Evan Schuman's StorefrontBacktalk

ISIS has finally named retail names for its mobile-wallet trial this summer in Salt Lake City and Austin. On Tuesday (May 15), the mobile-operator consortium announced that some (but not necessarily all) area Macy’s, Dillard’s, Foot Locker, Champs Sports, Aeropostale and Jamba Juice stores will be accepting mobile payments during the ISIS trial, along with 19 local merchants in Austin and 29 more in Salt Lake City.

That’s not a bad turnout for a normal technology trial. But ISIS is promising just hundreds of locations in cities with a total population of nearly a million—and considering the weak consumer response so far to mobile wallets, anything less than an overwhelming assault may already be doomed.

Now it is IT’s turn to take the blame for JCPenney’s woes. On Tuesday (May 15), JCPenney COO Michael Kramer told analysts that problems during the chain’s terrible first few months under its new “Fair and Square” pricing approach (store traffic down 10 percent, sales down 20 percent) were compounded by out-of-control inventory management and legacy system maintenance that ate up 90 percent of the IT budget—both fundamentally IT problems.

The result: It costs JCPenney at least $600 million per year more than it should to run the chain—which explains a lot about the quarter’s $55 million operating loss. “I can think of no other thing to say about our systems and our IT infrastructure, and I have seen a lot of them: It’s a mess,” Kramer said.

Here’s one for the marketing ethicists out there (is “ethical marketing” an oxymoron?): 18-year-olds come into the retail CRM world as clean slates, even if they have been active E-Commerce and M-Commerce shoppers for eight or nine years. It is illegal to solicit or sell data about children younger than 13—and what can be collected and used about those aged 13 to 17 is highly restricted. When that veteran shopper turns 18, though, can all of his or her juvenile shopping history be sold or even used?

One online payment vendor is preparing to sell tons of youth purchase data—apparently, this is the first time anyone has tried—avoiding immediate legal problems by offering the data in aggregate.

Is online-versus-in-store a zero-sum game? Retailers with E-Commerce experience know the answer, but financial analysts have a different view. In a report this month on online retailing, Citi hits the points you’d expect: Showrooming is bad; “omnichannel” is good. But one of the report’s “questions that remain” will likely raise your blood pressure: If, say, 12 percent of your sales are now online, “does that mean that bricks and mortar retailers need 12 percent fewer stores?”

It’s a question that makes perfect sense to stock watchers—but it completely misunderstands how merged-channel retail works.

What if having wireless in-store access isn’t really that important? Retailers’ efforts to make sure customers have constant Wi-Fi access—to fuel mobile functions such as barcode scanning, demo watching and, potentially, even mobile wallet efforts—has certainly proven problematic, whether the reasons are wireless-unfriendly old buildings or young shoppers gulping all of the bandwidth with movies or games.

Beyond encouraging shoppers to use over-the-air access that chains need do nothing to facilitate, what if apps used the mobile device’s memory to play those demos and to look up those barcodes, and then waited to update until the device was reconnected? Shopkick is using one version of this modified store-and-forward mobile strategy, as of an update deployed last month.

ABI Research on Tuesday (May 8) published a survey that found that 45 percent of smartphone users who have downloaded the retail-branded app of a chain visit that brand’s store more often. But it’s the drilldown behind those stats that is particularly interesting. To start with, it’s not merely a self-limiting sample. Rather, it’s the universe of shoppers who download, say, the Lowe’s app, and who are likely to already be huge fans of that brand.

The most striking thing about those stats is that they are less than 50 percent. That means the opposite it also true; namely, that 54.2 percent of that chain’s biggest fans do not find that the app makes them go to the store more.

As JCPenney continues to recover from its self-inflicted nice-price-all-the-time effort, the chain’s latest cost-cutting move came this week when it quietly killed associate commissions and cut back many of their hours. Cost-cutting is fine, but killing commissions right now—as it desperately tries to fight off E-tail incursions in its stores—seems stunningly ill-advised.

As retailers complain about showrooming—and its posterchild, Amazon—the only meaningful way to fight back is to make the store experience so pleasant, efficient and fun that consumers would much prefer to shop than click away on a phone, tablet or laptop.

What Google, PayPal and ISIS are trying to assemble in mobile payments, MasterCard wants to dismember. On Monday (May 7), the number-two payment-card brand unveiled a mobile wallet and an E-Commerce payment system that are designed to cut out any middlemen horning in between customers and retailers and payment networks.

Ironically, while MasterCard’s PayPass Wallet for NFC-equipped phones got most of the attention, that’s still largely a pipe dream—MasterCard hasn’t even talked any mobile operators into giving it access to the NFC chip. But the online payments effort will offer tokenization to reduce PCI scope for E-Commerce. The bad news: You can probably forget about any interchange relief.

