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Congress Wants To Regulate Customized Pricing. Yeah, That Will Certainly Work As Intended

August 15th, 2013
If legislation pending before the House Energy and Commerce Committee is passed and signed into law, online merchants will be severely restricted in their ability to use "big data" and behavioral advertising to help set prices, discounts or coupons for customers. Fortunately or unfortunately (depending on your position on the legislation) this being the current Congress, it is unlikely that anything will actually happen. Nevertheless, this reflects the growing unease about the concept that you and I will be charged different amounts for the same product or service based upon the data collected about us, pens Legal Columnist Mark Rasch.

Recently, Rep. Susan Davis (D. Cal.) introduced H.R. 2487: the Ensuring Shoppers Honest Online Pricing Act of 2013." In the world of cutesy acronyms, this is the E-SHOP Act. The law would require the Federal Trade Commission to promulgate rules and regulations "requiring an Internet merchant [with a total annual gross revenue of more than $1,000,000 indexed for inflation] to disclose to each consumer, prior to the final purchase of any good or service, the use of personal information in establishing or changing a price." This would not include additional costs associated with taxes or shipping based on the consumers’ address.Read more...


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London’s Recycling Bins Don’t Do Mobile Tracking Anymore. (Until This Week, They Did.)

August 14th, 2013
At a time when many retail chains are trying to navigate the public-relations minefield of customer tracking, disclosure and data use, a story from London is a useful reminder that nobody is getting this right. On Monday (Aug. 12), the government told a startup called Renew to stop using its recycling bins in London's financial district to track passers-by by way of their phone signals.

Wait, recycling bins? Yes, 100 very high-class recycling bins outfitted with large, Internet-connected digital screens that show advertising (the financial district's government—yes, it has its own government—gets 5 percent of the airtime to display public announcements). But recently Renew added a new feature to a dozen of the bins: the ability to capture any passing smartphone's unique MAC address if it has Wi-Fi turned on. (Which, these being financial-district yuppies, is pretty much a given.) You can see the possibilities—but not necessarily all the possibilities that Renew sees.Read more...


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Can VeriFone Actually Outsource PCI Problems?

August 7th, 2013
In theory, you can't outsource PCI issues, but VeriFone wants to try. On Monday (Aug. 5), the POS maker announced VeriFone Point, a payments-as-a-service offering that basically takes everything in the store except the PINpad out of PCI scope—and, as far as we can tell, the PINpad doesn't belong to the retailer, so that's somebody else's problem too.

This should be a really good idea, and maybe even a good product for some chains if it's implemented right (we haven't seen details yet). But let's imagine it is: The PINpad belongs to the service provider. Card data is encrypted and transferred via the service provider's network, not the merchant's. A token is kicked back to the store POS with the card approval, so the merchant can track customers and meet branded-cart transaction detail requirements. No card data ever comes near the merchant's systems. What could possibly be wrong with this plan?Read more...


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When Replacing NFC, Tech Is Really Not The Issue

August 7th, 2013
Seems that the thing to say today, when discussing a retail mobile interaction method (be it for payment or loyalty or couponing)is to say it's an alternative to NFC (Near Field Communication). What a horrible thing to say about a technology (in the U.S., at least). But the characterization—or is it an insult?—misses the point about NFC.

More precisely, it misses why NFC has fared so extremely poorly in the U.S., especially for payment. The comparison of technologies—be it Light Field Communication (LFC) or using the touch-screen of a phone such as is being done by TouchBase—to NFC usually implies that if NFC phones were more plentiful or if the POS interface was simpler or if the phone connection was faster, then NFC would have flourished. The reality, though, is that while those tech issues are true and were obstacles, tech problems weren't anywhere close to NFC's biggest headache. It has always been the business issues—and none of today's much-touted approaches seem to have a solution for that.Read more...


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How To Deal With Merged Channel Inventory?

