Top Stories



Burger King Trial: No PCI, No Hardware Changes, A Lot Of Cloud

June 14th, 2012
Burger King has been doing its own mobile payment trial at about 50 stores near Salt Lake City in Utah. But the fast-food chain isn't working with Google Wallet, ISIS, PayPal or any of the other major mobile players. Its approach is trying to avoid the political—and technological and security-related—friction associated with the more well-known strategies by using a Starbucks-style stored-value card, and then adding a heck of a lot of cloud.

Burger King's method can work on any iPhone or Android, completely denies any payment-card data to the retailer (keeping the whole trial out of PCI scope), requires no hardware changes and is all based on a cheap printed QR code stuck on the back of the POS or on a drive-through window.Read more...


U.K. Grocer Turns Warehouse Management Dashboard Into A Video Game?

June 5th, 2012

Flashy customer-facing technology is fine, but it’s nice to see a retailer giving employees something shiny to look at, too. U.K. online grocer Ocado is now using what looks like a 3D animated video game to give managers a better view of highly automated warehouse operations. Managers can “fly through the warehouse and see what’s happening in bright video-game-like colors,” a Bloomberg report said.

A “first-person grocer” may sound silly, but consider a typical software dashboard—nothing but numbers and acronyms. Even if a problem flashes red, it still takes time for a manager to identify what the numbers mean. Ocado’s system uses analytics to flag any efficiency problems in the 295,000 square foot distribution center; the game graphics are then used to render views of the problem. Like Kroger with its self-checkout tunnel, Ocado built this system itself, because no vendor offered the type of software it needed for DC management. No word on whether Ocado, like Kroger, plans to market its homegrown system to other E-grocers. (Or maybe just polish it up and sell it to video gamers. If they’ll buy baseball and auto theft, there’s gotta be a market for warehouse operations.)…


The Next Batch Of Monthlies Barely A Week Away

June 5th, 2012

Just a reminder that StorefrontBacktalk now has five free monthly newsletters, each one focusing on a different key area for us: 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.

The Monthlies publish the first half of each month, and they are a great way to catch up on all of the news in a given area. So before you miss the June Monthlies, sign up for your free copy. …


Inspections Should Be A Standard For Any New CIO

May 30th, 2012
As an IT leader, Retail Columnist Todd Michaud's least favorite phrase from his business partners is, "Well, can't you just simply…" No matter how someone finishes that sentence, the answer is, "No." The implication being that this person in Operations, Marketing or Finance believes he or she knows a simple way to solve the problem at hand. But it is never that easy. If it was, it would have been done already.

One of the biggest reasons CIOs fail—and, as a result, have such a high turnover rate—is the ghosts of decisions past.Read more...


Judge Slaps Down Patent Troll Case Against Target, Amazon, Costco, Citing Obviousness

May 23rd, 2012
Although far from the sweeping repudiation of patent trolls suing retailers that some have wishfully argued it is, a federal judge on Monday (May 21) killed a patent lawsuit against Target, eBay, Amazon, Costco, Office Depot and Zappos (and others) because, the judge said, the retailers had made a "strong showing of obviousness." As an added point of emphasis, the judge ordered the plaintiff to pay all of the retailers' costs, which is typically done when the lawsuit is considered of especially minimal merit.

The patent case against those chains—as well as Microsoft, Cabela's, Dell, Newegg, Hewlett-Packard and Audible—was brought by Kelora, which said it had patented a way to let shoppers isolate search results by color, price, date, brand, size, etc.Read more...

Should Forensic Tools Be Sold To Anyone?

May 23rd, 2012
When a software vendor creates a tool for forensic data-breach investigators, can it—should it?—take any steps to try and make sure that product is sold to legitimate investigators and not to cyberthieves? It's a tricky issue. Unlike limiting sales to government law enforcement, forensic investigators are not licensed and they can work for any retailer or consulting firm or security company. What type of test of legitimacy could possibly work?

This came to mind because of an interesting product rollout on Monday (May 21) by a vendor called Passware. Its launch involves a means of grabbing passwords from within any Excel spreadsheet or Word doc by quickly locating encryption keys in memory.Read more...

JCPenney IT “Is A Mess,” Says COO

May 17th, 2012
Now it is IT's turn to take the blame for JCPenney's woes. On Tuesday (May 15), JCPenney COO Michael Kramer told analysts that problems during the chain's terrible first few months under its new "Fair and Square" pricing approach (store traffic down 10 percent, sales down 20 percent) were compounded by out-of-control inventory management and legacy system maintenance that ate up 90 percent of the IT budget—both fundamentally IT problems.