In a series of mobile trials in subway and train stations in Philadelphia and Chicago, online grocer Peapod has been trying to drive sales of milk, diapers and dog food to commuters with a few minutes on—and a smartphone in—their hands. The trials had to deal with mobile technologies with a very uncertain future—such as QR codes—and the frustrating logistics of demoing in cramped public transportation centers.

Peapod got the idea from a wildly successful mobile QR trial that Tesco did in South Korean subways. Peapod’s attempt is apparently the first to try and replicate the Tesco efforts in the U.S.

Retailers spend an awful lot of time and money gathering and analyzing online and in-store stats about customer behavior. But what most seem to not do is try and connect the dots.

What did the shopper do right after scanning that barcode? If the answer can be found in mobile analytics data, you’re fine. But if the answer can only be found by overlaying that mobile data with in-store CRM data, most won’t see it. What about synching E-Commerce activity with calls to the call center two minutes later? Or linking an E-Commerce search to an in-store POS action 20 minutes later? How about social activity matched with any of the above?

When Walmart launched its E-Commerce cash program on April 26, did it open the door to evil-minded rivals by giving them the means to falsely lock up merchandise? That is just one example of the many implications behind Walmart’s move to enable people to use cash to make online purchases.

Beyond new security holes on the risk side, the reward side is equally huge. While everyone seems to have focused on the general unbanked audience, a much more interesting prospect for this program is teenagers. Plus, this is sort of an anti-showrooming move, where online shoppers are being lured into the stores. Revenue sharing between Walmart channels is also a point of nervousness with this program. And a store’s inability to cancel such online orders—even if the customer then finds the item on the shelf—is problematic, too. This is a rare example of the kinds of compromises—between online and in-store operations—chains must make these days.

The challenge of giftcards has always been getting customers to remember them when they’re actually near the store where they can be used. With that goal in mind, a giftcard service—working with Gap and Sephora—is trying for a marketing triple play: mobile geolocation on top of Facebook data on top of customized giftcards. When a customer is near a retailer whose giftcard they have, it will loudly flag that fact to the customer.

The geolocation opt-in alerts are an interesting twist, especially when a consumer is walking in a city (locally or when traveling) and has no idea that a particular retailer has a store three blocks to the right.

Best Buy will “reexamine our processes around the Express kiosks” after an embarrassing column from a Time Magazine writer, who just happened to try one of the machines at a Hilton in Chicago. The tested Best Buy Express kiosk—which is owned and handled by a vendor that also creates them for Macy’s and Apple—referred the customer to “a store representative” even though there obviously were none, offered an electronic receipt but then forced a written one and, most critically, offered significantly stricter rules for product return.

All this despite a rule that the kiosks are supposed to have the same policies as Best Buy stores. This situation also renews questions about how much—or how little—control retailers should have over kiosks that loudly proclaim their brands.

Sears on Tuesday (April 24) launched a service to provide managed technology services for “brick-and-mortar enterprises across all industry verticals.” It is a move partly aimed at Amazon’s cloud service, with Sears promising much more customization and hand-holding. For many retail observers, this was a baffling step, another non-strategic distraction at a time when the 119-year-old retailer needed to do nothing more than focus on selling more products in its stores.

For Sears, though, the move made fiscal sense. With all of those dollars invested in IT systems—with more capacity than Sears needs—why not, in effect, lease out some of it? Put another way: Turn IT from a pure cost-center to a mostly cost-center that generates at least some revenue.

eBay CEO John Donahoe, the man who popularized NFC standing for Not For Commerce, seems to have developed a love-hate relationship with near-field communication. He hates NFC and firmly believes it will never be adopted by large retailers, unless it is adopted by large retailers—in which case, he’ll love it.

Oh, and Donahoe not only believes that NFC will never be adopted by large chains, but he has a specific prediction of when that adoption will happen—just in case he’s wrong. And, no, we’re not making any of this up.

In Mark Rasch’s legal column this week, he points out that online purchases by minors are a potential legal nightmare and that a federal judge is now deciding the retail issue. But what if the case goes against retailers? Frighteningly, the way many digital purchases are processed makes it all but impossible to comply with the law.

How could iTunes refund an already listened to song or an already played game? That’s not merely a business/profit question. From an IT perspective, there is often no mechanism to do it. What might start out as a legal problem will almost instantly morph into an IT problem.

It’s not just those birds that are angry these days. The process by which Apple allows teens, pre-teens and even toddlers to download free apps, and then purchase game currencies within these free apps, may have landed the computer giant in hot water—with both parents and at least one federal district court in San Jose.

