes being tested, the trial—which starts October 14—is going to have to extrapolate data from an unusually small product sample: 20 toys that will be featured on endcaps. Granted, those are literally the expected 20 hottest toys from this upcoming holiday season. But it’s still only 20. That’s statistically tiny within a store with an average of 70,000 SKUs.

Urban Outfitters is dumping its cash registers. The 456-store chain—which includes Anthropologie, Free People, Terrain and BHLDN stores—is retiring dedicated registers, replacing them with iPod Touches for in-aisle checkout and iPads for cashwraps, the chain’s IT head told analysts on September 27.

The shift is part of an IT revamp that includes a merged inventory system, ship-from-any-store capability and improved turnaround on returns—in addition to a new West Coast datacenter that effectively works as a disaster recovery hot site for the company’s existing East Coast IT operations.

Trying to deliver a responsive Web design, an interface that is customized to your customer’s Web surfing environment, is becoming nearly impossible thanks to the latest and greatest technology. Four trends are ripping apart the principles of solid Web design that existed even a few years ago: small tablets, better looking screens, mobile phones and netbooks (remember those?). The result is retailers spending a lot of money to make great looking Web sites and then finding out that a large portion of their users have a “less than optimal” experience, pens Retail Columnist Todd Michaud.

When Todd saw last week’s StorefrontBacktalk story by Frank Hayes about how top retailers did not seem to know that Android tablets existed, he was surprised, because those results were quite different than his own research done just a few months earlier. But Todd’s research focused solely on the iPad. So what is causing us to have such different experiences, beyond Android versus iPad? It appears that the 7-inch form factor is the culprit.

In a case that may have profound ramifications for retailers’ ability not only to collect but also to protect the privacy of customers’ location information, the U.S. Justice Department argued to a U.S. appeals court on Monday (Oct. 1) that Americans do indeed have no right to privacy when it comes to mobile phone geolocation data. This comes about two months after a different appellate court reached the same conclusion, ruling that Americans have no such privacy rights.

If there truly is no expectation of privacy in what is called “historical cell data” (where you were, as opposed to where you are right now), then there would be no problem with retailers’ collecting this data about their customers with or without the knowledge and consent of those customers, pens Legal Columnist Mark Rasch. Just as video cameras in the mall capture images of customers (and their locations), retailers could use cell data to find out where their best (and worst) customers are. Accepting the government’s argument before the federal court, there would be no privacy violation for a retailer doing this.

The fight over the interchange settlement is heating up again, with the biggest settlement opponent apparently trying to swing PayPal onto its team. On September 28, the National Association of Convenience Stores’ lawyer, Douglas Kantor, claimed that the settlement’s terms would hobble PayPal’s in-store payments hopes. (PayPal hasn’t said anything on the subject, which suggests how much of a reach this is.)

But even Kantor admitted PayPal could fix the problem with a simple change in its merchant terms. A much trickier problem for retailers post-settlement may be deciding what price to put on each item—or whether there even is a single official price.

By November, the 654-store Finish Line sportswear chain will become the first major retailer to have mobile checkout in every one of its stores, just in time for the holidays. But while piloting the system in almost 50 stores, the $1.4 billion Indianapolis chain has had to wrestle with the practical versus the potential. For example, the associate-issued mobile units have full CRM access, so associates are able to review a customer’s full purchase history to deliver the best experience. To avoid awkwardness, though, most associates don’t access such history until after a sale is completed, when asking for a loyalty card seems natural.

“It undermines the strategy,” said Finish Line CIO Terry Ledbetter. “But quite frankly, it was hard to imagine how resistant customers would be to telling you who they are. ‘You don’t need to know who I am,’” he said, adding that the chain is exploring using an opt-in feature on its mobile app that would broadcast to all associates when a customer walks in the store.

After two years and 125 million iPads and other tablet computers shipped, most large chains’ mobile Web sites still don’t seem to know that tablets exist. They still serve up an M-Commerce site designed for a tiny smartphone screen, which looks somewhere between mediocre and terrible on a tablet screen that’s seven inches or larger. That means just a few years after chains finally figured out the importance of customizing M-Commerce sites for phones, there’s a new advantage to be gained by spotting which mobile devices don’t have tiny screens and giving them their own customized tablet sites or the full-size Web site.