The result: It costs JCPenney at least $600 million per year more than it should to run the chain—which explains a lot about the quarter's $55 million operating loss. "I can think of no other thing to say about our systems and our IT infrastructure, and I have seen a lot of them: It's a mess," Kramer said.Read more...

Big Data Is Exactly What You Think It Isn’t

May 16th, 2012
Who cares about Big Data? You should. All of a sudden, Web logs that were kept simply for troubleshooting purposes can now be mined to determine valuable information about customers' preferences, writes Retail Columnist Todd Michaud.

Logs that are created by physical machines can now be analyzed en masse to look for information to help advance a business. Data from social networks can now be mined for customer sentiment. These problems were too big and too complex before. But now, answers are within reach.Read more...

A Better Way To Search StorefrontBacktalk

May 16th, 2012

With more than 3,000 stories, columns and GuestViews in the content database here at StorefrontBacktalk, we thought it was time to do a little upgrading. Starting this week, readers (both free and Premium) can search for stories by limiting the search to just the story’s headline—as opposed to the headline and the full text. (Note: Right below the search bar, readers can choose HED Only or Story And Hed.)

The ability to isolate a search to the headline can be useful in two ways. If you happen to remember that the headline mentioned Target, for example, you need not see every story that mentioned Target (or even used the word “target”). The second way is practical. If you want a story that is primarily about tokens—and not a story that merely mentions the word somewhere—the headline-only search can be helpful.…

32-Point Font Might Save Your IT Career

May 9th, 2012
It's you versus the sales guy in an epic battle over your IT career. The sales guy has a polished presentation about the features and benefits of his products and services. You have a status report. The sales guy has access to unlimited resources to make your business partners' wildest dreams come true. You have one really great guy who you've overworked to the point that you carry a ton of personal shame.

The sales guy says, "Yes. Yes. Yes." You say, "No. No. No." In this surreal world, pens Retail Columnist Todd Michaud, you are watching your hard-fought IT career be dismantled by an onslaught of companies that shake your hand and look you in the eye as they pitch your demise one product and service at a time. And you had better buckle-up, Buttercup; it's only going to get worse.Read more...

Angry Nerds: The iTunes Youth Legal Nightmare

April 25th, 2012
It's not just those birds that are angry these days. The process by which Apple allows teens, pre-teens and even toddlers to download free apps, and then purchase game currencies within these free apps, may have landed the computer giant in hot water—with both parents and at least one federal district court in San Jose.

The case revolves around a longtime legal reality: Minors cannot agree to a contract. If they pretend to agree, it's non-binding and can't be enforced, writes Legal Columnist Mark Rasch. But what if an adult gives the child their password and permission to make a purchase? It's still the child doing it and the contract, therefore, probably can't be enforced.Read more...

Turning Back Office Into A Game, IT Style

April 25th, 2012
Why is it that the same people who will easily spend hours playing Angry Birds each week won't spend an extra hour improving their retail operations? Saving money just isn't sexy or fun. It's boring, and that's the biggest problem.

After many years in retail operations, Retail Columnist Todd Michaud is still surprised how little traction well-developed back-office applications receive. You would think that saving money on inventory, labor or marketing expenses would be all the motivation that a retail owner or general manager would need, but that rarely seems to be the case. That got Michaud thinking about some of the new social applications, like Foursquare, and what makes them successful: Gamification.Read more...

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

April 18th, 2012
The POS industry on Monday (April 16) had the most significant announcement in the last 10 years, as Toshiba TEC announced the purchase of the IBM Retail Store Solutions Business. The fact that IBM RSS was for sale was one of the worst kept secrets in the industry among analysts.

Several years ago, when Tom Peterson was general manager of RSS, it was a much larger group than the $1.15 billion in revenue reported in the release. Pretty much everything that wasn't mainframe or core supply chain fit under RSS, writes GuestView Columnist Greg Buzek.Read more...

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

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

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

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

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

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

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

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

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

Costco Self-Checkout Trial Setback After Store Losses

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

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

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

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

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

The Project Every Retailer Needs And No One Wants: Big Data Marketing Automation

March 29th, 2012
Retailers everywhere are finding themselves being hit upside the head with big data. This data is generated by their internal systems, external systems and end customers, and it's growing at exponential rates. Quietly, this trend is going to add a new player to the corporate ranks: the Chief Data Scientist.

Organizationally, these functional experts will challenge the traditional organizational structure. Data scientists will likely enter an organization through the IT group, because that department is most likely to engage their services to help drive value from information mining projects, pens Retail Columnist Todd Michaud.Read more...

