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RFID


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...


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A Clever Way To EAS Protect High Heels

June 13th, 2013

High heels present some interesting LP challenges. Not only are they easily slipped on and off without the need for a monitored dressing room, but they need to be tried on in the store, which can make typical security tags counterproductive. At the NRF Loss Prevention Conference show in San Diego on Wednesday (June 12), Tyco Retail rolled out a new EAS approach.

Tyco’s heel-friendly approach? The tag connects to the back of the heel, with an adjustable knob for different shoe styles. In theory, this shouldn’t damage the product. Tyco argues that although many shoes “have buckles, eyelets, etc, that allow retailers to easily attach” an EAS tag, a “wide variety of women’s pumps and men’s loafers don’t have a convenient place to hook an EAS tag.” As long as the thief doesn’t have a high magnetic detacher, Tyco suggests it should be difficult to remove the tag. Then again, this is a thief, after all. Hopefully she doesn’t simply steal the store’s—or some other store’s—detacher.


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JCPenney CTO Kristen Blum Gone, IT Transition Questions Remain

June 5th, 2013
JCPenney CTO Kristen Blum, who was hired to execute the IT side of former CEO Ron Johnson's grand vision for the 1,100-store chain, is out. The retailer confirmed on Wednesday (June 5) that Blum is gone with the standard thank-her-and-wish-her-well statement. But what's left in her wake is a set of questions about how JCPenney will deal with a massive IT overhaul that it can't really afford but may not be able to reverse.

Let's be clear: None of that uncertainty was Blum's fault. The decision to rip out 500 legacy systems and replace them with Oracle came from Johnson and former COO Michael Kramer. Kramer was the exec who ripped into the chain's culture and called its systems and IT infrastructure "a mess" last year. Blum's job was to retire systems, streamline processes and push forward into Oracle—and she reportedly managed to do that without creating nearly as many enemies as some of Johnson and Kramer's executive hires.Read more...


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What You’re Missing: Urban Outfitters Charging More Online, Does Sears Want To Go Members-Only?

May 29th, 2013

Your friends here at StorefrontBacktalk editorial also now publish a daily retail site, called FierceRetail, and wanted to give you a sense of what you’re missing by not visiting or grabbing its free newsletter. Urban Outfitters discovers that it can get away with charging more online than in-store. See? Sometimes conventional wisdom is conventionally wrong.

A look into how federal judges are likely to force changes in how price anchors are set in-store plus some questions about whether Sears is thinking about becoming members-only. Was Best Buy’s Facebook promo a victim of its own great deal—and some we-should-have-seen-this-coming rip-off artists? We also threw in our take on Walmart’s $82 million hazardous waste settlement, where Walmart spoke of mouthwash and hairspray and the feds said they were pesticides. (You say tomato, I say Molotov cocktail…) All of that—and dozens more stories—and that was just this week. And Monday was a holiday! Drop by and check it out. It’s free and the snacks all have zero calories. (That may be because they don’t exist.)…


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Tesco Really Doesn’t Like NFC

April 26th, 2013
Near field communication (NFC) is retail's whipping boy these days, with almost every analyst and vendor going out of their way to point out how poorly it's done and how bleak the NFC future is. And although deep shopper apathy about NFC has justified many of those critiques, major chains—wanting to keep their options open—have hesitated in outright attacking NFC. That's why a blistering critique from the world's third largest chain, Tesco, is so potentially devastating.

"NFC was revolutionary 10 years ago but I think it just might have passed its sell-by date," Lyndon Lee (Tesco Enterprise Consultant Architect) told attendees at a mobile payments conference in London this week, according to a report in NFC World. "Is mobile NFC at the right place, at the right time? I don't see any real movement or activity. NFC usability is not really revolutionary and, for the general public, is it really that cool? I think the next generation won't think it's cool enough for them and they won't use it. Mobile NFC is unappealing."Read more...


JCPenney’s Johnson Is Out, Ullman Is Back. Now What?

April 9th, 2013
What happens next at JCPenney (NYSE:JCP), after the 1,100-store chain fired CEO Ron Johnson on Monday (April 8) and replaced him with the CEO that Johnson replaced, Mike Ullman? The retailer isn't saying. But one thing is certain: The chain won't just be turning the clock back to the day Ullman departed in 2011. Many of the internal changes Johnson instituted at JCPenney are effectively irreversible, including remodeling all the chain's stores and replacing much of the chain's IT capability. That money is already spent.