August 7th, 2013
As merged channels (also known as omnichannel) become the default for an increasing number of retailers, the challenge of efficiently handling the supply chain and managing inventory becomes exponentially more complex. The goal in a merged environment is channel agnosticism, in that the chain’s management shouldn’t care whether a customer starts a transaction in mobile and completes it in-store or starts it with the call center and tenders the transaction online or if the research, purchase, payment and pickup are each handled with a different channel.

Store management should care as much about whether a transaction started in mobile or in-store as for whether an in-store entered the store through the South entrance or the West entrance. True merged channel thinking would say, "What do I care how they came into my store as long as they came in?"Read more...


Walmart’s Scan & Go Change Reminds Us How To Make Mobile Work

August 5th, 2013
One of the many advantages of mobile payment is significantly expanding CRM reach, getting to know about a far greater percentage of all of a shopper's purchases. Nowhere is this more attractive than with Walmart, which has never had (and still doesn't) a traditional CRM. In the latest upgrade to the chain's Scan & Go mobile payment/self-checkout hybrid, Walmart takes this all-knowing tactic to the next level, giving shoppers a reason to scan physical receipts.

At its most simple level, the upgrade merely allows shoppers to scan physical receipts from Walmart (more precisely, to scan the QR codes printed on such receipts)to receive an electronic version. For the shopper, it's a nice way to reduce paper clutter and also organize purchases in one place. For Walmart, though, it's much more.Read more...


Self-Service Shifts Legal Risks, May Let Customers Off The Hook

August 1st, 2013
One of the great things about the Internet and computer technologies is that they can empower consumers and businesses to do things that ordinarily require a middleman. Consumers can purchase their own insurance, engage in banking transactions, deposit checks, make purchases, etc. They can do this both online and in the brick and mortar environment.

But this means that when the technology fails, it is the consumer who must suffer the consequences, writes Legal Columnist Mark Rasch—when ordinarily the risk of loss would have remained with the merchant. And he has more than a few day-to-day examples to make the point.Read more...


Sen. Chuck Schumer Wants The FTC To Start Doing What The FTC Is Already Doing On Mobile Tracking. Um, Right.

July 31st, 2013
U.S. Sen. Chuck Schumer has finally gotten around to asking the Federal Trade Commission (FTC) to crack down on in-store mobile tracking. At a press conference on Sunday (July 28) in front of a Manhattan store, Schumer decried the Big Brother-like surveillance that retailers engage in, demanded that retailers send shoppers a message letting them opt out before they begin tracking, and called on the FTC to investigate.

If that sounds a bit familiar, it may be because Schumer was saying back in November 2011 that he was going to call the FTC because two shopping malls were tracking customers by way of their phones. It only took him 20 months to get around to it. And in light of the fact that the FTC has been warning retailers for almost a year not to engage in surreptitious tracking—and is getting increasingly aggressive in its efforts—Schumer seems like he's a wee bit behind the curve. He also doesn't seem to have thought through his proposed send-an-opt-out-message solution. But we're sure he'll get around to explaining all that—in another 20 months or so.Read more...


SIMs Pwned With One Message! (Only About A Decade Too Late)

July 31st, 2013
We were going to do an in-depth teardown this week of one of the scariest-sounding cyberthreats we'd ever heard of: the ability to take control of a mobile phone just by sending it a carefully crafted malicious text message. The implications for mobile commerce, mobile payments and even in-store use of mobile phones sounded catastrophic for retailers. And based on early media descriptions of the work of Karsten Nohl, a security researcher at SR Labs in Berlin, it looked like a quarter of GSM phones might be at risk.

Then it was more like 10 percent of all phones. Now it turns out that, in the U.S. at least, SIMs that use 56-bit DES encryption—the security weakness that the attack depends on—haven't been sold for "at least seven years" by T-Mobile, "nearly a decade" by AT&T, and never by Verizon or Sprint. That means there's still a potential risk to any customer with a decade-old phone, but there's probably not enough of them to make them worthwhile targets for thieves. That makes Nohl's talk at Black Hat this week in Las Vegas interesting, but largely academic—which is exactly the way we prefer our cyberthreats.Read more...


