StorefrontBacktalk

Yes, Virginia, We Really Do Need A QIR Program

Walter Conway — Wed, 16 May 2012 14:41:07 +0000

Integrators and resellers seem to be resisting a program that would provide stronger enforcement over, well, integrators and resellers. PCI Council General Manager Bob Russo talked with PCI Columnist Walter Conway about the resistance (the program is "sorely needed"), the pricing and the nature of the training. And given the number of industry insiders Russo worked with to create the program, he bristled at the suggestion that the Council worked in a vacuum on this one.

Russo said the training will be an online course so nobody should have to travel, Conway writes.

Big Data Is Exactly What You Think It Isn’t

Todd L. Michaud — Wed, 16 May 2012 14:13:38 +0000

Who cares about Big Data? You should. All of a sudden, Web logs that were kept simply for troubleshooting purposes can now be mined to determine valuable information about customers' preferences, writes Retail Columnist Todd Michaud.

Logs that are created by physical machines can now be analyzed en masse to look for information to help advance a business. Data from social networks can now be mined for customer sentiment. These problems were too big and too complex before. But now, answers are within reach.

A Better Way To Search StorefrontBacktalk

Evan Schuman — Wed, 16 May 2012 13:45:36 +0000

With more than 3,000 stories, columns and GuestViews in the content database here at StorefrontBacktalk, we thought it was time to do a little upgrading. Starting this week, readers (both free and Premium) can search for stories by limiting the search to just the story’s headline—as opposed to the headline and the full text. (Note: Right below the search bar, readers can choose HED Only or Story And Hed.)

The ability to isolate a search to the headline can be useful in two ways. If you happen to remember that the headline mentioned Target, for example, you need not see every story that mentioned Target (or even used the word “target”). The second way is practical. If you want a story that is primarily about tokens—and not a story that merely mentions the word somewhere—the headline-only search can be helpful.

How Often Do Retail App Users Refer Friends? The Stats Tell Two Stories

Evan Schuman — Thu, 10 May 2012 05:25:46 +0000

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.

JCPenney Dumps Associate Sales Commissions

Evan Schuman — Thu, 10 May 2012 05:05:39 +0000

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.

MasterCard Aims To Take Mobile Wallet Rivals Apart

Frank Hayes — Thu, 10 May 2012 03:08:06 +0000

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.

Peapod’s QR Train Station Grocery Trial Shows Mobile Bias

Evan Schuman — Thu, 10 May 2012 02:48:03 +0000

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.

Disney’s RFID iPad Trial Is An Important Lesson When Battling Showrooming

Evan Schuman — Thu, 10 May 2012 01:20:58 +0000

As E-tailers continue their incursions into rivals’ physical stores, the only viable defense is to radically upgrade customer service and the overall store experience. Two of the retailers most known for this are Apple and Walt Disney World Resort. Have you ever heard of an E-Commerce site cutting into the revenue at Disney? What specific tactics can brick-and-mortars steal? Here’s a good one: Disney this month is experimenting with an RFID/iPad combo to upgrade its famous FastPass system—for letting people reserve tickets/times and thereby get much faster access to rides and events. As Disney employees carry iPads, customers’ RFID bracelets will interact with CRM and ride information.

It’s fair to argue that Disney has always been the retail exception. It pushed contactless payment by offering deep discounts, and Disney even successfully got customers to use digital biometrics (fingerprints) for park access. But that’s just the point. With a heavy enough emphasis on experience and customer service, shoppers are willing to do almost anything, including—just perhaps—forgetting all about Amazon.

Reusable Shopping Bags Traced To Girls’ Soccer Team Illnesses

Evan Schuman — Thu, 10 May 2012 00:57:34 +0000

Sometimes, we have to wonder how any customers medically survive grocery trips. We’ve reported on germ-laden shopping carts and paper POS receipts loaded with the carcinogen BPA. Late on Wednesday (May 9) came word that one of the nastiest bugs around—the norovirus—infected an Oregon girls’ soccer team and that it was traced to a reusable grocery bag the girls passed around as they shared cookies.