Johnson had already reversed many of his decisions that were the most unpopular with shoppers—including his elimination of sales, discount pricing (including "mark up to mark down") and coupons. And then there's Johnson's beloved shops-within-the-store concept—which isn't likely to be reversed, mainly because it was originally the brainchild of a former Sephora executive with a familiar name: Mike Ullman.Read more...


Care About Issues Beyond IT?

April 6th, 2013

One of the results of StorefrontBacktalk‘s being acquired back in December is that we are going to be expanding into coverage that goes beyond Retail IT into other areas of retail. The first example of this launched last week and is a daily newsletter and site called FierceRetail.

The site applies the same kind of perspective, analysis and bad jokes that StorefrontBacktalk has always delivered, but we can now explore issues way beyond IT. Consider our coverage of an unorthodox Apple patent, the reasoning behind the Sears Portrait shutdown, why Target’s Manatee mishap is a lot worse than it looked, Samsung’s real retail strategy, why Best Buy and Target’s Geek Squad alliance was doomed and stats showing Visa having all-but-cornered the debit market. It’s all free, of course. If you’d like to sign up, our latest thoughts will be in your Inbox early each morning.…


Costco CFO on Item-Level RFID: “That Ain’t Happening”

March 13th, 2013
Item-Level RFID has its backers at Macy's (NASDAQ:M) and a lot of supporters at JCPenney (NYSE:JCP) (if the retailer only had the cash). But a warehouse chain such Costco (NASDAQ: COST)—with aisle inventory stacked dozens of feet in the air—should be a natural. Not so, Costco CFO Richard Galanti said Tuesday (March 12). In fact, not even close.

Asked about ways to cut labor costs, Galanti went out of his way to dismiss it, arguing that he's not buying item-level RFID's promises. "Everybody thought that RFID would free up the front end and reduce our biggest labor cost area. That ain't happening." (How can you not like a CFO who tells a recorded investor call "that ain't happening"?) Costco has always been the contrarian among the largest chains. Read more...


Macy’s Stops Reporting Online Stats, Blames Too Much Channel Blur

February 27th, 2013
Arguing that "the line between stores and the Internet is blurring so much," Macy's (NYSE:M) has become the first major publicly held retailer to stop reporting its E-Commerce stats. Setting aside the fact that Macy's would always see less disclosure—especially to rivals—as a nice thing, the move signals an important step for omni-channel/merged-channel retailing. The day when in-store, mobile and online are so intermixed that they can't be meaningfully broken out is the same day true merged-channel retailing has happened. For Macy's, that day happened on Tuesday (Feb. 26).

"Candidly, it's getting so hard to know what's a store sale and what's a mobile sale and what's Internet. It's getting harder to figure out the lines between them," Macy's CFO Karen Hoguet told analysts on Tuesday. When asked for some E-Commerce projections, she said: "I really can't give you that number. I mean, I don't know it. But clearly, the growth is continuing very aggressively. But sometimes, it's being bought on a mobile device sitting in a store. So I'm not sure how to define that."Read more...


PCI’s New Mobile Guidelines Acknowledge Huge Hurdles

February 15th, 2013
The PCI Council officially released its mobile payment guidelines Thursday (Feb. 14), a document that turned out to be anything other than a Valentine to retail IT execs who'd love to know the "all-clear" path to doing mobile payments and staying PCI compliant. Instead, it's more of a pragmatic acknowledgement of the various mobile hurdles that the council sees as currently insurmountable.

The recommendations, of course, also offer the generic list of best practices for mobile device security (such as strongly encouraging full-disk encryption), which is certainly a handy checklist for chains just starting to seriously explore mobile payments. One key point of the report is to acknowledge the very complex nature of mobile systems, which have far more players than traditional fixed POS systems. For example, the report speaks of the desirability of lab validation for mobile devices and why it's simply—and regrettably—not practical.Read more...


JCPenney’s RFID Reversal Guts In-Aisle Checkout

January 30th, 2013
When JCPenney very publicly and very aggressively embraced a chain-wide, all-product item-level RFID strategy—with the promise of a full rollout by February 1 (2013)—executives cited supply-chain savings as a key driver. The chain has now reversed course, killing much of the RFID program to save money. When a chain is under this much financial pressure, a little savings today is a lot more valuable than a lot of savings down the road.

