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IT Strategy / Industry

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

April 26th, 2012
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.Read more...


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

April 25th, 2012
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.Read more...


eBay’s Love-Hate Relationship With NFC

April 25th, 2012
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.Read more...


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

April 25th, 2012
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.Read more...


Angry Nerds: The iTunes Youth Legal Nightmare

April 25th, 2012
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.Read more...

Turning Back Office Into A Game, IT Style

April 25th, 2012
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.Read more...

Home Depot’s SEO Furor

April 18th, 2012
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.Read more...

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

April 18th, 2012
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.Read more...

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

April 18th, 2012
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.Read more...

Unhappy With Your POS System? Take A Peek At Your Last POS RFP. Don’t You Feel Bad Now?

April 18th, 2012
As retailers—over the years—have asked for POS improvements, vendors have responded by baking changes into the core products. The problem is that the results are now over-burdened with so many options they are a nightmare to use, tragically difficult to support and wallet-emptying to purchase.

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

The Sign Of POS Hardware End Times: IBM Sells All Of Its Point Of Sales To Toshiba

April 18th, 2012
When IBM on Tuesday (April 17) announced it was selling its entire POS business to Toshiba TEC for US$850 million, it was arguably the most explicit sign yet that the retail POS hardware business is on its last legs. Not IBM's POS business, but retail POS activity in general.

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

Appellate Court Limits Computer Fraud And Abuse Act

April 12th, 2012
In a major decision limiting corporate use of the federal Computer Fraud and Abuse Act (CFAA), the U.S. Court of Appeals for the Ninth Circuit on Tuesday (April 10) said the law is intended to address true cybertheft and other criminal hacking efforts and nothing else. At issue was whether companies could threaten employees with federal prosecution for violating company policies, such as playing games on a company computer.

Beyond the fact that retailers have to deal with many of these employee issues, the potentially bigger retail impact of this ruling is how it would strengthen prosecutions of actual cyberthieves, who tend to work where they shop.Read more...

New Jersey Giftcard Law Is Much More Complicated For Retailers Than Even Its Critics Believe

April 12th, 2012
The great New Jersey giftcard exodus continues. On April 5, Blackhawk Network and InComm announced they'll pull their giftcards from New Jersey retailers to avoid a new state law requiring them to collect and store the purchaser's ZIP code. (American Express giftcards are already gone from the state.) Their complaint: It's an IT project that's all cost and no business benefit. But in a merged-channel world, that's not the only problem with the new law.

In fact, what lawmakers probably thought was a simple idea runs into a buzzsaw of complexities—and the IT project is the easiest part of the problem.Read more...

Secret Service’s Home Depot Arrests Add To Self-Checkout Woes

April 12th, 2012
When the U.S. Secret Service arrested five men last week on charges that they stole hundreds of items from the self-checkout areas of 74 Home Depots in six states, it certainly didn't help the security reputation of self-checkout. This comes after Costco detailed its own self-checkout thefts and several chains abandoned self-checkout, citing theft as one key reason.

Some self-checkout advocates concede that these types of self-checkout thefts are very real, but that they are often the result of sloppy self-checkout deployments, with some stores not activating all security functions, using insufficient staff around self-checkout, not bothering with security cameras and ignoring other self-checkout best practices.Read more...

Best Buy’s Last Hope: A Radical Reversal On Customer Service And Credibility

April 11th, 2012
Whether Best Buy has a long-term future in retail is an open question, but it certainly won't get there with a price war against a well-resourced E-tail giant. Our unsolicited advice: Best Buy has one shot—an expensive, painful, highly disruptive shot—to truly turn itself around. It must embrace customer service in-store to an extent that would make Nordstrom blush. That means store associates who are true experts in the electronics they are selling.

In short, it means beating Amazon not with price cuts—which would only reinforce a cheap quality reputation while gutting already thin margins—but by delivering the type of buying advice and pleasant environment that Amazon can't touch.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.…

Best Buy Planned Outages Due To Its Move To The Cloud

April 11th, 2012
The abrupt departure of Best Buy CEO Brian Dunn on Tuesday (April 10), because of his "personal conduct," overshadowed something much more interesting that surfaced this week: the reason for Best Buy's recent series of planned outages—one on March 28, another on April 8—is that the now-CEO-less retailer is moving its E-Commerce operations to the cloud.

The cloud move, like last fall's quadrupling of the number of Best Buy IT project managers, is an effort to control IT costs without rolling back IT initiatives—absolutely critical in the face of Dunn's inability to stem the chain's loss of sales to Amazon. Amazon, ironically, is among those that Best Buy is writing checks to for its cloud efforts.Read more...

