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Now For All StorefrontBacktalk Readers: Five Monthlies Covering E-Commerce, Mobile, Security, In-Store And CRM

September 14th, 2011
Starting today (Sept. 14), we are making our monthly topic-specific newsletters available for all of our readers, for free. These five newsletters—each one covering solely E-Commerce, Mobile, PCI/Security, In-Store or CRM issues—have until now only been available to Premium subscribers.

For readers focused on any of those areas, the Monthlies provide an easy way to keep up-to-date and to make sure you don't miss any story important to your operation. The Monthlies also have two other helpful features.Read more...


When Prices Can Be Changed On The Fly, What Price Do You Have To Honor?

September 14th, 2011
What does the "price" of an item mean? If you pick up a can of corn at the Piggly Wiggly and the electronic shelf label (ESL) says it is $1, but the price changes when you walk up to the register, what price is the merchant legally required to deliver? Although any reasonable merchants would likely honor the lower price, must they do so? What about an online store, where the price of an item might easily be changed between the time a customer puts it in his shopping cart and the time he checks out?

There are two different legal precedents for these situations, writes Legal Columnist Mark Rasch—and in fact, they go in exactly opposite directions. That creates an inherent problem, for both consumer relations and the law. Customers could feel cheated if price changes don't work the way the customer expects. And as ESLs make in-store pricing work more like online pricing, that could change the way courts see it.Read more...


Think Your CRM Files Are Invasive? You Ain’t Seen Nothing Yet—And Neither Has Your Lawyer

September 8th, 2011
Technology is now enabling retailers to capture data from their customers that those customers never envisioned sharingm—such as the sound of their voice or the shape of their face, or using their directory assistance inquiries to determine book pitches. From a legal perspective, these interesting efforts may be inviting lawsuits and other legal challenges. Consider a service that Google offered where you could call a toll-free number (GOOG 411) for directory assistance, writes Legal Columnist Mark Rasch.

Although you got a telephone number and directions, Google got information about not only what people in general were searching for (people in Piscataway picked pizza) but also what a specific person was looking for (John Smith—or John's telephone—searched for the number for an AIDS clinic, then a drug store, then life insurance). Again, because Google isn't a phone company or particularly regulated in any way, it could use or sell this information in any way consistent with whatever privacy policy it wrote. But Google got much more than that. Read more...


Global Recession? Somebody Didn’t Tell That To POS Makers

September 7th, 2011

In yet another example of mobile rewriting almost everything retail, the most recent quarterly POS terminal shipments spiked nearly twice as much as had been predicted, according to new figures from IHL. One of the key factors driving those shipments was retailers eager to upgrade their POS to be in a better position to accept mobile payments. “The biggest surprise was the resiliency of the POS market and the level of shipments, which was nearly double what we had predicted for the quarter,” said IHL CEO Greg Buzek. “In a global economy that slowed tremendously in the second quarter due to fuel prices, earthquakes, tsunamis and other factors, the retail POS market was particularly strong.”

IHL is now projecting a $7.3 billion worldwide POS spend for 2010—which includes hardware, software, and maintenance—and it expects 2011 to hit $7.78 billion. For the “pave the way for advancements” category, Buzek pointed to mobile as well as CRM, loyalty and merged-channel capabilities. On the more pragmatic side, many of these purchases are most likely equipping stores that were ordered long before the global recession peaked. “These were capital campaigns that were in the works before the economy soured, so it is 2010 results, creating budgets and new stores, and that creates a need for new POS,” Buzek said.…


Amazon Gets Tablet-Friendly, Finally Leaves 1995 Behind

September 7th, 2011
Amazon's redesign of its Web site is clearly intended to support its forthcoming color Kindle, but the changes mark a more significant shift in E-Commerce. They could mean the beginning of the end for the idea that E-tail sites should depend on PC standbys like keyboards and mice—as well as the notion that an E-tail site can afford to be a lot more cluttered than a brick-and-mortar store.

It's not just that the new homepage is cleaner and more open to make it easier to browse (and buy) from a tablet. The same changes—bigger buttons, less clutter and small print—will make the site much friendlier to other customers, too. That could force other E-tailers to throw out the rulebooks for their own aging Web site designs—most of which probably seemed like a good idea in 1995, but haven't been completely revamped since E-Commerce became serious business a decade ago.Read more...