But of much greater significance is the digital domino effect. In this case, JCPenney was building its in-aisle checkout on the premise that it had item-level RFID fully in place. And if remodeled stores have dramatically scaled back the number of cashwraps (because customers would be doing in-aisle checkout), does that mean all those customers will have to line up for the limited number of cashwraps? That's not going to be pretty—presuming JCPenney can actually get enough returning customers to make it a problem.Read more...


What Happens When A Merged-Channel Supply Chain Undermines Itself

January 16th, 2013

Retailers have discovered that, although the benefits of a truly merged-channel supply chain are vast, the pain-points are potentially even more vast—at least in the beginning. Michelle Tinsley, the director of transactional retail at Intel, said chains can find it difficult to strike the right balance. “The customer views that brick-and-mortar location as today’s face of that retailer, so they need to uphold that brand image and take the (online) returns,” Tinsley said. “But in this merged world, (the chain needs to) allow any location in that nationwide retailer to see those shoes now back into inventory and to then sell them very quickly and ship it from that location. So even though it was

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returned to a brick-and-mortar store, let it be seen in those warehousing systems so that the next order that comes in over the Internet or from a store in Cincinnati gets placed from that store in, say, California.”

In Part Two of this week’s StorefrontBacktalk Radio segment, Tinsley argues that this problem is one manifestation of the old way retailers look at problems. “I think you need to flip it. Instead of saying, ‘I’ve got the inventory in the wrong place,’ say, ‘Well, I’ve just got to open up the inventory to where the next demand signal is coming from.”


StorefrontBacktalk‘s Next Chapter

January 8th, 2013
As the founder of StorefrontBacktalk, I am thrilled to announce today that StorefrontBacktalk is now a member of the FierceMarkets family of B2B publications. FierceMarkets is a wholly owned subsidiary of the Questex Media Group.

Our voice and approach—for good or for bad—will not change, and we have been told to continue delivering the same mix of breaking retail IT stories, analysis and opinion columns. (Yes, and some truly awful jokes. It's in the contract that those stay.) The bylines here will stay, as Frank Hayes, PCI Columnist Walt Conway, Legal Columnist Mark Rasch and the rest of the team will continue to do that which we do. Me, too.Read more...


U.K. Chain John Lewis Makes Vendors Pitch Retail Tech TV-Style

November 27th, 2012
How far can retailers go to get beyond retail technology that's the same as what every other chain has? U.K. department store John Lewis held a TV-style competition this month that forced start-ups to pitch ideas for solving specific problems defined by the upmarket chain—and it was judged by business-side managers alongside IT management.

The result, as our media partner Retail Week reported, isn't just that vendors were pulled into thinking in terms of actual retail needs. It also pulled non-IT managers into thinking about IT. As John Lewis Retail Operations Manager Mark Lewis said, "It sparks ideas in our minds."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...


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...


FTC Slaps Down Retail Use Of Tracking Software

October 15th, 2012
In a case that has potentially significant consequences for NFC and RFID applications, the U.S. Federal Trade Commission is cracking down on so-called "phone home" technologies being used by computer rental companies to monitor consumer behavior. When contemplating the use of any technology that provides use, location or other information about a product, retailers should be careful to ensure consumers know—or are at least able to know—exactly what the product is doing.

Don't be so quick to conclude that your people aren't doing this, though, as it extends way beyond rent-to-own. Many current—and many more future—devices will have technology that enables post-purchase information capture. For example, RFID tags that aren't disabled before the customer leaves the store might enable retailers, marketers or others to capture data from those devices without the consumer's knowledge or effective consent. And don't get Legal Columnist Mark Rasch started on mobile.Read more...


Urban Outfitters Dumps Cash Registers, Doubles Up On Datacenters

October 3rd, 2012
Urban Outfitters is dumping its cash registers. The 456-store chain—which includes Anthropologie, Free People, Terrain and BHLDN stores—is retiring dedicated registers, replacing them with iPod Touches for in-aisle checkout and iPads for cashwraps, the chain's IT head told analysts on September 27.

The shift is part of an IT revamp that includes a merged inventory system, ship-from-any-store capability and improved turnaround on returns—in addition to a new West Coast datacenter that effectively works as a disaster recovery hot site for the company's existing East Coast IT operations.Read more...


