Evan Schuman's StorefrontBacktalk

Larry Buresh, the CIO of the 1,138-store CSK auto-parts chain, said he knew that his current store technology was out-of-date and not especially competitive, but he also knew that the short-term productivity cost—not to mention the actual dollars and time investment—of a major, enterprisewide upgrade was not practical.

Buresh’s answer? Replace all of the hardware, but somehow keep all of the software. That’s easier said than done when the to-be-replaced POS (point-of-sale) systems are, “12 years going on 50 years old,” Buresh said.

Contactless payments—whether they’re made using a fob dangling from a keychain at a gas station, an RFID chip embedded in a cell phone or a new contactless credit/debit card—have now moved from the experimental to the real-world stage.

Global retail IT spending among midmarket companies is expected to sharply increase in the next few years, from about $22 billion last year to almost $31 billion by 2009, an almost 41 percent increase, according to a new report from technology analysis firm AMI Partners.

AMI defined the midmarket retailer as one with between 100 to 999 employees.

With American retailers preparing to replace their aging point-of-sale units at record rates, a retail POS vendor called VeriFone wants to flood checkout lanes with Linux-based full-motion video, 65,356-color displays and digital stereo sound.

The new unit—dubbed the MX870—is designed to deliver animated ads and demos in a loud, attention-demanding manner, which is not hard when customers have no choice but to stand in line.

When JP Morgan Chase—the nation’s largest issuer of credit cards—announced it was incorporating contactless payment capabilities in all upcoming credit cards, it was a huge legitimizing moment for contactless.

It generated lots of consumer buzz for the feature that Chase calls “Blink” and it is most likely the first RFID-enabled payment device that became a punchline on Saturday Night Live. (The JP Morgan folk loved that.)

SAP AG opened a volley in what has become a series of charges and countercharges between it and its former Retek acquisition target by amending its Safe Passage program to provide incentives for Retek customers to jump ship.

Among the lures: a partial credit of the user’s original Retek software licensing (no floor mentioned, but a ceiling of 75 percent) to be used to pay for SAP for Retail packages; “an on-site business case benefits assessment of migrating from Retek to SAP, delivered by SAP or one of its retail industry partners”; and SAP training.

The CIO of the $3 billion Wawa convenience food chain was frustrated that various business units saw business data in different formats—and, consequently, were basing decisions on different numbers.

So, he sought bids to consolidate all retail software systems and present a more unified view for the 13,000-employee chain with stores in Pennsylvania, New Jersey, Delaware, Maryland and Virginia.

Microsoft Corp. formally unveiled Microsoft Point of Sale on Wednesday, marking the Redmond, Wash., company’s official entrance into the low-end POS market with a product designed for small retailers and especially those with only one store.

Although there are many niche products in the low-end POS market, Microsoft Corp. is competing with only two: Intuit Inc.’s QuickBooks POS line; and the low-cost, somewhat reliable ECR (electronic cash register), which is still popular among many small retailers.

Barb Seitz’s craft business is doing well, but the owner of Barb’s Custom Sewing needs to sells many of her products on the road, often at trade shows.

Today’s wireless POS (point-of-sale) technology allows her to process orders in the field, but she has received an unexpected bonus: lower transaction fees because she rarely if ever needs to pay a “card not present” charge.

Little E-Commerce turned 11 years old in 2005 and, like its human counterparts, it was an awkward part of its corporate adolescence.

It was no longer the cute little tyke from ’95 and ’96, with those adorable Web sites selling dog food from around the world, which its corporate parents dutifully placed on their boardroom freezer door.

There are tons of practical definitions of how using technology in retail is strategic versus tactical.

One definition we’re fond of is quite practical: Using technology to truly help your customer is strategic, in that it will make those customers more likely to repeatedly come back and spread favorable word-of-mouth endorsements. Using technology to address a short-term problem—or to help your bottom line but not the customer’s—is tactical in that it is unlikely to improve revenue or profits for the long-term.

Point-of-sale terminal shipments grew about 8 percent in Europe, the Middle East and Africa in 2004 compared with a 5 percent annual increase in 2003, according to a market share study from the IHL Consulting Group.

