Top Stories



New Square CRM Features To Create Loyalty, But Mainly To Square

June 21st, 2012
When Square on Tuesday (June 19) added CRM features to its mobile payment system, it certainly provided a way to add more loyalty. But the system setup seems designed to guarantee the loyalty of retailers to Square just as much as it does the loyalty of retailers' customers to those retailers.

On the surface, the additions are innocuous, with new punch-card-like functionality integrated into the system. The effect of this, though, is for retailers to even more completely turn over crucial information to Square, which can use it for whatever purposes Square wants. If Square later wants to market to a retailer's customers directly—on behalf of itself or even possibly a rival—it theoretically can.Read more...


Smaller Is Faster? For E-Commerce, Don’t Count On It

June 21st, 2012
The simple rules for speeding up E-Commerce Web sites are toast. That's the clear conclusion to draw from a new Pingdom study, released on Tuesday (June 19), comparing performance of the top 100 E-Commerce sites—including dozens of big retail-chain sites. Some fat sites are fast anyway. Some lightweight sites are surprisingly slow. And what's really killing performance seems to be metrics.

The good news: Virtually all the large retailers got their response times down under the fabled three-second mark. The bad news: There's no longer a clear correlation between speed and site size and the number of files requested, the variables that Pingdom tracked in this study.Read more...


Apple’s Wallet-Without-Payments: If This Works, Maybe We’ll Try The Hard Part

June 14th, 2012
Apple's announcement on Monday (June 11) of Passbook, the iPhone's mobile wallet that does everything except traditional payments, is a classic unthinkable move: Apple did the easy part first. If customers like using Passbook for tickets, coupons and loyalty cards, then maybe Apple will tackle the hard part: mobile payments.

There are several ways Apple could do that. But one thing seems clear: After the fruitless straining of Google Wallet, ISIS and PayPal to get customers and retailers on board, Apple's design philosophy of "it just works" means the impact on retailers of iPhone mobile payments should be nearly invisible—except that customers may actually use it.Read more...


Burger King Trial: No PCI, No Hardware Changes, A Lot Of Cloud

June 14th, 2012
Burger King has been doing its own mobile payment trial at about 50 stores near Salt Lake City in Utah. But the fast-food chain isn't working with Google Wallet, ISIS, PayPal or any of the other major mobile players. Its approach is trying to avoid the political—and technological and security-related—friction associated with the more well-known strategies by using a Starbucks-style stored-value card, and then adding a heck of a lot of cloud.

Burger King's method can work on any iPhone or Android, completely denies any payment-card data to the retailer (keeping the whole trial out of PCI scope), requires no hardware changes and is all based on a cheap printed QR code stuck on the back of the POS or on a drive-through window.Read more...


Amazon’s Way Of Not Charging Until The Gift Is Fully Accepted

June 13th, 2012
Amazon was just issued a Patent for a way to let gift recipients decide if they want—and will redeem—their gift before charging the gift-giver. What Amazon describes in U.S. Patent 8,190,519 is solely intended to deal with digital gifts (music, films, E-books, games, ringtones, etc.), but there's no technological reason why this "no pay until the gift is accepted" approach needs to exclude physical products.

Although Amazon proposed this back on Sept. 30, 2008 (the patent was issued May 29, 2012), the problem it was trying to address still exists today. That would be giftcards that are never used, robbing the gifter of cash, the giftee of the gift and the retailer (depending on whether it was that retailer's giftcard) of the revenue and upsell potential.Read more...

Amazon’s Retail Influence Is Huge, And Rarely Understood

June 13th, 2012
Maybe retail chains have been worrying about Amazon for the wrong reasons. The usual E-tail advantages—no sales-floor replenishment problems, no sales tax, no slippage—combined with Amazon's huge size can make it seem like pure-play online retail is Amazon's secret sauce. But this story, published by Retail Week, StorefrontBacktalk's new U.K. content partner, suggests Amazon's real ace in the hole is CRM data—specifically how Amazon obsessively analyzes it to understand how, why and what customers buy.

The piece quotes former Amazon Principal Engineer Darren Vengroff saying, "mountains of data and hundreds or thousands of experiments" are behind every new Amazon play, no matter how small. Chains have much of the same data, but they leverage it to hand out coupons one customer at a time. Amazon does it wholesale, slicing and dicing to identify whole new lines of business to invade. Read more...

Eddie Bauer: With Mobile, Less Really Is More

June 7th, 2012
In recent months, the retail mobile mantra seems to have been that more is better. Whether that's small chains pushing functionality as far as they can or chains trying to get involved in as many trials as they can. Jamba Juice, for example, is citrusing it up with mobile efforts with PayPal, Google Wallet and ISIS.

But 337-store apparel chain Eddie Bauer is going against the trend, deliberately opting for a minimalistic approach. No Wi-Fi in its stores, no in-store product location, no geolocation to locate stores and no mobile app at all. With a primarily female demographic aged 35–55, Eddie Bauer Digital Marketing Director Michael Saracino talks up his chain's new mobile site and said he is focusing on what he calls mobile's "practical features."Read more...