Nordstrom IT Lapse Fueled $1.5 Million Fraud

March 22nd, 2012
Nordstrom found itself paying nearly $1.5 million last year in a scam that was ironically made possible because the chain had banned two brothers, and then compounded the problem with what Nordstrom described as "a lapse in communication" with an affiliate. The retailer's system for blacklisting lost-package fraudsters worked fine. So did its system for sending commissions to affiliates. But no one ever realized that the two systems might someday interact. After all, why would a blacklisted fraudster keep trying to order online, knowing the order would always be blocked? How likely was that?

And the thing that made the systems interact was something that Nordstrom's software developers had no control over: the homegrown system that the affiliate site used to handle Nordstrom orders. That's what couldn't be tested until a problem actually showed up.Read more...

Should Retailers Be Worried About Amazon’s Kiva Deal?

March 22nd, 2012

When Amazon on Monday (March 19) announced its $775 million cash deal to buy Kiva, a popular robot automation fulfillment center player, it put many of its existing retail clients in a bind. This includes current Kiva clients—Walgreens and Saks, among others—plus other recent (and possibly current) customers, such as Gap, Crate & Barrel, Staples, Dillard’s, Toys’R’Us and Office Depot. How will all of them feel about systems in their warehouses—which know everything about product flow and, even worse, can control speed, accuracy and efficiency of product flow—being owned and controlled by Amazon, a direct rival? Granted, Amazon would have to be crazy to risk being caught using that information or deliberately slowing down operations. But will the latest technology get shared quickly? Or will Amazon hold onto it for extensive testing in its own warehouses?

And what about the psychological impact of having execs at Walgreens or Toys’R’Us having to write checks to Amazon (or to a Kiva account, fully owned by Amazon)? The devices themselves are impressive little robots, capable of carrying a half-ton of products and knowing where to fetch and where to return. For any sci-fi fans out there, we’re talking about intelligent powerful robots controlled by a corporate empire and working in the inner operations of its rivals. What could possibly go wrong?…

Why TJX Is Really So Skittish About E-Commerce

March 21st, 2012
Is TJX about to re-enter E-Commerce? Depending on your point of view, that event is either a ways off (and certainly not imminent) or it has already happened. Yes, TJX CEO Carol Meyrowitz said last month that the retailer sees a big future in E-Commerce—but she's said that during every earnings call for the past year. And if, as Meyrowitz said, TJX has already assembled its E-Commerce team, what's holding things up?

One answer: Nothing—in fact, TJX has been doing E-Commerce since 2009 in Europe. A different view: TJX really doesn't want to be the next more...

Sears Isn’t Spotting Top Customers At The Door, But Should It Be?

March 14th, 2012
Sears is not using technology to spot loyalty customers walking into some of its stores. On Tuesday (March 12), The Wall Street Journal reported the venerable 2,700-store chain is doing that in its Woodfield Mall store near Chicago. By the next day, the story had been tweaked: The store "might soon" do that. A Sears spokesman was more blunt: "We do not have that functionality," he said.

But Sears clearly wants it—like Neiman Marcus and every other big retailer. The challenge now isn't doing it, but figuring out how it can fit in with what customers expect.Read more...

Wendy’s: POS Upgrade May Help Performance, But We’ll Still Have To Cook The Food

March 8th, 2012
Wendy's plans to finish a long-overdue upgrade to POS systems in all its restaurants by June, after suffering downtime due to poor reliability from aging hardware in some of the chain's 6,600 stores.

That's not a big surprise—POS hardware refreshes happen all the time. It's how the news came to light: a Wall Street analyst who took the opportunity of an earnings call on March 1 to complain that his breakfast at Wendy's took too long because it was freshly cooked.Read more...

New Apple Patent: Transfer Songs Offline, But You Can’t Listen Until The Bill’s Been Paid

March 7th, 2012

Apple was issued a U.S. patent on Tuesday (March 6) for an interesting way to deal with the transfer of copyrighted multimedia content from one device to another. Digital rights management security techniques often do a good job of screwing up the music, video, podcast or book so that the transferred file won’t work. Apple’s technique not only permits security while a Wi-Fi connection is available but enables the file to be transferred when no wireless connection exists, because it puts the file in a locked area. It’s then unlocked once a connection is established.

The patent envisions using a device’s NFC to transfer the file and to then alert the copyright holder, so the recipient can be charged. Once the NFC transfer is complete, “a gift file created using DRM keys associated with the giftee’s account may be downloaded to the giftee device. If a network connection is unavailable, the giftee device may transfer a locked gift file and a corresponding gift license to the giftee device using a peer-to-peer connection. The giftee device may authenticate the license and unlock the gift file once a connection to the online provider is available.” Of course, a thief could still trick the app into thinking that the copyright holder had been contacted when no such contact happened.…


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