Victoria’s Secret Mobile Site Chokes On Plus-Size Images

July 18th, 2013

First Victoria’s Secret’s (NYSE:LTD) mobile website choked during the last week of June, resulting in slow content delivery, failed connections and damaged or missing content. The next week it was fine, according to web monitor Keynote, with no clear explanation for the change. And the week after that, the site choked again—but this time Keynote has an explanation. It seems the lingerie retailer revamped its home page, and many of the new images were in PNG format instead of the JPEGs the site had been using. Result: The home page ballooned to almost five times its previous size.

Yes, those PNG images look great to site designers, and they should: They use lossless compression, so they can be repeatedly manipulated without losing image quality. JPEG, on the other hand, degrades if it’s resized too much. That doesn’t mean designers shouldn’t use PNG. It means IT should be converting those files to JPEGs as the very last step before a new page goes live. (IT should also have tested that page with actual phones to discover it took nearly 20 seconds to load and frequently timed out.) When it comes to images on a mobile website, less really is more. We’d have thought Victoria’s Secret, of all retailers, would have figured that out.…


QR Codes Are A Terrible Idea. Why Is Image Recognition Even Worse?

July 12th, 2013
QR codes are ugly. They're intrusive. Most designers hate them because there's no way to make them look any less like the brick-full-of-blocks they are, especially when they've been slapped next to a great-looking retail marketing image. That's why the idea of leaving out the QR code entirely and just getting a mobile phone to react to the image itself is so appealing. It looks so much better that it's easy to forget why it's a bad idea: That ugly, intrusive QR code screams "Point your camera at me!" An ordinary image doesn't.

As a result, if potential customers know what they're supposed to do with a QR code, they can easily do it. But how are they supposed to know that there's any special significance to the image in an ad or porter or brochure?Read more...


Apple Drops Amazon “App Store” Lawsuit, Now That Everyone Knows What The Real App Store Is

July 10th, 2013

Apple (NASDAQ:AAPL) has given up its fight with Amazon (NASDAQ:AMZN) over app stores—specifically, its trademark lawsuit over the name “App Store” for an online store where customers can buy apps. All Things D reported this week that on Tuesday (July 9), after months of settlement talks, Apple finally asked the judge in the case to dismiss the two-year-old lawsuit. There wasn’t much explanation—an Apple spokeswoman grandly pointed to 900,000 apps and 50 billion downloads, while Amazon just said it was relieved the legal ordeal was finally over.

But it’s not really such a mystery. In March 2011, when Apple filed its lawsuit, the iPad was less than a year old and the Kindle, introduced in November 2007, looked like a better-established competitive threat. (And it was, just not to the iPad.) Two years later, the iPad is a solid winner, the lawsuit is a waste of money, and the whole thing probably looks silly even to the Apple executives who helped gin it up. A name, however generic it sounds, can be a critical success factor for an unfamiliar element of E-Commerce—but once customers figure it out, they don’t need the name any more. Now will somebody please explain that to the

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Very Large Retailer (based in Bentonville) that owns the trademark Site to Store?…


Phone Makers Are Still Opening Security Holes By Spying On Phones

July 5th, 2013
A security researcher in Seattle has identified yet another program running in the background of some smartphones in the name of collecting quality of service information. This time the phone is Motorola's (NASDAQ:GOOG) Droid X2, and the program collects data that includes some user passwords—the researcher confirmed that his YouTube password was slurped up—which then are sent back to Motorola over an unencrypted connection.

Motorola doesn't have any real use for YouTube passwords, of course. But the fact that it's collecting them anyway suggests that whoever designed the software is really unclear on the security problems in slurping up data by default. Ironically, the one kind of data security that retailers are most concerned about, PCI, isn't strictly an issue if a customer uses a Droid X2 for mobile commerce, since the data leak is out of PCI scope—it's on the customer side. But a chain's employees might be sending their passwords to critical systems using a Motorola phone too, potentially exposing all the chain's systems to attack.Read more...


