Top Stories



Wal-Mart Takes Back Its Supply Chain, IT In The Spotlight

May 26th, 2010
Supply chains don't get a lot of love from IT. They're not sexy; no customer-facing payment systems or kiosks to love, just pallets, diesel and rubber. But Wal-Mart is about to change that. Retail's $405 billion gorilla is taking over the trucks that deliver products from thousands of its suppliers. That may not sound like it has much to do with IT, but boy, does it ever. True to its contrarian roots, Wal-Mart is turning just-in-time inventory inside-out--and taking back its supply chain.

Wal-Mart isn't in the trucking business any more than its suppliers are, and just squeezing out a little savings in fuel costs would be a wasted opportunity. By stretching its supply-chain perimeter though, Wal-Mart will get much better control over the inventory coming in: when it arrives, how it arrives and how quickly it can be turned around. And that's all about IT.Read more...


Wal-Mart: “It’s Time For Chip-And-PIN In The U.S.”

May 20th, 2010
With major card brands and the banks strongly opposed to Chip-and-PIN efforts in the United States, there's only one way it's going to happen—and that happened Wednesday (May 19): Wal-Mart publicly forced the issue. When the world's largest retailer insists on a path, even Visa has to listen. And Wal-Mart is now insisting on a domestic Chip-and-PIN (EMV) program.

"As far as we are concerned, signature is a waste of time. It has to be PIN or nothing," Jamie Henry, Wal-Mart's director of payment services, told attendees of a panel discussion held Wednesday at a Smart Card Alliance event in Scottsdale, Ariz.Read more...


Should Wal-Mart Digital Signage Use Near-Time News, Weather, POS Data?

May 18th, 2010
It's 9:17 PM and customers in a Boston grocery store are wrapping up their shopping when some Blackberries and iPhones start vibrating the news of a key sports loss of the beloved local Red Sox against the rival New York Yankees. As frowns appear from frozen foods to the AAA battery endcap displays, all of the digital signs start flashing out messages of condolence, suggesting that shoppers commiserate with a case of Sam Adams. "We'll get 'em next time," the sympathetic store displays digitally declare.

Traditionally, in-store digital signage has been used for the mass-broadcast of commercials set by the chain and, sometimes, tweaked regionally. But why not make the content truly unique to a store, dictated by local weather, sporting events or near-time POS activity?, asks Michael Hiatt, who ran Wal-Mart's in-store media program until last year.Read more...


Wal-Mart Digital Makeup Trial: It’s the Inventory, Stupid

May 18th, 2010
Wal-Mart this month quietly began a 10-store trial of a cosmetics system—called the Wal-Mart virtual mirror—that uses a barcode reader and a digital camera for the virtual application of makeup. What's interesting in this 90-day trial are the ROI benefits beyond mere increased sales, such as reduced shrink (no need to throw out lipstick after a test), better availability of product and some natural social-shopping benefits via E-mail.

The trial is using Sprint CDMA for data connectivity, which made it easier for Wal-Mart to do the tests. Sprint CDMA didn't require any of the test systems to interact with the chain's LAN, thereby bypassing questions such as "Do I want to put in a separate WiFi network in the stores? With this, all we have to worry about is power," said one person involved in the trial.Read more...


Ice Cream Shop Uses RFID To Broadcast Latest Inventory

May 13th, 2010
At Izzy's Ice Cream Café in Saint Paul, Minn., a teenage scooper has just dished up the last of the strawberry cheesecake ice cream. When she pulls out the RFID-tagged strawberry label and replaces it with one for lemon custard, a colored dot of light on the wall announces the change to all within viewing distance. Within three minutes, the Web site is identically updated, deleting strawberry and welcoming lemon.

While the co-owner of this family-owned scoop shop said he likes the RFID technology, he's fonder of the push nature of his current flavor updater--where he tells his customers what he has--rather than the pull nature of a system in which his customers tell him what they want. When does customer feedback become too much?Read more...

Can The iPhone Make Even Contactless Look Good? The Curse Vs. The Cool

May 13th, 2010
Which is stronger: the curse of contactless payment or the coolness of the iPhone? Last week, Visa said it planned to launch an add-on to Apple’s iPhone that will turn it into a contactless payment device for Visa’s payWave system. Or maybe not.