U.S. POS shipments increased almost twice as much (15 percent) during the same time period, said IHL President Greg Buzek.

Retailers and consumer goods manufacturers experimenting with RFID are still seeing higher-than-expected error rates, but they are starting to work out low-tech workarounds, according to a major European RFID analyst company that has analyzed about 1,400 recent radio-frequency identification trials.

A third definition for “POS” is two too many for this columnist. Beware the ides of DEC.

The high-tech industry in general—and retail IT is certainly no exception—loves acronyms. The more obtuse, the better. Engineers, designers and programmers come up with them because it’s fun. Marketing execs use them to simultaneously impress and baffle customers. And PR people use them because … well … the young ones don’t know any better.

When Oracle bought retail-software specialist Retek, it learned a $670-million lesson about the new importance of retail software and its own inadequacies on the POS front.

According to SEC filings as well as interviews with executives, attorneys and consultants on both sides of the battle, the battle for control of Retek Inc. was inadvertently influenced more by PeopleSoft than anything else.

When the $10 billion 1,000-store Winn-Dixie grocery chain went Chapter 11 (bankruptcy reorganization), the initial employee reaction was shock.

But the chain’s CIO said the secondary reaction was a remarkable focus on core business issues, including the strategic use of technology.

When customers step into a cab from the Hello Taxi company in Brookline, Mass., they don’t have to worry about fumbling in their pockets for cash, or about swiping their credit card in a moving vehicle, or even about finding their wireless fob to wave in front of a reader. To pay and tip the driver, passengers just say the last four digits of their cell phones, and then they can run.

Large retail chains have always had a healthy dose of a shell game in their heritage, exemplified by the highly marketed new larger bottle of shampoo and the much higher, entirely unmarketed price tag that goes with it. A price increase by any other name still delivers fewer hair washes per dollar.

When it comes to retail technology, it seems those habits are hard to break.

The 1,200-store Ritz Camera chain wants to let customers drop off film without having to slow down and thinks RFID-enabled contactless payments are picture perfect. With competitors including Wal-Mart moving in, this specialty retailer is stressing expertise and getting people in and out quickly.

Vice President of Information Systems Bob O’Hern (Ritz doesn’t have a CIO, but he acts in that capacity) said he likes the RFID capabilities within a contactless payment system, but doesn’t yet see its value in his supply chain.

As Oracle and SAP engage in their half-billion battle for who will takeover retail software vendor Retek, the most obvious reasons for the fight are not the true ones.

The biggest news this month in retail has been the battle between $9 billion SAP and $3 billion Oracle to take over retail software vendor Retek, which had barely $174 million in revenue last year and less than $7.7 million of profit. But that’s pretty good compared with the prior year, when it lost a little more than $20 million.

As far as the retail customers of Retek are concerned, the current battle between Oracle and SAP for control of the Minneapolis retail technology firm would be better won by Oracle, according to an analyst report published Wednesday by the Aberdeen Group.

With causes ranging from new, low-priced vendors to needing more lanes open simultaneously, IHL Consulting Group reported that prices for typical point-of-sale base units in North America plummeted, from about $2,200 in 2002 to $950 in 2004.

In the middle of Albuquerque, N.M., sits a 170,000-square-foot chunk of land that is slated to be the site for a new kind of retail store: one where customers can buy a week’s worth of groceries without ever having to set foot outside their car.

On paper—and, thus far, that’s the only place this grocery store exists—this proposal seems to have plenty to offer both retailers and customers.

Under The Damned-If-You-Do category, Best Buy in-store Web displays seem to show different pricing. It’s innocuous, but it shows why regional pricing may no longer be worth the effort.

Sometimes, pushing the technology envelope is simply not worth it. The thought leaders tend to get criticized for the flaws of the new approach and, if it does take hold, they rarely get the credit years later for having taken the chance.

As Chinese consumers suddenly start to embrace the retail store, orders for point of sale systems are soaring, according to a study from IHL Consulting Group.

IHL projected China’s accelerating 20 percent annual growth in 2004 would catapult it in 2005 beyond the POS sales of Germany, which is Europe’s largest POS market.