“The latest outbreak of norovirus reinforces the research we have conducted about the propensity of reusable grocery bags to act as hosts for dangerous foodborne bacteria and viruses,” said Dr. Charles Gerba, a microbiologist and professor in the Departments of Soil, Water and Environmental Science at the University of Arizona. “This incident should serve as a warning bell: permitting shoppers to bring unwashed reusable bags into grocery and retail stores not only poses a health risk to baggers but also to the next shoppers in the checkout line.” The scenario isn’t so far-fetched. All it takes is a bag with raw chicken that leaks—or an egg that cracks—and the bag becomes highly contaminated. It then leaves those contaminants on the conveyor belt, which it shares with the bananas being purchased by the next customer. A good hot water washing with a lot of bleach should remove the hazard, but how many shoppers even think to try?

Best Buy Facebook “Joke” Points Out The Risks Of Handling Smartphone Repairs

Evan Schuman — Thu, 10 May 2012 00:27:47 +0000

Corporate data security policies have always been a challenge. In recent years, thumbdrives, corporate telecommuting and smartphones have made such controls problematic. But the assumption has always been that the data being protected was on the hard-disks or RAM of various systems.

A Best Buy incident this month, however, is a grim reminder that saved passwords or tokens can expose employees to sensitive data—and capabilities—far beyond the bits and bytes of that device.

32-Point Font Might Save Your IT Career

Todd L. Michaud — Wed, 09 May 2012 19:23:56 +0000

It's you versus the sales guy in an epic battle over your IT career. The sales guy has a polished presentation about the features and benefits of his products and services. You have a status report. The sales guy has access to unlimited resources to make your business partners' wildest dreams come true. You have one really great guy who you've overworked to the point that you carry a ton of personal shame.

The sales guy says, "Yes. Yes. Yes." You say, "No. No. No." In this surreal world, pens Retail Columnist Todd Michaud, you are watching your hard-fought IT career be dismantled by an onslaught of companies that shake your hand and look you in the eye as they pitch your demise one product and service at a time. And you had better buckle-up, Buttercup; it's only going to get worse.

Level 3 PCI Compliance Increases Slightly, Even As Its Population Grows

Evan Schuman — Wed, 09 May 2012 18:13:53 +0000

The latest PCI compliance stats—out this week—show trivial changes from the prior report, with Level 2 and Level 3 retailers slightly increasing compliance. Level 2 went from 91 percent at the end of December 2011 to 92 percent as of March 31, 2012, and Level 3 also increased by 1 percent, from 58 percent to 59 percent.

With changes as small as 1 percent, it's hard to determine what, if anything, caused the change. The number of Level 2s dropped slightly (from 1,066 to 1,060), so it's possible a couple of the chains that left might have had compliance issues.

P2PE: No Cakewalk for Merchants, But There May Be No Alternative For Reducing Scope

Walter Conway — Wed, 09 May 2012 14:41:40 +0000

When the PCI Council released version 1.1 of its Point-to-Point Encryption (P2PE) Testing Procedures late last month (April 27), it forced an interesting question: Will P2PE be the only way to remove encrypted data from a merchant's PCI scope?

Writes PCI Columnist Walter Conway: Current PCI Council guidance (FAQ 10359) holds that encrypted data can be out of a merchant's PCI scope "if, and only if, it has been validated that the entity that possesses encrypted cardholder data does not have the means to decrypt it." The important word here is "entity." That is, the ability to decrypt the data must rest with some unrelated third party. With the emergence of P2PE, could this scoping guidance be revised to where the only appropriate "entity" is an approved P2PE provider?

The Analytics Hole: Does Anyone Connect The Dots From Mobile To Web To In-Store?

Evan Schuman — Thu, 03 May 2012 03:10:01 +0000

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?

John Lewis’ Mirror Trial The Latest In A Long Line Of Frustrated Efforts

Evan Schuman — Thu, 03 May 2012 02:05:47 +0000

For a half-dozen years, retailers have been struggling to find a way to make mirrors work as an in-store-to-Web sales device. Bloomingdale's was one of the first. Its idea was to let a shopper model prospective new outfits to the mirror, which would then transmit the images live to the Web and allow comments from total strangers or a smaller group of logged in friends.

Seems that it missed the fun social elements of physically shopping together. This week, it was British department store chain John Lewis' turn.