The fact that Visa, along with a three-year-old Texas startup called DeviceFidelity, issued a news release and almost immediately tried to retract it is telling. Then again, the fact that Visa thinks it's possible today—in the age of Google cache and umpteen sites that seem to like publishing verbatim news releases—to take back a release after it's published is itself a very revealing statement.Read more...

Apple Envisions Phones Acting As Concert Tickets That Can Also Capture The Music

April 22nd, 2010
Apple is proving itself patently clever (sorry) by pushing Mobile retail interactions to a new level. What the digital content maestro filed to the U.S. Patent Office this month--on April 1, but it's no joke--is a way of using a smartphone to first purchase seats at a concert and then to literally use the device as the ticket to gain entrance and as the download location for a recording of the show when the concert is over.

By also using the phone to purchase food, beverages, t-shirts and other merchandise at the show, Apple's approach goes beyond convenience because of the CRM potential. For the first time, producers can learn precisely which guests are purchasing which extras and for how much.Read more...

Item-Level RFID At One Cent? By 2015, Printed Tags Could Do It

March 20th, 2010
Last week (March 18), a joint U.S.-Korean university research project announced a new approach to item-level RFID, one that is already delivering 3-cent tags and could easily hit 1-cent in volume production. The engineering differences are extensive, with the approach (a collaboration between Sunchon National University in Korea and Rice University in Houston) abandoning silicon-based tags for printed tags. Printed passive RFID, which could easily be woven into paper and plastic product packaging, has been a common RFID experiment for years, but the universities' 13.56-MHz 1-bit approach also abandons ink-jet printers for a gravure process. It uses single-walled carbon nanotubes for printing thin-film transistors. The schools have crafted a very specific methodology, even down to non-traditional cleaning liquids to prep the dielectric layer.

But even setting aside the price, the technology still has several technical hurdles to clear. The current footprint is about three times larger than today's barcode and it's been testing with a read distance of anywhere from 2 centimeters to 10 centimeters whereas project leaders say that it needs to read at about a full meter—at the very least, a half-meter—to be effective.Read more...

In A First, Google Does Real-time Joint Retail Trials

March 18th, 2010
In the 15 or so years that we've had E-Commerce, the industry has seen quite a few improvements, but nothing that radically changed the way people shopped or retailers sold. Local inventory search, which today is not even in its infancy (not really even embryonic; it's more like a zygote), is likely to be the first truly dramatic shift.

Last Thursday (March 11), Google made a major—albeit extremely preliminary—move into local inventory search through a deal with a handful of major chains: Best Buy, Sears, Williams Sonoma, Pottery Barn and the Vitamin Shoppe. But instead of working out this process internally and then bringing in retailers—or the reverse, with retailers figuring it out first—Google's objective is to run the earliest stage tests with various chains "so we're both learning how to do this in parallel," said Paul Lee, Google Product Search's business product manager.Read more...

Friend Or Foe: When P&G (And Other Partners) Push Direct Selling

March 10th, 2010
The growing movement of major league consumer goods manufacturers selling directly from their Web sites is hardly unexpected. But the lack of a defensive reaction from retail IT is. For more than a decade, a mountain of extranet projects has allowed data to flow freely from manufacturer to retailer, with real-time data about pricing, inventory and millions of marketing insights. Is it time to radically reevaluate what is being shared?

The direct-sell CG announcements are all couched in politically sensitive phrasing, with promises that it's just a short-term test to better understand mutual customers and that some of the data will be shared with retailers. Some even argue that these direct-to-consumer moves will help retailers make more money by allowing the manufacturer to better target its products. (That argument is not necessarily impressive, but making it with a straight face is.)Read more...

ABI: RFID Market To $5.4 Billion This Year, $8.3 Billion By 2014

March 10th, 2010

Although true item-level RFID is still years away, ABI Research is still confident that RFID sales will hit $5.4 billion this year. And it projects that number will reach $8.3 billion by 2014. The tagged segments expected to lead the way include real-time location systems, baggage handling, animal ID and a smidgen of item-level use in high-end fashion and other similar high-priced retail offerings.