Would Mobile Have Helped Retailers During Hurricane Irene’s Power Outages?

September 7th, 2011
As Hurricane/Tropical Storm Irene swept through the East Coast late last month, an interesting—albeit mundane—piece of technology proved to be an unintended retail differentiator: power generators. But the storm also raised questions about an unintended potential benefit of mobile payment and M-Commerce strategies, namely whether they could help retailers function—and function better than rivals—during power outages.

Although there are lots of factors at play here, the primary power benefit of mobile is its battery power supply and, to be quite cold about it, the fact that the customer's device is powered by the customer. The power benefit of M-Commerce is that its power supply is probably a long distance away, somewhere not impacted by whatever is causing a store's power outage.Read more...

Target’s New Site: Where’s The New?

August 24th, 2011
After two years of development featuring more than 20 vendors, rolled out its first independent Web site in 10 years, after its split from Amazon. Although trumpeting advances in customization, merged channel and improved checkout, the site itself—and Target officials—shows no evidence of any functionality that differs from what other retail sites have offered for years.

The dream—and nightmare—of every E-Commerce head is to start over from scratch, scrap all the legacy kludges that developers have been working around for years and build a Web site that does exactly what the chain wants. Most retailers will never be able to cost-justify that greenfield approach, of course. Target's site, however, had to be built from scratch because its decade-long deal with Amazon to operate its online business had expired.Read more...

Even When Retailers Die, They Have To Protect Privacy

August 24th, 2011
It's widely understood that when a retailer such as Borders goes bankrupt, customer data—including data protected by the retailer's privacy policy—is up for grabs. Forget about privacy; a bankruptcy court can auction off that personal information to the highest bidder, and there's nothing the retailer has to say about it, right? Not so fast. Federal bankruptcy law says a retailer's privacy policy can still protect that data, but only if the policy is in force at the time of the bankruptcy.

And failing to take customer privacy into account can have serious consequences, writes Legal Columnist Mark Rasch—the Federal Trade Commission has a decade-long history of going after retailers with unfair or deceptive trade enforcement actions—enforcing customer privacy even in some cases where a retailer has gone belly up.Read more...

Apple’s Multi-Multimedia Patent App Could Have A Huge In-Store Impact

August 17th, 2011
Apple has invented a way to let smartphones, tablets and computers share a single desktop by using projectors connected to each of the devices, according to a U.S. patent application that was made public on August 11. If that sounds like a cute conference-room gimmick—OK, it is. But it could also create an in-store opportunity to let customers use their phones for a lot more than scanning barcodes, receiving coupons or mimicking payment cards.

Suppose a customer's phone contains a shopping list of specific apparel items she wants to buy from another retailer—including images of those items or even links to them on the retailer's Web site. A shared screen could make it very easy for an associate to suggest alternatives or help the customer mix and match, whether the items are in the store or not.Read more...

FTC Gets Serious About Collecting CRM Data From Kids Using Mobile Apps

August 17th, 2011
When it comes to CRM data, what's perfectly OK for retailers to collect from adults using a mobile app just got a lot trickier when kids are involved. On August 15, an iPhone app developer was fined $50,000 by the Federal Trade Commission for collecting 30,000 E-mail addresses from users who might (or might not) be children—the first time the FTC has gotten involved in an app-related case.

The developer, Broken Thumbs Apps, isn't a retailer. But the case sets a standard for retailers whose apps may be used by children under 13: Offering underage customers kid-friendly activities puts you squarely in the FTC's sights unless you get parents' permission for every child's information—even if the information will only be used internally.Read more...

Charming Shoppes E-Commerce Chief Speaks Of Retailer Social Ignorance

August 17th, 2011
One of the brightest E-Commerce observers in the industry—Bill Bass—commented recently about the confusion between social media and brand awareness. Bass used to head E-Commerce at Lands' End and then Sears, and he now runs Fair Indigo and E-Commerce operations for the Charming Shoppes chain (1,989 stores in 48 states branded as Lane Bryant, Cacique, Fashion Bug, Catherines Plus Sizes and Figi's). But his point is that retailers need to better understand what social media can do and what it truly represents, rather than what they want it to represent.