Macy’s, Amazon CFOs Say The Darndest Things

Evan Schuman — Thu, 03 May 2012 00:28:04 +0000

Two major retail CFOs in the last week both spoke with unusual candor. The Macy's CFO admitted how much she doesn't like coupons, but said that efforts to minimize them are doomed to fail.

And Amazon's CFO offered two interesting stats: One shows that Amazon is collecting a lot more state sales taxes than is generally perceived, and the second reports that almost 40 percent of Amazon's sales these days are not from products the E-tailer directly sells.

Wacky Legal Idea: Using Class-Action Lawsuits To Gather CRM Data

Mark Rasch — Thu, 03 May 2012 00:07:42 +0000

Here's your wacky legal strategy idea of the month: Settling a mostly frivolous multimillion-dollar lawsuit can be such a great CRM data generation mechanism that companies might consider filing such class-action suits against themselves. One recent class-action settlement delivered more marketing value to the defendant than it could have ever hoped for, pens Legal Columnist Mark Rasch.

That defendant is using the litigation to collect consumer information. It is learning the names, addresses, E-mail addresses and some purchasing habits of not only actual consumers but, presumably, about people who never bought the product and yet are interested enough (in either the product or the $20) to lie about having bought the product. There doesn't appear to be any limitation on how that information can later be used for marketing.

“Careless” Systems Integrators Now Directly Under PCI DSS

Walter Conway — Wed, 02 May 2012 23:07:29 +0000

Mistakes made by careless or incompetent payment application installers or system integrators have led to far too many data breaches over the years. In each case, even though the reseller or integrator made the mistake, the merchant bore the ultimate responsibility.

Unfortunately, system resellers and integrators formerly fell in a governance gap in PCI, and their actions were outside the PCI Council's jurisdiction. PCI Columnist Walter Conway says "were," because that situation is about to change.

Considering An Operations Person For An Open IT Position? Don’t Do It

Todd L. Michaud — Wed, 02 May 2012 21:53:06 +0000

Operations often complains that the IT team is too disconnected from the business to perform at the highest levels. Business leaders clamor for IT staff who can talk about retail operations and back-office management, not just about information security and system availability, pens Retail Columnist Todd Michaud.

Every so often, an opportunity arises to fill an open IT role with someone from Operations who has "technical aptitude." In an effort to keep the peace, a lot of IT leaders make the mistake of accepting a transfer from the Operations team rather than hiring an outside IT resource. Although it sounds almost "romantic" in design, in my experience, it almost never works out.

Walmart’s Online Cash Creates New Fraud Problem

Evan Schuman — Wed, 02 May 2012 20:51:03 +0000

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 Privacy Triple Play: Digital Giftcards Using Facebook Data And Geolocation

Evan Schuman — Wed, 02 May 2012 20:37:24 +0000

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.

Google Trusted Stores Is Perhaps Too Trusting

Evan Schuman — Thu, 26 Apr 2012 05:24:07 +0000

Google is trying to expand its Google Trusted Stores program—where participating retailers give Google average shipping times and Google grades them on customer resolution issues—by letting merchants display the results in Google ads. But there’s an issue with the Trusted Stores program itself, and it speaks to trust.

The idea that this is a good guide for consumers to find responsive retailers has two hurdles. First, retailers who know they have issues would simply opt to not participate, which itself skews the results, along with the fact that many merchants (especially smaller ones) are unaware of it. Second, there is little to no verification of the results. Beyond delivering misleading or outright wrong figures for customers, it does a disservice to honest retailers. Without verification and a much more representative sampling of retailers, it’s not clear how meaningful these declarations—whether or not they are on Google ads—can be.

Walgreens’ Searchable Database Of Employee Expertise Has Huge Potential

Evan Schuman — Thu, 26 Apr 2012 05:10:26 +0000

On Tuesday (April 24), Walgreens rolled out what it calls the “first online find your pharmacist” search tool. The idea is that different pharmacists have different backgrounds, different specialties, and this approach enables customers to connect with someone best suited for their medical issues. Whereas this specific app is narrowly focused on drug stores, could the concept work in other areas of retail?