“Other key opportunities include electronic vehicle registration, continued penetration of RFID-enabled e-ID/e-government documents—including health cards—and continued expansion of library systems. Also worth watching: slowed but continued progress in retail CPG supply chain management and multiple flavors of asset management that leverage RFID technologies, including specialty passive UHF tags,” said ABI’s practice director, Michael Liard. “Modernizing applications for RFID will grow more rapidly than their traditional predecessors such as access control, automobile immobilization, electronic toll collection and others that account for slightly more than 61 percent of the total market today. These applications are expected to grow 6 percent compounded annually from 2010 through 2014. In contrast, modernizing applications—animal ID, asset management, baggage handling, cargo tracking and security, POS-contactless payment, RTLS, supply chain management and ticketing—are forecast to grow roughly 19 percent in the same time period.”…

Secret Service Investigating Debit-Only Breach Of An Alabama Dairy Queen

February 24th, 2010

For the mysterious data breach crime folder, the U.S. Secret Service is investigating a series of payment card thefts—originating at an Alabama Dairy Queen—that has only been impacting debit cards. The Hanceville, Ga., police department’s Capt. Jimmy Rodgers is quoted in a local newspaper saying: “At that location, somebody has apparently tapped into the Internet server and hacked into the debit card system, and they’re printing out the customers’ debit card numbers and using them all over California and Georgia.”

This is a disturbing trend, as retailers see debit card approaches as a way to try and reduce interchange costs. It’s even more frightening when we factor in that debit cards are more likely to suffer a processing glitch—as Best Buy and Macy’s discovered last year–than credit cards and that consumers impacted by a debit card data breach are far more exposed than they would have been had they used a credit card.…

Pizza Hut CIO Proving The Unprovable: Mobile ROI

February 11th, 2010
Pizza Hut CIO Baron Concors oversaw what could easily be the most successful mobile application and certainly the most successful retail mobile app, a colorful applet that is directly responsible for "millions of dollars in additional sales" and 1.5 million downloads from Apple. And yet, when he was fighting to get it funded and approved, his return-on-investment (ROI) argument was weak and speculative.

Concors said he was lucky; his senior management team is open to creativity and was willing to roll the pizza dough dice on what sounded like an interesting idea for the world's largest pizza chain, with its more than 7,500 U.S. restaurants and more than 5,600 shops in 97 countries and territories globally. But few CIOs are in that position, and that's a piece of reality that could cripple the nascent retail mobile app space. "A lot of companies are struggling with whether to enter this space because of the ROI issue," Concors said. A big part of the problem is that far too many retailers are deploying mobile apps for the wrong reason or doing it the wrong way.Read more...

Retail Vendors: Forget New Functions. Just Make It Simple And Cheap

February 3rd, 2010
Do you know what question Franchisee Columnist Todd Michaud hates? “If I can go buy a basic cash register for a couple hundred bucks that does everything that I need, why on earth do I have to spend $10,000 on a POS? Someone has asked him this question almost once a week for the last 4 years. Do you know why he hates it? Because after 4 years, he still doesn't have a good answer.

"I typically say something like, 'It is our requirements that drive us to that price point. Adding centralized menu management, polling, integrated inventory management and labor management into the mix requires that we buy this type of system. You can’t do that stuff with a cash register or basic POS.' Typically, the response I get is something like: 'So? I don’t care about all of that complicated stuff. I just need to ring sales.' It’s no wonder franchisees think that retail CIOs are out of touch with reality. Here is the really crappy part. When you add in all of the other costs, such as high-speed broadband, hardware maintenance, software maintenance, help desk, installation, inventory management, labor management, training and various upgrades along the way, that $10,000 POS is probably going to cost franchisees $20,000 over five years--not to mention that they wrongfully expect the system to last 7 to 10 years.”Read more...

Cambridge University Calls Verified By Visa Secure Protocol Terrible Security

February 1st, 2010
At a presentation at the Financial Cryptography and Data Security conference, a Cambridge University computer lab team dissected the recent 3-D Secure (3DS) protocol—branded as Verified By Visa and MasterCard SecureCode. The team found that not only was the security lacking, but it sharply undermined other security mechanisms.

"3-D Secure has so far escaped academic scrutiny, yet it might be a textbook example of how not to design an authentication protocol," wrote Cambridge University's Steven J. Murdoch and Ross Anderson. "It ignores good design principles and has significant vulnerabilities, some of which are already being exploited. It's bad enough that EMV Verified by Visa and MasterCard SecureCode have trained cardholders to enter ATM PINs at terminals in shops. Training them to enter PINs at random E-Commerce sites is just grossly negligent." The pair, however, found that 3DS did get one part right: the money and where it comes from. Although "other single sign-on schemes such as OpenID, InfoCard and Liberty came up with decent technology, they got the economics wrong, and their schemes have not been adopted. 3-D Secure has lousy technology but got the economics right, at least for banks and merchants. It now boasts hundreds of millions of accounts."Read more...