"No one has cracked the code on how social media impacts retail. I recently had an agency pitch an app as a way to build brand awareness. I pointed out that for someone to go to the trouble of downloading an app, they already need to be aware of the brand. So at best you could argue that it would help brand engagement, but not brand awareness. Lots of money is being spent in this area. Suspect most of it is being poured down a rat hole." The rat hole is simply that retailers don't have the ability today to understand the social-media influence on retail, and that lack of understanding is almost certainly causing a lot of wasted effort and money.Read more...

When Choosing Customer VIPs, Is It Time To Ignore Purchase History And Focus On Social-Media Clout?

August 17th, 2011
It's a time-honored retail tradition to identify—and try and pamper—the group of best (most profitable) customers. But social media has provided a new way to define VIP shoppers, with "most influential" having the potential to trump "spends the most." Consider: Who do you want to take care of first and in the most boot-lick fashion? The person who personally spends $100 thousand a year with your store or someone whose friends and followers spend a total of $25 million? Is someone with a huge number of Twitter followers, Facebook friends or a popular shopping blog more worthy of the royal treatment than someone who personally spends a lot?

Granted, there are shopping carts full of complexities and nuances in analyzing such profiles—generating a meaningful influence rate, if you will—but that's where the fun comes in. Even worse, beyond those analytical complexities, there's the issue of how to get this data in front of the eyes of store associates and also how to do it in a timely matter. Of course, to start things off, there needs to be a reliable way to identify these influencers as they enter your store.Read more...

An IPv4 Windfall: Circuit City’s Addresses Now On The Block, Along With Borders

August 17th, 2011
Following last week's word that the Borders bankruptcy was unleashing tens of thousands of much-needed IPv4 addresses back into the retail online world comes word that fellow bankrupt retailer Circuit City is now selling its old IPv4 addresses—and Circuit City has twice as many as Borders. That will put almost 197,000 of the hard-to-get addresses out there for the highest bidder.

Let's take this slowly. Circuit City hasn't been an in-store national chain since 2009. But when it liquidated, no one apparently thought about the IP addresses, according to Gabe Fried, the founding principal of Stream Bank LLC, which handled Circuit City's liquidation and is now handling the one for Borders. "The people who knew that [Circuit City] had these assets left the company" rather abruptly when Circuit City didn't find a buyer for the chain and liquidation proceedings began, Fried said. "The problem involved management bandwidth and a lack of knowledge of [the IPv4 addresses'] existence."Read more...

Time To Encrypt (Again): Researcher Says Data Over Cell Networks Is Easy To Read

August 11th, 2011
Many mobile-commerce transactions running on GSM smartphones are easy to intercept and monitor, according to a presentation on Wednesday (August 10) at the Chaos Computer Camp hacking conference in Germany. Cryptographer Karsten Nohl of Security Research Labs was researching how well cell-phone data was secured when he discovered that most GSM cell operators (in the U.S. that's AT&T and T-Mobile) use either weak encryption or none at all on the GPRS networks that carry their phones' data. (Newer 3G networks use better encryption, but wherever there's not enough 3G, phones fall back to GPRS.)

Nohl told The New York Times that mobile operators turn off GPRS encryption "to be able to monitor traffic, to detect and suppress Skype, or to filter viruses, in a decentralized fashion." Unfortunately, that also means thieves with reprogrammed mobile phones can eavesdrop on many M-Commerce transactions using GSM smartphones. And even if payment-card information gets its own layer of encryption, there's still plenty of other personal data that customers would probably prefer not to fall into the hands of thieves.Read more...

CRM Isn’t Everything: Amidst An Outage, American Eagle Tries To Build Customer Trust

August 10th, 2011
American Eagle Outfitters suffered a Web site outage for more than 24 hours on Monday (Aug. 8), but the retailer came up with a clever way to keep customers from feeling completely in the dark. From about 6 a.m. Monday until 7 a.m. Tuesday, the site was unusable for E-Commerce and intermittently unavailable at all. But through most of the outage, customers saw a page headlined "Be Right Back!" that continued: "Leave your E-mail address and we'll give you a heads up when we're up and running. No worries, we won't add you to any lists or bother you in the future."

