Evan Schuman's StorefrontBacktalk

Between the time when a typical quick service restaurant sells a customer a drink and that customer goes to a self-serve drink station and gets their drink, it’s typical for consumers to change their minds. The restaurant doesn’t care as it typically sells all drinks for the same price. But Coca-Cola certainly cares and it’s opted to try and do something about it, crafting a machine that offers more than 100 varieties of sodas, juices, teas, and flavored waters and reports to the mothership with every selection.

The move has huge potential mostly because, from the consumer’s perspective, it’s so non-interruptive. Consumers are already in the habit of using self-service beverage machines at fast-food facilities, so it should encounter almost no resistance. All that will be visibly different is a much greater amount of beverage choice. As long as the machine’s interface is clean, that shouldn’t be a problem. But if the options look—even at a glance—overly complicated or time-consuming, things could turn ugly quickly.

As retailers this month celebrate (or at least give a yawning acknowledgement of) the 35th anniversary of the Universal Product Code (UPC), there are increasing signs that merchants aren’t quite ready for its proposed replacement, the GS1 DataBar. The economy is just one factor in the delay, but it’s a key one. With extensive store closings, retail layoffs and dramatic budget cuts, Top Ten priority lists have become Top Three priority lists. Those tighter priorities have to be completed with fewer IT people, which means anything that won’t likely yield an immediate margin boost isn’t likely to make the initial cut.

Ahold Information Services Vice President of Applications Development Alan Williams argued that a January replacement of the current UPC-A barcode with the DataBar “would create a significant hardship for a large number of retailers.” Ahold, a Netherlands-based grocery chain operator with sales of $40 billion, has about 1,400 stores in the U.S. including Stop&Shop and Giant.

It’s well known that temperature-detecting active RFID tags have extreme value with perishable goods transportation, but a new study delves into microclimates, which indicates subtle differences of temperature in different parts of the same pallet. The Aim Global story looks at the IT ROI implications and whether it could change the business case for active tags.

“Each link in the cold chain must have the ability to reject partial shipments based on temperature data. This could make it either more expensive for the supplier (because some goods are now being rejected that had previously been accepted) or less expensive (because whole shipments are not rejected because of a single temperature reading). In either case, there would be a financial incentive to more closely monitor temperature and other critical conditions,” the story reported. “Customer refusals or charge-backs for less-than-fresh goods might provide an incentive for processors to pressure growers/packers to tag individual cases so that improper handling at the beginning of the supply chain does not adversely affect a processor’s or distributor’s downstream revenues.”

NEC is preparing to sell its next-generation of tag readers/writers at a price more than 90 percent lower than current pricing, according to a report in Japanese business publication The Nikkei.

“The tags are compatible with all of the six worldwide radio communications standards. NEC is ready to accept orders beginning as early as this July,” the story reported, adding that some “10,000 of the new tags will be available for approximately (the equivalent of) $100.”

The scenario of consumers using their smartphones to barcode scan for everything from price lookups to quickly gathering more product information via the Web is nothing new. But despite all the talk, it hasn’t progressed much beyond being in a lot of hypothetical scenarios.

Is Google’s entry into the space likely to change that? U.S. and U.K. owners of mobile devices running the Google Android operating system can now download from Google a “Barcode Scanner” app that allows them to use their phones to scan UPC/ISBN codes with the phone’s digital camera. The application has been integrated into Google Product Search for Mobile.

Ever since StorefrontBacktalk has covered the news of retail technology, E-Commerce and security, we’ve often been at a loss for a way to deal with a wide range of research documents, from white papers, case studies and analyst reports to detailed slide presentations on new technologies to transcripts of panel discussions.

Sure, we can do news stories and columns on these documents but we thought some some readers might want a database of all of these documents as they evaluate new issues. We’re not sure if we have the right answer, but today we’re launching our best shot: StorefrontBackground. StorefrontBacktalk and StorefrontBackground are linked and share many of the same resources (such as our image library, some of the editors, shared servers, etc.) but are, editorially, polar opposites.

With the E-Commerce alternative payments space heating up, the market is getting ready for a nasty fight for third-place between Google and Amazon. EBay’s two contenders in the race—PayPal and BillMeLater—are now essentially tied with each other for having the most large retailers as clients.