Square Mastering PayPal’s “Don’t Tell Store Associates And See What Happens” Strategy

July 2nd, 2013
When a Reuters story this week detailed that retail associates were oblivious about a Square service being offered in their stores, it had a frighteningly familiar ring to it. We have repeatedly run into chains that roll out brilliantly planned payment or mobile offerings, but somehow forgot to brief associates.

This is bad for an infinite number of reasons, but none more striking than the fact that associates are the primary interaction point with shoppers. When they see something new and unfamiliar, the associate is where they turn. When that inquiry is met with a baffled look and a pair of shrugged shoulders, that IT initiative is about to lose any shoppers—and IT may never know why. (They'd know if they asked associates, but if thought about asking associates, they would have had them briefed in the first place.)Read more...


CVS App Brings Home Hard-To-Get CRM Data

July 2nd, 2013
When CVS on Monday (July 1) launched a drug interaction feature on its mobile app, it was a classic example of a deep CRM gift that was positioned—correctly—as a truly useful shopper app. In short, it was one of those rare situations where the interests of the retailer and the shopper were perfectly aligned. The feature itself is straight-forward. A customer can download all of their CVS prescriptions and then type in any other prescriptions that are being taken plus—and this is critical—any over-the-counter (non-prescription) things they are taking, anything from aspirin or a hay fever pill to Vitamin C to 5-hour Energy.

CVS now gets three extremely valuable pieces of data: First, a list of prescription drugs presumably being filled by a rival pharmacy. What a clear chance to argue that those particular drugs should be brought over to CVS, an opportunity that doesn't exist without this information. Secondly, a list of various other things the customer is buying, many of which are likely sold by CVS. Another sales opportunity. Third, given that this is a mobile app, the data is already tied into a specific customer. This sharply enriches the CRM profile for CVS customers—and does it for very few dollars and in a way that seems to be altruistic.Read more...


Why Quarterly Vulnerability Scanning Is An Impressively Stupid Idea

July 2nd, 2013
The current PCI DSS quarterly vulnerability scanning requirement is nothing short of ridiculous, given the fact that most operating system vendors and some application software providers release patches at least monthly, pens GuestView PCI Columnist Jeff Hall. (OK, it isn’t so ridiculous if your goal is to guarantee a constant security hole for the convenience of cyberthieves. For those of you whose goals are other than that, though….) When Visa published their Customer Information Security Program (CISP) back in 2002, they set the bar of quarterly vulnerability scanning because it was believed to be the most efficient and cost effective approach for providing security. This practice has continued unaltered even when the CISP was converted to the PCI DSS in 2007.

Over the past decade, Council officials, retail IT people and QSAs have begun to question the quarterly requirement, but the fear was that retailers would simply not do it, as they could never cost-justify it, particularly for Level 4 retailers. The council has always had a strong pragmatic nature, weighing the effectiveness of guidelines against what they could realistically hope for retailers to do.Read more...


As Chain Trials Facial Recognition, Channel Assumptions Flip

July 1st, 2013
A major Russian convenience store chain, Ulybka Radugi, is now running a trial of facial recognition to choose digital in-store ads to be displayed and POS coupons to be offered. But as more chains start to seriously investigate the facial recognition potential, some of the fundamental CRM biometric assumptions are being challenged. Such activities need not end with the same channel where they began. Once a shopper is identified in-store and is matched with a CRM profile—or they are identified anonymously in-store and a purchase profile of this unknown-person-with-this-specific-face is slowly built—that information can theoretically be married to data from that person's desktop-shopping e-commerce efforts or their tablet/smartphone's m-commerce efforts.

The question, then, is whether it has to start in-store. What if this hypothetical chain pushes some attractive incentives to get lots of customers and prospects to download its free mobile app? And buried in the terms and conditions is the right for the app to monitor images? The next selfie or Snapchat that the shopper sends is captured and the facial data points are noted. Here's where it gets even freakier. Once the mobile app has identified the face of the shopper—and has linked it to whatever mobile shopper that customer has done—it can tell the in-store camera databases what to look for. When that shopper walks in, it can connect the mobile activity with any observed in-store activity.Read more...