The retailer wouldn't say how many customers signed up for the notification or whether they received any special offers as an apology for the site being down. But the "leave your E-mail address" tactic is especially interesting because it specifically promised that the E-mail addresses would not be used for anything except notifying customers when the site was back up. That was probably a lost CRM opportunity, but it may have been much more valuable in rebuilding customer trust.Read more...

Borders Bankruptcy: Forget The Books. How Much Do You Want For Those IPv4 Addresses?

August 10th, 2011

As federal bankruptcy courts dismantle every last remaining piece of the once-mighty Borders book chain, including a CRM database of some 43 million loyalty-program customers, one asset caught the eye Wednesday (Aug. 10) of liquidators: IPv4 addresses.

In light of the severe global shortage of IPv4 addresses, this asset—far removed from the books and online files—may be the most valuable of all. “In addition to its trademarks and E-Commerce assets, Borders is the holder of a contiguous block of IPv4 addresses, which it seeks to transfer to a qualified buyer,” said Wednesday’s statement from Streambank, the company retained by the Bankruptcy Court for the Southern District of New York to market and sell the chain’s intellectual property assets. “Borders has established a worldwide reputation as a leading destination for buyers of physical and digital media including books, eBooks, eReaders and related accessories. Borders remains engaged with its customers through the E-Commerce site, which it expects to continue in business until transitioned to a new operator.” How sad is it that one of the nation’s largest bookstore chains is ripped apart and the most exciting asset is IP addresses? Talk about ego-deflation.…

Instant Face ID: CRM Will Never Be The Same

August 4th, 2011
In a development that will have a huge impact on retail CRM and IT security operations, a series of Carnegie-Mellon University experiments has established startling recent improvements in facial recognition. The biometric technology improvements would be meaningless, though, were it not for a social-media-fueled avalanche of tagged images and personal information.

The combination makes absolutely practical a science-fiction-like scenario of customers being identified as they walk into a store by virtue of their face alone. Cameras at POS could match faces with names from a payment card, thereby enabling the customer to be subsequently identified and tracked without a loyalty card. The CMU experiments suggest an even more powerful privacy-smashing scenario, with consumers walking into a store identified by any site that has ever posted their pictures. Imagine a loyalty program with 90 percent participation, requiring no effort—nor, for that matter, intent or consent—from any customers. An absence of laws will make the ethics of retail senior executives the only boundary. (Uh-oh.)Read more...

California Book Legislation Doesn’t Understand How Retailers Work

July 27th, 2011
If you're selling books in California, you may soon have to handle all customer data very differently. If a piece of legislation now winding its way through the California legislature becomes a law, new restrictions on your record-keeping and file maintenance will extend far beyond the sales of actual books.

The legislation, which has more holes than a chuck of Swiss cheese, would place these burdens on retailers while ignoring a lengthy list of other people in the retail environment who have access to the identical data. The key problem, pens Legal Columnist Mark Rasch: The writers of the legislation didn't think much about how retailers do their magic.Read more...

California Law Will Mean More Privacy For Book Buyers—And Much More Paperwork For Booksellers

July 21st, 2011
California is about to ban booksellers from sharing information about what their customers buy. The Reader Privacy Act, which has already passed the state Senate and is well on its way to becoming law, would prohibit bookstores—including almost any retailer that sells books—from disclosing what a customer reads unless the customer agrees or a judge orders it.

The legislation reaches well beyond bookstores and physical books, covering audio books and E-readers as well as almost any retail chain that includes a books section. (Barnes & Noble? Definitely. Wal-Mart? Certainly. Safeway? Maybe.) The bad news: Retailers covered by the law will be required to create a detailed, publicly available annual report covering how much customer information was disclosed the previous year—whether it was disclosed with customer approval or not.Read more...

Borders CRM Data Still In Play

July 21st, 2011
With all the attention on the closing of almost 400 remaining Borders stores, the chain's IT jewel—purchase history and other CRM data on tens of millions of its customers—is still to be sold to the highest bidder. When that happens, any privacy promises Borders made to loyalty-program customers are out the window. But if the CRM data is misused by the buyer, that could still spark a legal crackdown on what retailers can do with the information customers give them.

Unfortunately, bankruptcy courts really don't care what promises were made to collect CRM data—it's an asset, so it's for sale. Unless retailers can find a way to enforce customer privacy even after the retailer has gone belly-up (something no retailer wants to think about in creating a loyalty program), there's a very real risk of losing customer trust—and gaining the unwanted attention of politicians who have discovered that privacy is now a popular buzzword.Read more...