The CIO’s Job Description: Top-Notch Sales Executive

January 28th, 2010
At an NRF panel earlier this month, McDonald’s CIO David Grooms was asked by the moderator what he would tell people his primary job is. Grooms said, "I'm in sales," and then added that he wanted his staff to say, "We make hamburgers." Grooms is right that a CIO needs to be a master of sales, but that's mostly because the CIO needs to sell both upstream and down.

The CIO needs to sells ideas upstream to senior management and sideways to line-of-business peers, convincing them that the technology is the right move and that it needs to be approved and funded. If that works, it's barely 30 percent of the battle. If the stores aren't sold on the idea, Franchisee Columnist Todd Michaud opines, the data won't be used and the project is doomed to fail. And you're to blame.Read more...

In Citi’s View, Costco Is The Least Sophisticated Retail IT Shop, CVS The Most

January 21st, 2010
One of the most respected retail technology trackers on Wall Street, Citi, has put out a list of major retail IT leaders, ranking them from the most sophisticated and advanced to the least sophisticated. The most worldly ones include, in order, CVS, Walgreens, JC Penney, Target and Kohl's, while the more hick-like chains are Costco, BJ's, Family Dollar, SuperValu and Safeway.

"We consider CVS and (Walgreens) to be the most advanced, as they have already implemented chain-wide computer synchronization, advanced inventory management and pharmacy workflow optimization systems," said Deborah Weinswig, from the Citi investment research and analysis group. "The warehouse clubs are considered to be the least sophisticated of the group. However, BJ and (Costco) have fewer inventory management needs as a result of their unique business model."Read more...

Forget Your Well-Thought-Out Mobile Strategy: You Now Need Three

January 21st, 2010
The most popular parlor game in retail tech circles these days is plotting out mobile strategies. For some, that strategy may be little more than "not now." But the simple act of trying to craft a single, coherent mobile strategy may itself be flawed. Most retailers now need to prep three distinct strategies for dealing with the three separate ways mobile devices will be used.

The mobile retail world has now neatly morphed into three categories: consumer-used (with true M-Commerce, mobile research from home and on the road, etc.); retailer-used (for price checks, inventory inquiries, in-aisle supply chain inquiries, etc.); and consumer-in-store (2D barcodes, price comparisons, SMS communications with the chain, watching demos, mobile research from within the store, direct payment, etc.). To make matters worse, some applications sit in multiple categories, such as a retailer-used device that is temporarily given to a consumer for checking online inventory or seeing a demo.Read more...

Home Depot’s $60 Million PDA Investment

January 18th, 2010

Home Depot will spend about $60 million on more than 10,000 handheld units that are designed to help associates perform mobile checkouts, process payment cards, stock shelves and make phonecalls, according to BusinessWeek. “This is the first big customer-service tool we’ve given our associates in a very long time,” said Home Depot CIO Matt Carey.

The chain has been trialing these devices since 2008, when we reported that they were initially tested along with an RFID-based loyalty card that flagged associates when certain high-priority customers entered the store and set off a door-based reader.…

Will Best Buy’s Pushback Against Visa Contactless Payment Change The Market Or Is It Irrelevant?

January 14th, 2010
When Best Buy kicked Visa contactless payment out of its stores, some gave the $35 billion chain kudos for standing up to the world's largest card brand on the sensitive topic of interchange rate. But how truly gutsy was it? Will it make any difference at all?

On the Best Buy side, though, many attendees at the National Retail Federation (NRF) conference were wondering whether the change would have much of an impact at all. One attendee compared the move to a hypothetical apparel retailer that is furious about children working in overseas sweatshops. To put an end to it, the apparel retailer would tell the supplier, "That's it! No more. I want you to take the pink frilly tuxedos with the Mod Squad characters sewn into the chest and get them out of here and don't bring me any more pink frilly tuxedos with the Mod Squad characters sewn into the chest until your suppliers have changed their practices. You can bring me lots of other clothes, but I am now drawing the line at pink frilly tuxedos with the Mod Squad characters sewn into the chest. It's for the children."Read more...

