Top Stories


Mobile / Wireless / Contact

Papa John’s Texting Lawsuit Raises Troubling Mobile Marketing Issues For All Retail

November 14th, 2012
When a federal judge certified class-action status against Papa John's on November 9, the pizza chain became the poster child for mobile text-messaging abuse. But this case raises some key questions retailers need to wrestle with—and which the court will decide—including the use of POS data for non-payment functions, the chain's reasonable responsibilities for the decisions of very independent franchisee owners and what constitutes a business relationship sufficient to establish marketing permission (and in any definition, does buying one slice of pizza reasonably trigger it?).

The specifics of this Papa John's case involve a vendor that never worked for Papa John's but was retained by quite a few franchisees. That vendor, OnTime4U, sent a huge number of texts to customers of Papa John's franchisees and never received explicit permission from any of those customers. If this had been a case of whether OnTime4U had violated the Telephone Consumer Protection Act (TCPA), it would be a very easy case. But because the case is focused on the retailer that never retained the vendor, things get much trickier.Read more...


Macy’s Hiding Black Friday In-Store GPS Test In Plain Sight

November 14th, 2012
When word broke on November 8 that Macy's is testing in-store navigation technology in its Herald Square flagship store, the chain was surprisingly silent. A week later, Macy's is still saying nothing about the "indoor GPS" system, even though it has been in the chain's iPhone app since late October. Meanwhile, Macy's is promoting a Black Friday product-finding system the chain is doing with eBay.

Part of the reason for Macy's silence on in-store navigation could be that it's only in the flagship store. A more likely reason: There's only one safe way to roll out untried technology on Black Friday, and that's very, very quietly.Read more...


JCPenney CEO: “We Can Have Loyalty Programs For Kids.” Doing It Is Smart. Saying It Isn’t

November 14th, 2012
In the middle of an analyst briefing on November 9, where he was detailing a painful 27 percent drop in quarterly revenue, JCPenney CEO Ron Johnson made a bizarre comment that "we can have loyalty programs for kids." Such utterances have been heresy in retail circles, where it sets off every creepy warning alarm that parents have. But Johnson's point, which JCPenney tried its best to walk back, may have a lot of legitimacy behind it.

Johnson's comment points to a hole in the legal minefield of marketing to children. Federal law strictly restricts and all but prohibits online marketing and tracking of children younger than 13 (once they become teenagers, the government—and parents around the world—have pretty much agreed that it's time to surrender). But there are no such restrictions in-store. Ironically, the reasons Congress agreed to restrict online activity are, today, probably more relevant to in-store, thanks to mobile.Read more...


Google Wallet Goes Plastic. What Now For Mobile Payments?

November 8th, 2012

In another blow to mobile wallets’ credibility, word leaked out last Thursday (Nov. 1) that Google will soon copy PayPal by introducing a plastic Google Wallet Card—complete with the magstripe that Google Wallet’s NFC hasn’t been able to displace. (This may be what Google was planning to announce last month but didn’t.) Google will be pitching the plastic for times “when you can’t tap and pay,” and any coupons or loyalty cards in a user’s Google Wallet will be automatically applied.

But we have to ask—why? Sure, we understand that Google seriously misunderstood either how hard mobile payments would be, how much its competitors hate it or how unwilling consumers are to use anything but plastic. If this is really Google throwing in the towel on NFC-based mobile payments, we have to wonder what else Google isn’t going to follow through on for Google Wallet retailers. After all, Google will still be tapping the transaction stream for CRM data, even at places that haven’t signed on. Is the search giant going to act like a partner after all this? This move may be just what Google Wallet needs. But chains? Not so much.…


Target’s Giftcard Digital Strategy Works Well, Unless You Want To Actually Use The Card

November 8th, 2012
Part of the purpose of giftcards is to get new customers into a store. Another part is making them happy with how easily they can spend money with the giftcard-issuing chain. Although the new giftcard options Target announced last Friday (Nov. 2) make it easier for customers to buy giftcards, they actually make it hard for card recipients to use them.

The problem: Target's giftcards don't move easily between the chain's in-store, E-Commerce and mobile systems, each of which is in its own silo. Putting QR codes in-store to let people buy electronic giftcards is a fine, no-fuss step—but then making it particularly tedious to move those cards to the recipient's preferred channel is not the way to make those new customers happy with Target.Read more...