Google hasn’t been faring especially well, with some seeing Google’s move in April to boost prices as desperate. Then on Thursday (April 30), Amazon counterpounched, offering to waive fees for five months for retailers who would be new customers for its Amazon Payments program. The Amazon offer was quite limited, excluding any existing consumers, having the fee waiver only lasts five months (from April 29 through Sept. 30). Technically, it would be five months for those who signed up immediately. The deal isn’t for five free months, it’s free transactions until Sept. 30, apparently regardless of when a merchant signs up. The deal also has an especially low ceiling, with Amazon saying that the fees will start sooner than Sept. 30 if $2 million or more is sold.

Riding small CPUs enabling much smaller form factors, Motorola on Tuesday (April 28) a 1.8-pound fixed RFID reader measuring 7.7 inches long, 5.9 inches wide and 1.7 inches deep. The vendor described the FX7400 series units as being “less than half the size of traditional fixed RFID readers, making it ideal for retail stores and other customer-facing environments.”

But analysts were less than impressed, pointing out that the Motorola units were actually larger than many other major RFID readers today, despite being smaller than other Motorola RFID readers. “I definitely classify this as ‘ho hum.’ ThingMagic and Impinj as well as some others have much smaller form factors and more functions,” said Pete Abell, a longtime RFID analyst (used to be with IDC) who today works as an independent consultant.

Washington State’s governor has signed into law one of three bills relating to RFID and privacy, a measure that prohibits, with a dozen exceptions, the scanning of RFID chips by anybody other than the company that attached them.

The signed bill includes a number of significant changes to the initially-proposed measure which was denounced in January by Dan Mullen, President of the Association for Automatic Identification and Mobility (AIM), as potentially being “traumatic” to retailers and consumers. Mullen, according to an RFID Journal report, believes the enacted version is “pretty reasonable” because it focuses on banning the surreptitious scanning and reading of RFID chips, as opposed to the devices directly.

The worldwide RFID market, which reached $5.25 billion in 2008, will climb to $5.56 billion by the end of 2009 with most of the money, about $3 billion, being spent on RFID cards and associated services, according to a new report by RFID tracking firm IDTechEx. The study asserts much of the growth of the RFID market can be attributed to “government-led RFID schemes” including transportation projects, national ID initiatives, military uses and animal tagging.

However, not all areas of the RFID world are in good shape. According to IDTechEx, the adoption level for pallet and case tagging has been slow. “The tagging of pallets and cases remains a failure, with only 225 million passive UHF tags used for this application in 2009 – a far cry from the 35 billion tags that one consumer goods company alone predicted that it would be buying in 2009, when they presented at an event in 2003.”

Grocery chains have for years struggled with self-checkout systems that couldn’t easily deal with produce, POS stations that simply couldn’t handle complicated coupons and barcodes that didn’t understand expiration dates. But in a move that many in retail IT see as the potentially biggest change in product labeling since the rollout of the UPC barcode 35 years ago, the GS1 DataBar is looking to sharply increase its retail presence as of January. Among the chains most vocally advocating for the advance are American chains Walmart, Winn-Dixie and Krogers plus Canada’s Loblaw.

At its core, the DataBar codes are today’s barcodes but are much more tightly packed with much more information. But not all of this transition will be akin to scanning sugar and spice. Most chains will have to absorb non-trivial costs to support the upgrades, a tricky move at a time of store closings and massive layoffs. Most product scanners built since 2000 are capable of reading DataBars but investments need to be made beyond just the scanners.

In a land “Beyond PCI,” there’s trouble brewing. Issues involving everything from tokenization to end-to-end encryption are being debated and the PCI SSC is hiring a consulting firm to look into the implications of these (and other) technologies and processes.

This all raises the issue of “should retailers wait for the PCI SSC to ‘bless’ or integrate so called ‘beyond PCI’ technologies into the standards?” GuestView PCI Columnist David Taylor’s answer is a profound “no.”

The POS system is the Rodney Dangerfield of the retail IT world: It gets no respect. (Could have gone back yet further and said it was the Red Buttons of the retail IT world because it never gets a dinner, but that’s an even more obscure pop culture reference.)