Among the largest retailers, only the Amazon, Home Depot, McDonald’s, Kohl’s, Apple, JCPenney, Gap and Overstock Web sites showed up in a tablet or full-screen version. Staples.com showed up on a seven-inch tablet with slightly more content added to what was still clearly a site designed for a phone screen. But Walmart, Target, Walgreen, CVS, Lowe’s, Best Buy, Sears, Macy’s, Rite Aid, TJ Maxx, Nordstrom and even eBay served up exactly the same screen for a tablet as for a phone with a screen a small fraction of the size. On the phone, those compact, minimalist sites help usability. On even a small tablet, the result is vast expanses of blank space that all but drives away customers.

Maybe it’s time for retailers to give up on price-matching promotions. Last Friday (Sept. 21), U.K. supermarket chain Asda all but threw in the towel on a promotion in which it promised to beat competitors’ prices by 10 percent or refund the difference. The problem (spotlighted in a story by one of the U.K.’s biggest newspapers): “Professional shoppers” were milking the promotion to get as much as $14,000 in rebates in a month.

It used to be only chains that kept detailed databases of competitors’ prices. Now every coupon or rebate Web site has data that’s even more current, which makes beating a chain’s price-match promotion trivial.

In our story this week about the various ways to track shopper location in-store, an astute reader asked whether tracking a shopping cart wouldn’t be an easier approach than tracking the mobile device. Although tracking the cart or a handheld basket is much more limited, it does have some wonderful advantages. But what if you could marry the brains of a mobile app with the bulk—and easier trackability—of a cart?

This marriage could be a very low-cost proposition, with the app asking for the cart’s number or, better yet, the cart presenting a QR or barcode that the app can scan. The app—with its capabilities and its CRM history—could use a cart equipped with a simple radio beacon for navigation purposes.

For the last year or two, brick-and-mortar execs have shared three bogeymen—showrooming, E-Commerce sales tax avoidance and Amazon, itself—blaming each for plummeting sales. And just like the bogeymen of generations of children’s nightmares, neither of the first two is real, other than being real excuses for their own problems. The sales tax bogeyman has been mostly exposed to the light, with the initial states where Amazon has started charging sales tax showing what should surprise no one: The sales taxes being charged have had no statistically meaningful impact on Amazon sales.

For the Amazon sales tax haven to be an issue, you first have to believe that the only—or even a main—reason why people shop at Amazon is to save the sales tax. There are quite a few reasons why that is absurd. But the fact that shipping charges are typically many times the sales tax is a pretty good place to start.

For quite a few years now, retailers have salivated over the idea of mobile phones revealing exactly where shoppers are at all times. Retailers would know which displays customers are standing in front of, for how long and what actions they take right afterward. Unfortunately, even though mobile devices have advanced quite a bit recently, the ability to know location with any precision has been elusive.

No major advances in mobile location technology have emerged. In the last couple of months, however, quite a few very different approaches to location tracking have emerged. These range from leveraging the earth’s magnetic field to piggybacking the data already used by mobile ads, tracking a combination of Wi-Fi and Bluetooth signals, and riding the audio signals from existing music speakers. One app even reacts to light patterns from specially enhanced LED bulbs.

Best Buy on Monday (Sept. 17) described a trial it’s doing with eBay’s RedLaser, where it uses in-store Wi-Fi triangulation coupled with near-the-store GPS tracking to confirm that a shopper has walked into a Best Buy. Once confirmed, it pops up a special version of RedLaser’s app focused solely on Best Buy. The traditional RedLaser app—which will still be available to those shoppers in a Best Buy—did a more global product search among all retailers.

What’s impressive is that this approach is three levels deeper than what RedLaser has been used to. It goes beyond limiting its results to Best Buy, focusing instead on what that specific Best Buy store sells and then limiting the results to what that specific Best Buy store has in stock. This means Best Buy’s APIs are sharing real-time inventory data.

JCPenney showed off its new “shops within the store” concept on Wednesday (Sept. 19). But there are still more than a few unanswered questions about exactly how the retailer’s in-aisle checkout will work when it goes live in February 2013. The biggest issue: Will customers treat the clusters of mini-shops like a mall (pay when you leave each mini-shop) or like a department store (pay all at once at the end)?

The 1,100-store chain’s CEO, Ron Johnson, admits that JCPenney is still figuring out the workflow for checkout. He’d better work fast—this is a lot more complicated than anyone assumed.

ISIS has dodged a bullet. Just after Apple launched the iPhone 5 on September 12 without a surprise mobile-payments announcement, ISIS said its long-expected summer trial in Salt Lake City and Austin won’t start this summer after all. Some coincidence, huh?