Retail IT Lessons In The Path Of Sandy

November 8th, 2012
As Superstorm Sandy blew its devastating winds through much of the Eastern U.S. starting on Halloween, retailers had to deal with it just like everyone else. But few seemed to have anticipated the more than eight days of outages—some outages continue, pushing past 10 days—along with the gas shortages, closed roads, lack of food and water, plus the dead phone lines, lack of Internet broadband access and dead cell towers.

Stores in this area of New Jersey—StorefrontBacktalk's main office is in the heart of Sandy's path—are used to outages of a few hours and maybe, during severe situations, maybe one day. The bad news: With global weirding (the term for the many strange weather patterns caused by global warming), there's a fine chance these week-plus outages may be something that has to be planned for. With that in mind, let's look at what some of the chains—including Best Buy, Target and Starbucks—discovered when they could only exist via emergency generator. It meant POS without network (no debit, no gift cards, no returns, no lookups) and few ways to tell customers what they couldn't do.Read more...

PayPal’s Price-Match Program Is Fishing For Your Shoppers In Your Stores

November 8th, 2012
Price-match programs have, for decades, been a standard tool for retaining existing customers and potentially attracting tire-kickers by giving them a reason to not fear your pricing. But PayPal is creatively using the program to acquire new customers, and it is using its retail partners' ludicrous price-match restrictions as the path to do it.

At a glance, retailers might be inclined to dismiss this price match as something akin to what Visa, MasterCard, American Express or Diner's Club might offer and not at all related to what a retail chain might do. Although PayPal is indeed a payment device, its in-store retail efforts—where PayPal offers to handle POS purchases at Home Depot, JCPenney, Abercrombie & Fitch, Toys"R"Us, Foot Locker and Barnes & Noble, among others—make it something that can't be so easily dismissed. For the doubters out there, note that the program stresses it covers both in-store and online purchases.Read more...

Toys”R”Us Payments About As Far From Seamless As Possible

November 8th, 2012
Toys"R"Us is now following Walmart's lead and offering an online cash program, where shoppers can purchase something online and offer to pay for it with cash in a local store. The shopper then has 48 hours to get to that store and cough up the moolah. But these programs are taking an interesting twist. They have little to do with the unbanked, nor are they offering a more comfortable way for consumers who are still nervous about typing in their payment-card data—although both are factors.

No, this program has everything to do with getting E-tail shoppers into the stores. And, along the way, it has become the exact opposite of the original idea of merged-channel programs, where shoppers were encouraged to shop in whatever way was easiest and most efficient for their situation and the purchase's particulars.Read more...

Will MasterCard’s New NFC Trial Give M-Commerce Transactions Chip-And-PIN Rates?

November 7th, 2012

If paying with a mobile phone isn’t any easier than just using a card in-store, maybe it can at least improve the mobile-commerce buying process. That seems to be the idea behind a trial MasterCard announced on Wednesday (Nov. 7). In the Netherlands-based test (which actually began in mid-October and runs through March 2013), an NFC-equipped phone can be used to make M-Commerce purchases, with the phone sending an EMV-compliant cryptogram to complete the transaction after the customer selects a payment card and keys in a PIN. In effect, it’s Chip-and-PIN over the phone.

That’s slightly easier for customers than having to key in the whole card number and slightly safer than the merchant storing the number. But the real value to retailers will show up if MasterCard declares that its own EMV solution qualifies M-Commerce transactions for card-present interchange rates (or at least for the EMV-based liability shift). In that case, online merchants may suddenly be very interested in offering customers that option. If not—well, there’s always room for yet another NFC payments approach that retailers have no reason to adopt, right?…

Study: 29 Percent Of Online SKUs Accidentally Leave Off Manufacturer Name

November 7th, 2012

In an October sampling of some 7,000 products shown on the 10 largest E-Commerce sites in North America and the U.K., 29 percent of the SKUs did not include the manufacturer’s name and some 8 percent offered up details that were simply wrong, according to a report released Wednesday (Nov. 7) at a Paris tradeshow. The fact that SKU GS1 data is imperfect is hardly a stunner, but the large number of defects was interesting. That missing manufacturer data, for example, could exclude products from a Kraft-specific search result. For the chain itself, it could interfere with analytics of which supplier’s products are moving well.