Extremely Sad News

June 26th, 2013
It pains us greatly to have to report to you that our PCI Columnist, Walt Conway, passed away on Tuesday (June 26) after a battle with pancreatic cancer. Professionally, Walt had that rare ability to take complex compliance issues and make them approachable. He was a huge fan of the PCI process, which meant that he felt the obligation to point out its flaws or its inconsistencies.

Personally, I've never met someone who was as personable, intelligent and just plain nice as Walt. He will be missed far more than any words can convey.Read more...


Twitter Preparing Geofencing Retail Ads For The Holidays—And You’ll Be Giving A Lot More Than You’ll Receive

June 26th, 2013
Just in time for the holidays, Twitter will unveil a retail program where it will deliver geo-targeted messages to shoppers as they approach specific latitudes and longitudes, according to a report in Ad Age. Although the idea of letting Twitter blast anyone with 15 percent off coupons when they get within eyeshot of your store is pleasant enough, retailers might easily find themselves giving more than they receive—a lot more.

What is being given up is data, but this isn't referring to the limiters your team will give to Twitter ("we want 18-24 year old women who have Tweeted about clothing in the prior 96 hours and who are nearing our store between 9 AM and 10 PM"). The data at risk are the responses. Let's say you broadcast these discount messages to 4,000 proximity shoppers and 300 react, 250 download the coupon and 86 redeem the coupon. You won't be the only one saving those 86 names in the "nice" list, the one that you'll want to check a lot more than twice. So will Twitter.Read more...


When Testing The Largest Retailers Against Google’s M-Commerce Standard, Amazon Is The Rare Flunkee

June 26th, 2013
With a looming threat that Google will punish sites that do not strictly comply with its specific mobile guidelines, one SEO firm decided to pull out the Fortune 100 list and test everybody on it, using Google's benchmark. Only a half-dozen companies passed (I'd argue it was only five as one of the six was Google itself). No surprise: None of them were retailers. This we didn't see coming, though. One of the worst performers was Amazon (NASDAQ:AMZN).

Most of the retailers did OK, including Walmart, CVS, Costco, Home Depot, Target, Walgreen, Lowe's, Best Buy and Sears. The grocery chains (Kroger, Safeway and Supervalu) did poorly, but mobile commerce is generally a low grocery priority. Then we get back to Amazon, the retailer—let alone e-tailer—that has generally made all matters tech a huge priority. Amazon got beaten up on the ratings partially because the spreadsheet said it didn't have a true mobile site. But it seems to have a true mobile site—a very nice-looking one, too. They do, but it's apparently not done in the way that Google has in mind.Read more...


Where In The World Is ISIS Wallet?

June 24th, 2013
With all of the recent attention to Google Wallet, thought it might be interesting to do the same about some of the other digital wallets in the market – there are so many now! Since someone was asking me just the other day about ISIS, and its been a while since we’ve heard from them, I was inspired. So, just Where in the Wallet World is ISIS these days?, asks GuestView Columnist Karen Webster. Well, the short answer is: not in very many places.

It’s live in two cities, so they can officially use plural words when describing its deployment, but unless you live in Salt Lake City or Austin (and own particular handsets with NFC) you are SOL in being able to engage in the ISIS experience. According to Mike Abbott, ISIS CEO, at a presentation this past May, ISIS will expand past those cities when they are good and ready. And after all, what’s the rush, especially when you have Big Daddy Telebucks (AT&T, T-Mobile and Verizon) bankrolling you? Let’s take a trip down memory lane now and refresh our collective memories on the ISIS Wallet evolution.Read more...