Discover: Contactless Payment Sticker Users Inadvertently Crippling Performance

January 14th, 2010
In a cruel twist of fate, hapless contactless payment supporters (a dying breed if ever there was one) were swiped by some more bad news this week, courtesy of a new report from Discover Financial Services. It seems that in a trial of its Zip contactless payment program, most consumers tried to hide the stickers inside their phones, a move that unintentionally cripples performance.

According to a copy of a report that Discover prepared about its initial trial results, 69 percent of those participating in the Zip trial wanted the sticker hidden. "The pilot management team was impressed by the creativity demonstrated by participants in finding various ways of hiding stickers under the phone’s protective case ("skin”), under the battery cover and other unseen yet convenient locations."Read more...

Want To Talk Back To StorefrontBacktalk At NRF?

January 7th, 2010
For those of you are venturing to New York City's Javits Center for the NRF show next week, I want to first assure you that your fears that it will be freezing in the Big Apple in mid-January are unwarranted. The latest forecasts have high temperatures staying below 32 degrees so freezing it will not get. On Sunday, it will be a balmy 26 degrees.

But as long as you're coming, we'd love to ask you to drop by some of the StorefrontBacktalk events and do what our readers do best: yell at us. The first shouting opportunity will be at the RetailROI event at the Marriott East Side (Lexington and 49th) on Saturday at 2:45 PM. This charity event ( is designed to raise money for global orphan care and adoption support. But to do that, we get geeky for awhile. Our panel is on retail security and it starts at 2:45 PM and features the CIO of the world's largest restaurant group: Delaney Bellinger from Yum Brands (Pizza Hut, KFC, Taco Bell and Long John Silver's, among others). Also on the panel are two of our esteemed columnists (Franchisee Columnist Todd Michaud and PCI Columnist Walt Conway) plus Mark Rasch, the former head of the U.S. Justice Department's high-tech crimes division.Read more...

An NRF StorefrontBacktalk Reader Get-Together?

December 16th, 2009
By any chance, are you planning to attend the NRF Bigshow (New York City, January 10-13, 2010)?
StorefrontBacktalk would love to arrange a casual get-together with our readers at or near the show, so we're trying to determine how many readers are both attending the show and might be interested in connecting with us and, much more importantly, with each other. Hence, our one-question survey this week:


If The iPhone Embraces NFC, Will It Be Too Late To Make A Difference?

November 12th, 2009
For years, retail efforts with NFC phones have been far from smashing successes. The technology has limped along from trial to trial, the quintessential answer in search of a problem. The latest rumors out of Cupertino suggest that the next-generation iPhone will ship with NFC pre-installed. If true, will this make a difference to the technology's acceptance, or is it already too late?

A couple of years ago, Near Field Communication was seen in some influential corners—such as at consumer goods giant Procter & Gamble—as the ultimate victor in the fight between NFC and 2D barcodes. Many saw NFC as the better technology, with 2D barcodes being used as a placeholder until NFC was ready. But in the last couple of years, neither technology has gotten very far in the U.S. Few phone manufacturers included the feature and even fewer developers tried to design for it.Read more...

Retailers Urge Supreme Court Smackdown Of Process Patents

November 12th, 2009
Relief may be in sight for retailers that are afraid someone somewhere has secured a patent covering some mundane process they regularly use in the course of selling stuff—be it the way customers swipe payment cards, their methods for collecting loyalty program data or the functioning of their Web site's shopping cart feature. The U.S. Supreme Court on Monday (Nov. 9) heard arguments about process patents and there were indications that it might radically tighten the rules surrounding such patents. Seven E-tailers, including J.C. Penny, Talbots, L.L. Bean and, are urging the high court to clamp down on patent violation lawsuits by so-called "patent trolls," which are often shell companies claiming rights to vague business-method patents.

Many of the Supreme Court justices expressed significant skepticism about whether the current system should be maintained. Questioning one attorney about a financial approach patent, Justice Anthony Kennedy raised a Congressional intent argument. "In your view, clearly those would be patentable: the explanation of how to compile an actuarial table and apply it to risk. It's difficult for me to think that Congress would have wanted to give only one person the capacity to issue insurance." The newest member of the court, Justice Sonia Sotomayor, asked how far process patents could go. "How do we limit it to something that is reasonable? Why not patent the method of speed dating?" Read more...


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