The study, performed by vendor Clavis Technology and GS1, looked at 500 brands and 7,000 packaged food/beverage products across 23,000 Web pages. One of the biggest numbers the report stressed was that 67 percent of products examined were missing information. But that could go either way. Were products dinged for not including marketing copy or other non-sales-essential datapoints? Another good figure: 14 percent did not include any ingredients. That could be a costly omission, if a product containing an allergen—a nut product would be the most obvious issue—was purchased and eaten after the shopper did a search excluding anything that had peanut in its ingredient list.…

Google Joins The Same-Day Delivery Crowd, But It’s Still Not Fast Enough

October 31st, 2012
Now Google is testing same-day delivery, too. That isn't likely to have Amazon, ebay, Walmart or any other quick-delivery wannabes quaking in their boots, because Google's trial looks pretty much like all the rest. But there's a question overshadowing all these efforts: How quickly do either E-tailers or brick-and-mortar chains have to do those deliveries?

For those few critical days before Christmas, any same-day delivery for last-minute orders could be a high-margin bonanza for retailers. But for the rest of the year, the customers already know what they expect when they order something for quick delivery. And the benchmark to beat isn't Amazon. It's Domino's.Read more...

Are Risky Transactions Masquerading As Card-Present?

October 31st, 2012
At a panel last week, a Best Buy finance exec questioned whether card-not-present rules make sense—and she's hardly the first. It's not just NFC, which may or may not end up having a major impact on mobile payments, at issue. Rather, it's various other mobile payment methods, including stored-and-accessed card data systems such as iTunes and PayPal.

The original idea of card-not-present was simply a way to justify a higher interchange rate for less-secure transactions. The premise was that fraud is less likely when a magstripe card is swiped and potentially examined by an associate than it is when a shopper types numbers into a browser or tells them to a call center rep on the phone. But what happens when the card data is authenticated and used repeatedly—a la iTunes, PayPal and many mobile apps? What if the card is physically swiped and that data is then stored on the phone? Card-not-present is only meaningful today in one respect: In a few years, mobile payments will indeed likely make almost all cards not present.Read more...

Getting Consumers To Add CRM Data To Mobile Wallets Is Really Hard, Until You Think Like A Shopper

October 31st, 2012
The idea that mobile wallets should also house loyalty cards is all but mandatory at this point, and the rationale appears to be the classic, "why not?" But shoppers have been decidedly apathetic, responding with their own, "Why should I?" It's a replay of the mobile and contactless payment problem, where a digital system is trying to displace a manual system (magstripe swipes, in the case of payment) that works perfectly well and that customers are used to it.

What makes this disconnect worse is the real reason mobile wallets need CRM/loyalty functionality: Shoppers have no problem with existing loyalty cards, because they just don't use them that often. The retailer benefit in mobile loyalty cards is clear: much greater use of CRM. But the benefit for shoppers? That's much more amorphous.Read more...

Is Starbucks’ Mobile Charging Effort Going To Hinder M-Commerce?

October 31st, 2012
Starbucks on Monday (Oct. 29) threw its support behind a group pushing a wireless power standard. Such a wireless approach would have power-charging pads re-energizing shoppers' mobile devices while they sit in a Starbucks. And the standardization part simply means Starbucks wouldn't need to support a half-dozen different devices, in theory. But will this option have any meaningful impact on M-Commerce, which seems to be Starbucks' bread-and-butter (excuse me, coffee-and-cream) tech issue these days?

The M-Commerce implication is one of those good news/bad news/good news situations. Good for M-Commerce: One of the more daunting obstacles for M-Commerce is infuriatingly short battery lives—and the Wi-Fi offerings of places like Starbucks only shortens those lives further. So from the perspective of "this is a good place to literally recharge my batteries," it could help M-Commerce. On the Bad for M-Commerce side: Unlike plugging a smartphone or tablet into a laptop's USB connection to charge, the wireless charging pad approach pretty much prevents the user from actually using the mobile device while it's being recharged. Read more...