Taco Bell’s Mobile In-Store Program Good, But It Could Be Far Better

July 7th, 2011
Offering free Wi-Fi in-store is hardly a new technique, when its goal is to simply make your store a more inviting place to hang out. Taco Bell is using Wi-Fi chainwide as a very specific tactic—one designed to move customers from the drive-thru to the store, where ticket sizes tend to be larger.

But the chain's mobile move is missing most of the value of mobile, and this is especially disappointing given that the free Wi-Fi is part of a major in-store television rollout. The chain's 5,600 locations will have video throughout the store that will "feature engaging content such as music, lifestyle, entertainment and sports, and also free Wi-Fi to keep our consumers connected with their friends." That sounds fine, although it's supremely vague, even for a news release. ("Hmmmm. What type of engaging content will you offer?" "Entertainment." "You sold me.") But here's where it starts to get sad. Is that informational—as in "alert me if severe weather is suddenly predicted for the area I am in" or "message me if there's news on any of the following keywords"—or is it merely ads?Read more...

Senate Tackles Mobile Location Restrictions—And Does So Very Poorly

July 6th, 2011
Two U.S. Senators have introduced a pair of competing bills intended to make it more difficult to track consumer locations on mobile devices, which is a very rich area for retailers. But the bills suffer the same critical flaws that have inflicted earlier Senate technology efforts—such as one dealing with data-breach disclosures and another trying to limit E-Commerce tracking attempts—namely that they are sufficiently vague to completely undermine the intended restriction.

The first bill, introduced by Senator Al Franken (D-Minn.), is called The Location Privacy Protection Act of 2011. It is trying to force telcos and retailers to get the consumer's "express consent before collecting his or her location data and to get that customer's express consent before sharing his or her location with third parties." The second bill, introduced by Senator Ron Wyden (D-Ore.), is called The Geolocational Privacy and Surveillance (GPS) Act. It is designed to restrict how government investigators can access mobile-location data. The key problem is that these bills are focused on location-based mobile services, and they tend to forget that the most common location-based mobile service is getting the phone to ring when receiving a call.Read more...

Groupon Exposes 300,000 In India

June 30th, 2011

Groupon’s subsidiary in India, Sosasta, has exposed the E-mail addresses and unencrypted passwords of all 300,000 of its users. The Sosasta user database was found on the Internet by Australian security consultant Daniel Grzelak, who was using ordinary Google searches to hunt for exposed databases. Grzelak notified Groupon last Thursday (June 23), and the company said it immediately locked down the database and began notifying subscribers.

Groupon, which acquired Sosasta in January, said in a statement: “Sosasta runs on its own platform and servers, and is not connected to Groupon sites in other countries. This issue does not affect data from any other country or region.” In light of recent E-mail spills from Epsilon and Sony, maybe it’s a good thing that Groupon hasn’t had time to properly integrate a new acquisition. And with the new data-privacy rules that India has enacted since Groupon bought Sosasta, at least now Groupon knows it has a problem.…

New Digital-Receipt Standard Envisions Cross-Channel and Even Cross-Chain Uses

June 30th, 2011
A new digital-receipt standard released this week was designed to address retail complaints about an earlier version, with the new standard offering a single unified XML interface so that all data would be accessible and not have to be repeated. Version 2 comes from the National Retail Federation's Association for Retail Technology Standards (ARTS) Council.

"Consideration was given to the possibility of providing separate XML interfaces. However, it was decided to provide a common XML interface embracing the requirements of all of the applications, because this was consistent with the historically common practice of integrating applications through POS transaction log files," the new standard said. "It is noted that audit, security, labor productivity and activity analysis applications are very demanding of detail content, [with] all driving the need for an all-encompassing XML schema."Read more...

One Cynical Retailer’s Definition Of An Internal IT Client

June 30th, 2011

One retail IT line that is too cynical to not share: In an unrelated interview, a senior IT manager discussed working with certain internal clients—business unit heads who had, until recently, been just colleagues.

What’s the difference, he was asked, between a colleague and an internal client? “Simple,” he said. “An internal client is a colleague who’s had his reasonability removed.”…


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