The case revolves around a longtime legal reality: Minors cannot agree to a contract. If they pretend to agree, it’s non-binding and can’t be enforced, writes Legal Columnist Mark Rasch. But what if an adult gives the child their password and permission to make a purchase? It’s still the child doing it and the contract, therefore, probably can’t be enforced.

What began as a Home Depot effort this month to get installers to boost the chain’s Web traffic has morphed into a strange SEO Google mess, with a Home Depot E-mail encouraging those service providers to use invisible links on their sites.

This is not merely an issue of violating the rules of a major search engine. A lot of these partners—carpet installers, for instance—have minimal E-Commerce teams, which means they rely on partners such as Home Depot for E-Commerce guidance. And when chains give advice that is false and endangers the ranking of the sites of those partners, it is a problem.

As retailers accelerate payment experiments, a recent Wal-Mart experience with a well-established approach offers a cautionary tale. A Buffalo, N.Y., woman this month walked into her local Wal-Mart, gave an associate $1,000 in cash and asked for it to be loaded onto a Walmart MoneyCard, in preparation for a vacation. A couple days later, the customer discovered that the money had been removed by a thief in another country.

The fact that it was a thief who stole the funds is undisputed. However, the immediate next actions of Wal-Mart and Green Dot—which manages MoneyCard for Wal-Mart—is a textbook example not of what should not be done, but how it shouldn’t be done.

7-Eleven on Monday (April 16) started a new age-check system, one that provides digital proof that a specific person’s credentials were checked at a specific date and time. This will provide the nation’s largest convenience-store chain with a new independent way to fight back when police say that an underage customer’s driver’s license had never been checked.

But it won’t address many of today’s age-ID problems, including waiving license checks if the associate thinks the person is old enough, license photos often being bad enough to fool weak authenticators, and under-age consumers using the driver’s license of an older sibling. Still, 7-Eleven has crafted ways to deal with some of those gotchas with the new system.

The POS industry on Monday (April 16) had the most significant announcement in the last 10 years, as Toshiba TEC announced the purchase of the IBM Retail Store Solutions Business. The fact that IBM RSS was for sale was one of the worst kept secrets in the industry among analysts.

Several years ago, when Tom Peterson was general manager of RSS, it was a much larger group than the $1.15 billion in revenue reported in the release. Pretty much everything that wasn’t mainframe or core supply chain fit under RSS, writes GuestView Columnist Greg Buzek.

Buy low, sell high. Pretty simple. But a case currently before the U.S. Supreme Court tests whether manufacturers can prevent retailers from buying their products for the lowest price simply by, for example, printing the labels for the products outside the United States.

Take the example of a bottle of L’anza brand shampoo, suggests Legal Columnist Mark Rasch. The manufacturer in California sells the shampoo for, say, $5 a bottle in the U.S., but sells the same shampoo overseas for only $3 a bottle. It is perfectly legal for a retailer to buy the genuine shampoo overseas, import it back to the U.S., and then resell it for a profit. But add a label to the bottle of shampoo, and the situation may change.

As retailers—over the years—have asked for POS improvements, vendors have responded by baking changes into the core products. The problem is that the results are now over-burdened with so many options they are a nightmare to use, tragically difficult to support and wallet-emptying to purchase.

Retail Columnist Todd Michaud has a suggestion: Go pull out the last POS RFP you put together and see what percentage of requirements that were in the RFP are actually in use today. It’s a safe bet you’ll be surprised, especially if it was a long time ago.

When IBM on Tuesday (April 17) announced it was selling its entire POS business to Toshiba TEC for US$850 million, it was arguably the most explicit sign yet that the retail POS hardware business is on its last legs. Not IBM’s POS business, but retail POS activity in general.

Beyond IBM’s history of selling out key areas (printers, laptops, disk drives, etc.) a year or so before the market is about to die, this time it’s the popularization of in-store tablets along with the integration of mobile and E-Commerce that is aggravating POS’s demise. Retail Columnist Todd Michaud predicted in January that this year would see the death of the traditional POS. IBM apparently agrees. (Related Story: Unhappy With Your POS System? Take A Peek At Your Last POS RFP. Don’t You Feel Bad Now?

When Wal-Mart announced Monday (April 16) that it was nominating Google exec Marissa Mayer to its board of directors—indeed, it was expanding the size of the board so she could be added—the retailer telegraphed an awful lot about its thoughts on social media, merged channel and, in particular, mobile.

It’s striking, though, how much of a contrast the 36-year-old Mayer makes compared with the existing members—with an average age of 60, the board is heavily weighted with CEOs of non-tech companies, venture capitalists and Wal-Mart veterans. The board seems to be acknowledging that it may not be the ideal group to oversee Wal-Mart’s moves into the worlds of Twitter, Facebook, YouTube, geofencing and Foursquare.