Monthlies And A Shout-Out To Kindle Users

October 29th, 2012

A little late October housecleaning here at StorefrontBacktalk. First, a quick reminder: StorefrontBacktalk now has five free Monthly newsletters, each one focusing on a different key area for you: 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 and the November monthlies will publish next week.

The Monthlies are a great way to catch up on all the news in a given area. So before you miss the November Monthlies, sign up for your free copy—and remember, you can sign up for multiple topics. Finally, a quick thought for Kindle users. For those of you who have not yet subscribed to our Kindle feed, it’s not bad for convenience while traveling. You’ll get the latest on retail tech, E-Commerce, mobile and security beamed into your Kindle when you’re not looking. …

How Much Does Amazon Still Own What It Sells?

October 29th, 2012
A grocery chain was not happy with the profitability of products purchased by certain customers, so it had someone slip into their homes overnight and steal their refrigerators with all of the low-profit food. Three houses away, a national sports chain suspected one of its high-school athlete customers of buying some items from a direct rival, so it activated heater-equipped active RFID tags that melted or set on fire all of the disloyal customer's athletic gear. Sound absurd? Well, it's apparently not, if you work for Amazon. That is, in essence, what the world’s largest e-tailer has done with one European customer.

In this age of digital content, Amazon is acting as though it has the right to deal with one dispute on one piece of content as license to steal back all of that customer's paid-for content. With the newness of digital rights issues, it's frighteningly possible that Amazon may be right—for now, pens Legal Columnist Mark Rasch.Read more...

Can Aéropostale’s iPad Pied Piper Turn Teen Browsers Into Buyers?

October 24th, 2012
Aéropostale, the 1,108-store teen apparel chain with stores in all 50 U.S. states, is trying a creative iPad jukebox flytrap experiment to precisely track clothing, teen and music interactions. By giving teens control of the songs, they will gleefully wait 30 minutes to hear their tunes throughout the store—time spent browsing and likely buying.

The potential here isn't just to track generic music influences. The stores can already play different songs in different areas of the store and specific dressing rooms, with the sound bleeding out of the store and into the mall. What if specific songs influence—or attract—shoppers focused on specific types of clothing? Which tunes pull in tire-kickers and which are good buyer lures? Critically, though, this is all based on the psychology of how teens interact with apparel. It has very little to do with actual tailoring.Read more...

Isis Wants Users In The Worst Way Possible, And That’s How It’s Going After Them

October 24th, 2012
Isis has finally launched its mobile payments trials in Salt Lake City and Austin—and done it in a way that guarantees the fewest possible customers will use the new service. On Monday (Oct. 22), the mobile operators' consortium announced that all customers need to do is go to their Verizon, AT&T or T-Mobile store, where their phone will be opened up, the SIM replaced and the operating system upgraded (hope you don't lose any data that was on there). What could possibly discourage customers more?

How about the fact that those mobile stores will also be pushing customers to buy a new phone as long as they're already in the store? And yes, we're sure that will make retail chains feel warm and fuzzy about Isis, too.Read more...

Major French Chains Testing Biometrics On Top Of A Contactless Smartcard, All Riding On EMV

October 24th, 2012
American retailers have never been able to make biometric payment authentication work, but it has been years since anyone has attempted it. Is the time now ripe? Was the efficiency and speed of biometrics the right idea at the wrong time? Two major French chains—Leroy Merlin, with more than 300 home improvement stores in 13 countries, and the Auchan Group, with 639 hypermarkets and 2,412 supermarkets—are betting that shoppers are now ready.

But the six-month French trial that has just started is taking the efficiency goal one step further, by marrying a contactless smartcard—which holds the biometric data—with the POS-affixed biometric scanner. The retailers estimate that the contactless card's transmission will be intercepted by the POS authentication element from two meters away, which is about 79 inches or about 6.6 feet.Read more...

Target Posts Its Holiday Price-Match Details But Forgets To Link To The Page

October 24th, 2012
When Target announced its holiday season plans to match some online pricing last week (Oct. 17), it promised shoppers it would publish all of the details—its terms and conditions—on October 22. Technically, it did publish those conditions on Monday. Target simply forgot to link to the page.