Labs Strategy: Why Embracing “Failure” Is A Great Idea But A Horrible Word

June 20th, 2013
Oracle posted a very interesting short thought-piece Wednesday (June 19) about the different ways retail chains do—and should—handle lab strategy. Often labs are pure internal mechanisms, but they are more often the result of a tech acquisition. But the choice of strategies reveals an awful lot about attitudes of senior management. One key point is that management must be willing to accept—and learn from—failures. But if the CEO even thinks of the ultra-valuable data that comes from learning what shoppers will not accept as "a failure," the chain has even bigger problems than it thinks.

By looking at the different choices made by Walmart, Target, Home Depot, Nordstrom, Staples, Tesco, Wet Seal and Lowe's, Oracle categorizes three IT lab approaches. But how a lab is corporately structured will make little difference if senior management isn't willing to first learn (and to pay a lot for those lessons) and to be open to a future that they may not like. The job of a chain is to adapt to the reality in its market. The job of a dying chain is to cling to its current tactics if the future doesn't look like what it wants it to look like.Read more...


Swimwear Site Shifting Its Mobile Site Display Power From Browser To Server

June 19th, 2013
A swimwear and lingerie e-tailer called Bare Necessities is experimenting with a server-based (rather than browser-based) approach to re-sizing its site for various mobile devices. The benefit—if it works when fully deployed—will be faster initial page display and reduced overall load on the mobile browser. But the client-server rebalancing for mobile browsers is an interesting approach.

Jay Dunn, the site's chief marketing officer, told Internet Retailer that he thought the approach has strong potential, but he's skeptical until he sees how it does with the site's full launch later this summer. "I have not yet seen conventional responsive design handle a true retail site. I have 6,000 products and more than 24,000 product images, not counting color swatches, marketing, video and animation," Dunn said. "I haven’t yet seen the pure responsive design technology that handles that smoothly and efficiently across multiple devices." The historic problem with server-based approaches has been that it ultimately slows down the experience after the initial download, as the shopper needs to do a lot of back-and-forth interaction with the site.Read more...


Amazon’s Supply Chain Kicking The SKUs Out Of Walmart’s

June 19th, 2013
After some 19 years of struggling with E-Commerce, Walmart is once again learning that managing a merged channel retail strategy is almost never going to beat a well-run pure-play e-tailer like Amazon when it comes to online sales. Was reminded of this point courtesy of a wonderful stat in a Wall Street Journal story that ran Wednesday (June 19), which compared Amazon and Walmart's supply chain costs: "Wal-Mart's online shipping can cost $5 to $7 per parcel, while Amazon averages $3 to $4 per parcel, analysts say—a big difference considering some of Wal-Mart's popular purchases are low-cost items like $10 packs of underwear."

There are many factors behind those numbers, but it really comes down to the fact that Walmart's massive global supply chain needs to support more than 4,000 physical stores—a feat that Amazon need not worry about. Given that huge physical burden, Walmart's costs are quite impressive. But no one ever said that fighting against a pure play was particularly fair. Like all major chains, Walmart initially had two choices. Run the chain as one big happy merged channel family or separate and run online and offline as separate companies. Neither approach is perfect.Read more...


Still No Apple Mobile Wallet, But A Card-Number Keychain That May Be Just A Bit Too Clever

June 12th, 2013
Anyone who was expecting Apple (NASDAQ:AAPL) to jump into in-store mobile payments this week is probably feeling...well, comfortably disappointed. The big keynote speech at Apple's Worldwide Developers Conference on Monday (June 10) contained, as usual, no sign of the "iWallet" that some Apple fans insist will be coming any day now. But there was something just a little bit like a mobile wallet, and that's sure to keep the wishful thinking alive.

That something was the iCloud Keychain. Put simply, it's a cloud-based feature of both Apple's new iPhone operating system, iOS 7, that lets users store passwords, logins and payment-card numbers for use with mobile commerce sites. Yes, it does all the things password managers do these days, including automatically filling in the forms that make online retail so much more miserable for customers on a phone than on a PC. But it's adding card numbers that makes this interesting.Read more...


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