How Do I Track Thee, Mobile Shopper? Let Me Count The Ways

September 24th, 2012
For quite a few years now, retailers have salivated over the idea of mobile phones revealing exactly where shoppers are at all times. Retailers would know which displays customers are standing in front of, for how long and what actions they take right afterward. Unfortunately, even though mobile devices have advanced quite a bit recently, the ability to know location with any precision has been elusive.

No major advances in mobile location technology have emerged. In the last couple of months, however, quite a few very different approaches to location tracking have emerged. These range from leveraging the earth's magnetic field to piggybacking the data already used by mobile ads, tracking a combination of Wi-Fi and Bluetooth signals, and riding the audio signals from existing music speakers. One app even reacts to light patterns from specially enhanced LED bulbs.Read more...


JCPenney’s In-Aisle Checkout And Store Redesigns Are About To Collide

September 20th, 2012
JCPenney showed off its new "shops within the store" concept on Wednesday (Sept. 19). But there are still more than a few unanswered questions about exactly how the retailer's in-aisle checkout will work when it goes live in February 2013. The biggest issue: Will customers treat the clusters of mini-shops like a mall (pay when you leave each mini-shop) or like a department store (pay all at once at the end)?

The 1,100-store chain's CEO, Ron Johnson, admits that JCPenney is still figuring out the workflow for checkout. He'd better work fast—this is a lot more complicated than anyone assumed.Read more...


Apple Arrest Puts Heat On Mobile Checkout Policies

September 5th, 2012
Do the very nature of mobile checkout apps mean that retailers must radically rethink shoplifting policies? (Hint: The answer is "yes.") After Apple literally sent an 18-year-old Apple Store customer to jail in New York City last month—after the customer apparently failed to click the final complete transaction button—the broader implications for retailers are significant. Shoplifting policies are based on a simply binary: Is the customer leaving the store with an unpaid-for product? But there needs to be proof of intent. And for the next year or two—while consumer-controlled mobile in-store purchases are very new—there had better be overwhelming proof of that intent.

What should be the policy if the customer absentmindedly—or sloppily or in haste—forgets to click an icon? Even more frightening, what if the shopper does properly process the transaction on his/her mobile phone but the application or the transmission glitches, for whatever reason?Read more...


Macy’s: Adding Same-Day Delivery Would Cost Us Next To Nothing

August 15th, 2012
The big news from Macy's earnings call on August 8 isn't that the department store giant might someday offer same-day delivery if customers ever show a desire for it. The real news is that same-day would require almost no capital outlay, nor will expanding Macy's current store-to-door delivery program beyond the currently planned 290 stores, according to the person who should know: Macy's CFO.

By not building out its delivery capabilities according to some grand plan, the 800-store chain has put itself in a position to do almost anything it wants. And because the CapEx is so low, the ROI is essentially instantaneous.Read more...


Testing Shows Mobile POS Power Supply Sharply Reduces Read Range

August 15th, 2012
Due to a mobile power supply issue, MasterCard has discovered that retailers using a smartphone as a portable POS may find that customers will need to hold their card right against the antenna, which is hardly the way it's supposed to work. The problem, which was discovered in internal MasterCard prototype phone testing, involves the fact that traditional POS AC powered from a wall outlet, whereas mobile phones are powered by small batteries.

Less power means shorter antenna range, which in turn means the payment card needs to be almost touching the antenna. "The read-rate is not what you need it to be, certainly not the 4 centimeters you expect it to be," said John Verdeschi, Senior Business Leader of Product Development at MasterCard. Read more...


Even Cutting-Edge IT Couldn’t Save Burlington Coat Factory From $1.5 Million Penalty

August 1st, 2012
For decades, Burlington Coat Factory has been one of the most cutting-edge retail IT shops anywhere by being first—or close to first—in its deployments of Unix, Oracle, the Web, E-mail, TCP/IP, symmetrical multiprocessing and Linux, among many others. But even that type of IT pedigree couldn't help the discount clothier do what hundreds of associates could do manually. Last week, that cost the chain a $1.5 million penalty for selling recalled children's clothing.

The penalty, from the U.S. Consumer Product Safety Commission (CPSC), was issued because the government said Burlington had deliberately and knowingly sold recalled children's clothing.Read more...


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