Shoppers who tried finding the details on were locked into an endless loop. Clicking on the link provided on the chain's news page took shoppers (and us) to a "More reasons to love Target" page, which had a link taking us to an "Our low price promise" page, which looped back to the "More reasons" page. As of Wednesday (Oct. 24), Target had finally inserted an updated price-match page, complete with details, into that loop. The details, though, paint a very different picture than Target's announcement did. For example, the program has a "limit quantity of 1 online price match, per identical item, per guest." So if a shopper has two children and wants to get them the identical toy, and if that toy is being offered at Amazon for less, Target will only grant the lower price on one of them? Read more...

Merged Channel Is A Wonderful Thing, If The Transition Doesn’t Destroy Your Chain

October 24th, 2012

As more chains struggle with fully embracing merged-channel operations, we have a delicious contradiction. The benefits of such a merged-channel approach are definite and intense. However, the risk of damage being inflicted by a less than precise execution is equally certain. Hence, it’s a path that needs to be traveled—but oh so carefully.

StorefrontBacktalk and ChainLink Research have collaborated on a report that looks at some of the less-covered pitfalls and opportunities of this approach. Take a peek.…

Retailers To Find Tough Sledding With New iPads

October 24th, 2012
Apple's highly unsurprising iPad Mini announcement on Tuesday (Oct. 23) came with a side order of something retailers actually will care about: a full-size iPad that replaces the model introduced just six months ago. The differences: It's faster and has the new (and incompatible) "Lightning" power/data connector. The problem: That's the port most payment-card sleds attach to.

Yes, Apple sells a $30 adapter for plugging old-style peripherals into the Lightning port. But such adapters won't work well with card sleds, so stores could end up needing two types of iPads and two types of sleds. And that's the type of thing that drives central IT support crazy, because the sled that just broke is always the one you're out of.Read more...

Walmart’s E-Grocer Plans Half-Mile-Long Virtual Stores

October 18th, 2012
As if to prove that it is possible to take a good idea too far, on Monday (Oct. 15), Walmart-owned Chinese E-Grocer Yihaodian stretched the virtual supermarket pioneered by Tesco way beyond its reasonable limit.

Tesco, you'll recall, put billboards full of products on South Korean subway platforms, so consumers could use their phones to click on QR codes and order groceries for delivery while they waited. Nothing so small-minded for Yihaodianmdash;it plans to create 1,000 "augmented reality" supermarkets (you'll have to use a smartphone to see them) along streets in four Chinese cities, and each store will cover 1,200 square meters (more than 12,000 square feet) of wall or fence space.Read more...

Shopkick’s Clever Twist On Mobile Catalogues: In-Store Inventory Hook

October 18th, 2012
Shopkick has added an intriguing new feature to bridge the in-store and mobile worlds. It's a mobile catalogue, but its clever twist is that it interacts with real-time inventory from retail partners. To what end? When shoppers at home or at work say they like (with a little heart icon) a particular catalogue product, the app will alert them if it happens to be in-stock at a store they're visiting.

Shopkick didn't say how it is interacting with the inventories of its retail partners. However, given that the catalogues from each retail partner are relatively small, there's little need to grant access to the full inventory. All a chain would need to do is broadcast to the Shopkick app the inventory status of the couple dozen SKUs it is currently pushing in its mobile catalogue. This would be a relatively easy task. And although security is always a concern, the tiny number of products being shared would make that information of trivial value to rivals.Read more...

Kraft Trials Pit NFC Against QR. NFC Wins, But At A Price

October 18th, 2012
Kraft Foods, the $19 billion consumer goods company, has been trying to understand the relative consumer-reach powers of NFC and QR codes to see if either is going to resonate more with mobile shoppers. Its answer: Run shelf tests at five San Francisco-area grocery stories showing both NFC and QR to consumers and see what happens.

As the owner of brands Kraft, Maxwell House, Oscar Mayer, Nabisco, Planters and JELL-O discovered, NFC was the winner. NFC's engagement level was a dozen times greater than QR codes, and engagement time was 48 seconds for NFC compared with 5–10 seconds for QR. But NFC excludes many older phones and—crucially—all Apple iPhones and iPads. For many reasons, that's a dangerous segment to ignore.Read more...


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 17,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.