Chains are just starting to see the business ROI potential of POS—especially when working with CRM—to fuel upsells and to legitimately increase loyalty. But few look at POS as a potential protector and a protector against some potentially very large expenses. Consider four items from the last few days.

With the E-Commerce alternative payments space heating up, the market is getting ready for a nasty fight for third-place between Google and Amazon. EBay’s two contenders in the race—PayPal and BillMeLater—are now essentially tied with each other for having the most large retailers as clients.

Google hasn’t been faring especially well, with some seeing Google’s move in April to boost prices as desperate. Then on Thursday (April 30), Amazon counterpounched, offering to waive fees for five months for retailers who would be new customers for its Amazon Payments program. The Amazon offer was quite limited, excluding any existing consumers, having the fee waiver only lasts five months (from April 29 through Sept. 30). Technically, it would be five months for those who signed up immediately. The deal isn’t for five free months, it’s free transactions until Sept. 30, apparently regardless of when a merchant signs up. The deal also has an especially low ceiling, with Amazon saying that the fees will start sooner than Sept. 30 if $2 million or more is sold.

Macy’s, accused by the Los Angeles District Attorney’s Office of selling lead-tainted necklaces, has taken a confrontational—and controversial—stance: It is refusing to share its CRM databases with the government, even if it means that consumers and children who are at risk of lead poisoning can’t be contacted. Macy’s has declined to comment on the situation—other than an E-mail to reporters saying that it won’t comment—so the only version of events is coming from the D.A.’s office, which says that Macy’s has provided no explanation whatsoever.

This leaves open the question of whether Macy’s is refusing to turn the files over for legal—or other—reasons or if it simply cannot access and thereby produce such records, for technological and logistical reasons. But Los Angeles Deputy District Attorney Daniel Wright said he is leaning more toward the “won’t” as opposed to the “can’t” theory, at least for some of the requested records. “It’s aggravating,” Wright said. “It’s inexplicable to me.”

Given how far e-tailers are pushing everything to try to get a little more margin room, it’s always perplexing how ineffective the shipping tracking functions are for almost all but a small handful of major E-Commerce sites. This point is detailed quite nicely in a recent E-Commerce Times column. Amazon, which seems to be the exception for almost every E-Commerce rule, is the gold standard for tracking shipping today. Not all chains can afford to replicate the kind of operation Amazon has, but some of this is simply not that complex.

With mobile and social networking sites opening consumers’ minds to the possible, and Amazon continually illustrating the practical, e-tailers need to rethink their shipping strategies.

The RFID industry is being slowed, but not stalled, by the recession, according to ABI Research. The company’s latest market data shows that total revenue earned from RFID transponders, readers, software and services will exceed $5.6 billion by the end of 2009. “The recession has had an undeniable effect on deployment plans,” said ABI Research practice director Michael Liard. “Despite some project deferrals and terminations, there will be market growth, albeit fragmented.”

The RFID market is “worthy of cautious optimism in the near to mid-term, particularly in the closely-watched passive UHF segment,” said ABI Research. And while the RFID industry, like most others, is struggling, the researchers said they “would not characterize it as being in a state of despair or turmoil.”

Following a December glitch at Macys that saw 8,000 customers double- and tripled charged for debit transactions comes word of an eerily similar triple charge glitch at Best Buy this month. In both cases, the retailers initially painted the problems as isolated incidents. In both cases, the retailers thought initial debit card swipes didn’t work and asked the customer to try again, sometimes twice more. And in both cases, the banks removed money from the consumer’s bank account equivalent to two and three times the price of the product.

Could these be coincidences? Might they indeed be isolated debit card incidents? Absolutely. But this also might be an initial heads up that the debit card system relied on by major retailers today has inherent flaws. What happened, with both Macys and Best Buy, with software specifically designed to look for and prevent these kinds of multiple identical charges? What about the systems at the card processors and the banks?

A reader was visiting Walmart.com this weekend because she was about to run out of printer paper and knew she had to drive by a Wal-Mart that afternoon. Her mission was simple: She wasn’t especially picky about which plain printer paper, but she just wanted to make sure it was in stock at her local store.