Apple, PayPal Enjoy Uncharted Mobile Payment Legal Issues

April 11th, 2012
As Apple tries to position itself as the ultimate payment processor, the competition is heating up for which entity, and which technology, will be responsible for ensuring that retailers get paid. Although these choices may ultimately prove useful for both consumers and retailers, they present new privacy challenges to all participants.

As a result, pens Legal Columnist Mark Rasch, Apple, PayPal and a host of other payment processors may find the need to hire new teams of lawyers to help them comply with the inevitable subpoenas and discovery requests that will befall them.Read more...

JCPenney Rolls HQ Heads In The Most Tortuous Way Possible

April 11th, 2012

Well, it sounded better back in January. On April 5, JCPenney said it has begun “reorganizing the workforce at its headquarters” to “realign its management structure,” and “transitioning from a culture of management to one of leadership” to “operate like a start-up.” Translation: Two months after the 110-year-old retailer announced an end to endless sales and an Apple-Store-like revamp of its 1,100 stores, the chain is chopping $200 million from its headquarters payroll. (CIO Ed Robben is already gone.)

Why now? The effects of that January 25 “Fair and Square” announcement have worn off. JCPenney’s stock price jumped by 20 percent when CEO Ron Johnson announced the new pricing approach, but the stock has lost all of that bump in the weeks since. That means it’s time for something else Wall Street will like. And why in such convoluted, buzz-ridden language? It’s hard enough to say you’re laying off $200 million worth of store managers and associates. Getting rid of those people right in headquarters? There are no words. Or maybe just too many words.…

ISIS Collides With Magstripe’s Dominance

April 11th, 2012
ISIS is scaling back expectations for how much its mobile payment system will be used, even before it launches. Last week, ISIS Chief Marketing Officer Ryan Hughes told GigaOM, "We're not trying to hit a home run, but get a bunt single." That's wise, given the very low levels of customer use for Google Wallet and PayPal's Home Depot trial. In fact, ISIS's expectations may still be too high, considering what happened to Chip-and-PIN, contactless in the U.S.

After all, even the hottest things in retail-chain POS today—iPads and iPods outfitted with sleds—still only handle one type of payment device: a magstriped card.Read more...

Visa to Global Payments: Strike One, You’re Out

April 4th, 2012
When Visa removed, at least temporarily, Global Payments from its list of PCI-compliant service providers, it reflected a subtly different position than any card brand has taken in the past. And the decision has implications for every merchant and service provider.

The PCI Council states that no breached merchant or processor has been found to be PCI compliant at the time of the breach. PCI Columnist Walter Conway has never liked that statement. It seems to be either tempting fate or challenging the bad guys. Although it stopped short of promising a safe harbor, at least the statement acknowledged the possibility of suffering a data breach while still being PCI compliant. Visa's suspension of Global Payments has swept aside that distinction.Read more...

Costco Self-Checkout Trial Setback After Store Losses

April 4th, 2012
A two-year-old experiment at Costco to try self-checkout in a handful of stores has not gone well, with at least one Costco in Idaho pulling the systems out after finding—and attributing entirely to self-checkout—a $60,000 inventory loss in six months, said a Costco management source.

One of the problems with the Costco system in various stores was either inadequate or non-existent notification to customers when a purchase was rejected. If an item's weight was different than expected, the system would void the purchase and not charge the customer. But many customers didn't notice the item was rejected, so they placed it in their cart, took their payment-card receipt and left the store.Read more...

Scanning Fruit At Checkout Looks Clever, But Will It Actually Save Anything?

April 4th, 2012
When Toshiba demonstrated its new grocery checkout scanner concept in early March at the RetailTech Japan tradeshow in Tokyo, the idea had a kind of geeky irresistibility: Instead of fumbling to find and type in product numbers for fruits and vegetables, checkers could simply hold each item up to an optical recognition system that would identify the item and ring up the correct price. Very clever—but not very practical for U.S. grocers.

Holding up each vegetable or piece of fruit in front of the scanner for one second? That's not a recipe for efficiency, even once the system actually works.Read more...

Oracle Attacks PCI Council, Calls Council’s Decision “Extraordinarily Bad, Short-Sighted”

April 2nd, 2012
Oracle took an unusual—and an unusually public—stance against the PCI Council this week, arguing that the Council is gathering too much information about data breaches. Oracle's concern? The more data that is gathered, the easier it will be to leak.

PCI's current rule "imposes new obligations on vendors that are extraordinary and extraordinarily bad, short-sighted and unworkable. Specifically, PCI requires vendors to disclose—dare we say 'tell all?'—to PCI any known security vulnerabilities and associated security breaches involving VPAs. PCI is asking a vendor to disclose specific details of security vulnerabilities, including exploit information or technical details of the vulnerability and whether or not there is any mitigation available, as in a patch."Read more...


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