What if chains asked all associates to pour into a database their specialties and backgrounds? What if a Best Buy site could steer you to a store and a specific associate who owns—and is, therefore, highly familiar with—your specific surround-sound system? What if you are a cross-country athlete and want to find a Sports Authority associate who is an expert in that specific sport? Perhaps the database might reveal a much more narrow area: A Macy’s associate who is familiar with Irish wedding gift traditions. A Home Depot employee with experience restoring Victorian mansions. The idea of creating an extensive, searchable database—Web-accessible, too—of all of your associates’ experience and expertise seems relatively low cost with two huge upsides. One: Possible new sales. Two: The very act of creating such a database sends out the message of credibility and a true desire to help the customer.

IKEA’s Clever Banner: Ugly, Difficult To Use And Utterly Perfect At Making Its Point

Evan Schuman — Thu, 26 Apr 2012 04:55:37 +0000

One of the problems with Web ads that try to be clever or funny is that they are rarely strategic. So they might be really funny—and get passed along to many prospects—but customers remember the situation and not the brand. Or they remember the brand, but not any positive attribute. IKEA, though, has crafted an almost unreadable Web ad that is positively brilliant at making its point.

The point of the campaign is that IKEA makes a wide range of furniture to fit in almost any space. So in what the chain is calling “the smallest IKEA store in the world,” it has made a 10.5×8.8 centimeter banner ad that literally lists some 2,800 products. It’s done by mousing over parts of the ad to reveal more and more products. In this rare situation, the Web ad is ugly, difficult to use and utterly perfect at making its point. IKEA discussed it in a one-minute video.

Best Buy Express Kiosk Acting Very Differently Than It Was Supposed To

Evan Schuman — Thu, 26 Apr 2012 04:37:43 +0000

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’ Move Into IT Services: A Baffling Step If You Think Of Sears As A Retailer

Evan Schuman — Thu, 26 Apr 2012 03:30:06 +0000

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’s Love-Hate Relationship With NFC

Evan Schuman — Thu, 26 Apr 2012 02:12:15 +0000

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.

eBay iPad App To Synch Auctions With TV Shows

Evan Schuman — Thu, 26 Apr 2012 01:43:17 +0000

When we talk about merged channel, we're generally talking about the interaction of mobile, E-Commerce and in-store, plus perhaps some call center activity. But eBay is now prepping an app that is trying to overlap mobile—in this case, an iPad tablet—with television.

eBay CEO John Donahoe said the upcoming app is designed to function with specific TV shows, where it markets items that relate to the show. "You enter whatever channel you're watching and the TV show that you're watching. eBay inventory associated with that TV show pops up, and it's a very compelling experience," he said. How far could this go?

E-Nightmare: Minors May Not Have To Pay For Downloads

Evan Schuman — Wed, 25 Apr 2012 23:47:10 +0000

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.

Angry Nerds: The iTunes Youth Legal Nightmare

Mark Rasch — Wed, 25 Apr 2012 23:40:39 +0000

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.

Turning Back Office Into A Game, IT Style

Todd L. Michaud — Wed, 25 Apr 2012 15:52:54 +0000

Why is it that the same people who will easily spend hours playing Angry Birds each week won't spend an extra hour improving their retail operations? Saving money just isn't sexy or fun. It's boring, and that's the biggest problem.

After many years in retail operations, Retail Columnist Todd Michaud is still surprised how little traction well-developed back-office applications receive. You would think that saving money on inventory, labor or marketing expenses would be all the motivation that a retail owner or general manager would need, but that rarely seems to be the case. That got Michaud thinking about some of the new social applications, like Foursquare, and what makes them successful: Gamification.

Home Depot’s SEO Furor

Evan Schuman — Thu, 19 Apr 2012 02:59:30 +0000

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.

Wal-Mart MoneyCard Break-In Offers Lessons For New Payment Tactics

Evan Schuman — Thu, 19 Apr 2012 01:14:34 +0000

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’s New Age-Verification Provides Proof For Police, But Is Far From Perfect

Evan Schuman — Wed, 18 Apr 2012 23:48:58 +0000

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.

With IBM’s POS Sale, History Really Does Make A Difference

Greg Buzek — Wed, 18 Apr 2012 22:43:18 +0000

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.