Teen-Focused Apparel Chain Turning Web Outages Into Sales Promotions

June 6th, 2012
Delia's, a 113-store national apparel chain (stores in 33 states, almost all in malls), is trying to master finding the sales promotion silver lining inside various Web crash clouds.

On at least three occasions over the last several months, the chain's site suffered a non-trivial outage. It happens. But Delia's cleverly turned these outages into a marketing opportunity by sending an E-mail to all of its customers, where the chain apologized for the outage and offered to show its sincerity by offering free shipping on all products—but only for a couple of days, if that. It's almost as though this was a promotion that Delia's had always wanted to run and simply used the outages to make it seem more special.Read more...

The Next Batch Of Monthlies Barely A Week Away

June 5th, 2012

Just a reminder that StorefrontBacktalk now has five free monthly newsletters, each one focusing on a different key area for us: E-Commerce, Mobile, PCI/Security, In-Store and CRM. The Monthlies—see the descriptions here—are available to anyone via a quick E-mail sign up.

The Monthlies publish the first half of each month, and they are a great way to catch up on all of the news in a given area. So before you miss the June Monthlies, sign up for your free copy. …

PayPal: Chains Get PINs, Small Fry Get The Good Stuff

May 31st, 2012
PayPal's strategy for its retail mobile payments program is clearly a two-tier approach. For large chains—the existing Home Depot rollout plus imminent deployments from JCPenney, Abercrombie & Fitch, Toys"R"Us, Foot Locker and Barnes & Noble, in addition to 10 others—the mobile services will be barebones, identical to the phone-number-and-PIN system that Home Depot is using.

The more interesting PayPal mobile capabilities, such as displaying a headshot to confirm customer identity and alerting the store as soon as a registered customer walks in, are only being offered for much smaller retailers, typically one-location boutiques.Read more...

Budget Cutting Threatens Retail-Friendly Government Data

May 23rd, 2012
One of the most useful sources of customer and retail business information could become a casualty of the budget wars in Washington, D.C. On May 10, Republicans in the U.S. House of Representatives passed a budget package that eliminates funding for the Census Bureau's American Community Survey (ACS), which collects large amounts of data useful to retailers under the census's umbrella.

What's particularly alarming about this exercise in budget-cutting theater is that data from the ACS couldn't be accurately generated by private-sector surveys. At a time when retailers can finally sift through huge datasets cost-effectively, this one could disappear.Read more...

With Massachusetts’ Blessing, All States Prepare To End Item Price Labels. It Begs The Question: What Will Price Mean?

May 23rd, 2012
Legislatures first enacted requirements that grocery stores and other retailers individually price items because they simply didn't trust the barcode and other price-scanning technology. But now, argues Legal Columnist Mark Rasch, the government doesn't trust the retailers.

What is the "price" of an item? New technologies enable the prices charged, and the display of those prices, to change instantly. Ask anyone trying to purchase a plane ticket from New York to Detroit what the "price" of that ticket is. Read more...

The Delicate Legal, Ethical Dance Of Selling To Children

May 16th, 2012
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.Read more...

Will A Store-And-Forward In-Store Mobile Tactic Work?

May 16th, 2012
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.Read more...

Big Data Is Exactly What You Think It Isn’t

May 16th, 2012
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.Read more...

A Better Way To Search StorefrontBacktalk

May 16th, 2012

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.…

MasterCard Aims To Take Mobile Wallet Rivals Apart

May 9th, 2012
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.Read more...

Peapod’s QR Train Station Grocery Trial Shows Mobile Bias

May 9th, 2012
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.Read more...

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

May 9th, 2012

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.…

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

May 2nd, 2012
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?Read more...

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

May 2nd, 2012
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.Read more...

Walmart’s Online Cash Creates New Fraud Problem

May 2nd, 2012
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.Read more...

The Privacy Triple Play: Digital Giftcards Using Facebook Data And Geolocation

May 2nd, 2012
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.Read more...

A Real Sign Of Change At Wal-Mart: The Board Adding A Google VP

April 17th, 2012
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.Read more...

Sorting Makeup By Age, Hair Color And Ingredients. Sephora’s Customization Effort

April 11th, 2012

When Sephora, the global cosmetic chain, updated its Web site on Monday (April 9), it made some very impressive tagging decisions to enable personalization at the age and makeup ingredient level. Below the stats the 300-store chain released—such as that each product will now be tagged with 25 different characteristics and that this tagging took 50 people 5,000 hours to complete—is the obvious in hindsight observation that a 16-year-old girl is probably not interested in seeing the same cosmetics that would appeal to a 70-year-old woman.

The goals of hiding different things—say wrinkles versus pimples—would suggest different products, as would skin tone, hair color, eye color, lighting (office versus nightclub) and even clothing. Sephora will also enable searches by ingredients—for consumers who are allergic to specific chemicals—and fragrance. (It also enables search by price, but Sephora doesn’t get any brownie points for that.) And although it certainly helps the customers find the right product, it does even more for CRM files. Age, hair color, allergies and full cosmetics preferences? Welcome to CRM heaven, cosmetics-style.…


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