She hit Walmart.com and found tons of different printer paper, all of which looked quite acceptable. But she tried one or two and searched if it was in-stock at her store. Nope. She simply wanted to ask the site, “Limiting your answer to this one store, what printer paper does it have in stock?” If she was only interested in one very specific brand and paper type, she could have searched that store. The generic searches made so easy on the site, though, wouldn’t work when focused on one store.

For years, one of the advantages of working in IT in a large chain has been the ability to deploy in-house and best-of-breed strategies as needed. It was that ability to craft a package that precisely fit the demands of a project that made some of those jobs enviable. But as dollars have tightened, a funny thing happened: many of those packaged apps starting getting a lot better.

New stats coming from research at RISNews.com are suggesting that, as suspected, homegrown packages are losing their home. IT execs saying that their “preferred IT deployment philosophy” is “deploying packaged applications with few modifications” came in at 53.8 percent, almost twice as popular an answer as “best of breed” at 28.8 percent. Even though RISNews has seen that trend for years, the difference had never been so stark. While the packaged response has been right around today’s 53.8 percent figure for years (ranging no farther than from the low- to mid-50s), best-of-breed has suddenly plummeted. It was at 46 percent in 2006, 45 percent in 2007 and 47 percent in 2008, before plunging to 28.8 percent this year.

Last Monday (March 2), Tradestone Software announced that it was “working with the largest retailers in the world to form the first PLM for Retail Standards Committee.” And that was true. But the group consisted solely of the vendor’s own customers. Funny thing, but the vendor’s statement announcing the committee forgot to mention that detail. It’s a lot easier to work out a standard if everyone is using the same software.

Having gotten that off our product lifecycle management chest, the Tradestone effort does have quite a few things going for it. First, it’s A Team list of retailers—including Macy’s, Kohl’s, Lowe’s, Urban Outfitters and Pacific Sunwear–forces it to be taken seriously. Secondly, there has been so little truly accomplished with PLM standardization that practically any effort should be applauded.

Many retail IT budgets in 2010 will have about the same ratio to sales they had in 2008, and a decent percentage of those budgets will be boosted to cover projects currently in progress, according to a new report. Surveys like this raise skeptical eyebrows, as they should. Do those IT execs truly expect their budgets to go up or are they merely hoping that they’ll go up?

Even more cynically, is it possible that those execs know that surveys like this tend to impact CEO/CFO expectations and, therefore, they’ll give the answers they want their CFOs to believe? Even if the execs are being straight with the survey takers—and that the survey takers are being straight in reporting all of the collected data without sanitation—we have to wonder what was behind those answers.

Here’s a different argument to make to the CEO next week: Increasing your E-Commerce investment will help save the world. (Or, to paraphrase a line from the original Ghostbusters film: If you approve this E-Commerce plan, you will have just saved the lives of 6.7 billion potential registered site visitors.)

OK, maybe it’s a reach, but not so much as one might think. A study published by Carnegie Mellon University Tuesday (March 3) found that “shopping online reduces environmental impact with 35 percent less energy consumption and carbon dioxide emissions compared to the traditional retail shopping model.”

Wal-Mart has historically had a strong fondness for its own homegrown apps, given the $401 billion chain’s rather absurdly large size. The company has liberalized that policy recently, allowing a few shrink-wrapped enterprise apps to slip in. Now there’s a report in Economic Times that Bentonville is seriously considering an Indian business process outsourcing contract that could include “non-core processes of procurement, merchandising, finance, accounting and payroll” and be valued at as much as $500 million.

The story quoted from a Wal-Mart document that said “Wal-Mart will expand staffing of certain elements of IT application maintenance and development with some of India’s leading information technology firms. India is one of several countries that the company is targeting as part of its remote sourcing model for IT activities.” Vendors in the running, the story said, include IBM, TCS, WNS and Wipro.

It’s not surprising that so much has been made of the decision by Procter & Gamble (P&G) to abandon its RFID tagged promotional displays at Wal-Mart.

Given P&G’s reputation for ROI worship, many assumed the company pulled the plug because RFID was failing the test. What is closer to the truth is that the test failed, not the technology. And to the extent that Wal-Mart was as much a player in this trial as P&G, it could also be said that the test didn’t fail, the tester did.