An Apple surprise might have forced the mobile-operator consortium to rush into its launch. That’s not something ISIS wants to do, especially now that Google has already tried and abandoned ISIS’s chosen technical approach and the number of ISIS-supporting retailers still isn’t up to what ISIS wants it to be. And that’s not the worst of it: There’s still no leadership in mobile payments.

Yet another video-related shopping patent was issued last Friday (Sept. 14), and it’s not for retail chains—at least not at first glance. U.S. Patent 8,244,594 describes a personal shopping service in which a customer can use video to actually see the shopper-for-hire collecting the shopping list in real time, so it’s possible to reject or swap out items as they’re being grabbed from the shelf. That’s not a likely candidate for a service from a big chain, but it raises an interesting question: Why aren’t chains already using video this way in-store?

After all, customers have long called stores to ask if a particular item is in stock. Associates can check the shelves to confirm, though they don’t always get it right. Now that camera- and Wi-Fi-equipped phones and tablets are so cheap, it’s practical to let customers watch online as associates check those shelves to see exactly what’s there. That’s at least as compelling a use of video as Amazon’s “watch while we pack your order” approach—and in this case, it could actually save customers time and avoid associate mistakes. Besides, half the retail battle is getting that customer into the store—even virtually.

When a federal appeals panel last month ruled that Americans have no right to privacy when it comes to the location data broadcast by their phones, some retailers started asking whether this meant geolocation opt-ins might no longer be necessary. In reality, such opt-ins never provided any protection. But continuing to do them is probably harmless, for both reasons of tradition and to keep legal happy.

There have always been only two reasons for seeking opt-ins—supposed legal protection and to negate future customer backlash. As a practical matter, opt-ins help out in neither situation. Let’s start, though, by admitting there are two types of opt-in: knowingly/deliberate, and what retail chains use.

One of the highlights of last week’s PCI Community Meeting was the long-awaited release of the PCI Security Standards Council’s guidance on mobile-payment application developers. The document lays out a set of requirements that together form a roadmap for mobile-payment application developers and would-be developers.

Currently, retailers have a choice. They can use their smartphones and tablets, sticking on a dongle that reads a payment card’s magnetic stripe, and be cruising down the mobile commerce highway. Or they can be PCI DSS compliant. Unfortunately, the PCI Council has stated that smartphones and tablets are not secure, pens PCI Columnist Walter Conway.

Here’s some good mobile news for your bean-counting bosses: Spending less on mobile, in most situations, will deliver roughly the same results as spending a lot more, according to a report released Tuesday (Sept. 11) by Forrester Research and the National Retail Federation (NRF).

Clearly, that’s not always the case. Sometimes spending much more is highly beneficial but may not deliver immediately better mobile stats; for example, an infrastructure investment that will provide better uptime and faster performance for many years. That caveat caveated, the fact that Forrester found few, if any, performance gains from spending more money on mobile is deliciously counter-intuitive.

Retailers could really use some cooperation from vendors these days—or at least fewer surprises—when it comes to following privacy policies. Right, that’ll happen. As of last week, Microsoft and the Apache Web server project are feuding over how Apache (the most widely used Web server) will handle Do Not Track features of Internet Explorer (the most widely used Web browser).

Unfortunately, the two software suppliers aren’t just throwing the usual hissy fits at each other. They’re configuring their software as part of the feud, which means retailers and their online privacy policies and, potentially, the Federal Trade Commission are caught in the middle.

A large chasm still exists between the thinking of retail CEOs and E-Commerce execs. Case in point: Toys”R”Us CEO Jerry Storch, who gave a tradeshow keynote on Tuesday (Sept. 11) defending brick-and-mortar chains and promoting merged-channel, not just online, retail. That defense of bricks isn’t an issue. What’s worrisome is that Storch’s view of merged channel is far behind what customers already expect—namely, that it’s all the same retailer, and online-versus-stores better not get in the way.

When it comes to merged-channel thinking, customers are already there. E-Commerce execs are getting there. But chain CEOs don’t get it yet.

Why is it that the same retailers who will replace a finance clerk’s desktop like clockwork every four years will let their POS linger for eight, nine, 10 or more years? Why is it that datacenters can be consolidated and servers can be virtualized but E-Commerce still operates as a separate channel? The answer is simple, pens Retail Columnist Todd Michaud: politics.

Becoming a CIO is a lot like running for office. You have to make a lot of promises to get the job. Once you get the job, you have high expectations to deliver on a lot of competing interests (a lot of people to keep happy). You find way more ghosts in your closet from your predecessor than you expected. You get about four years to make everything happen, or they will find someone else to do the job. Sound familiar?