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Supply Chain


Bored With Your Current IT Gig? DSW May Be Able To Help

October 28th, 2010
The CIO of $2 billion shoe chain DSW is putting out feelers for a senior retail IT manager, one whose background focuses on applications (not infrastructure), merchandise planning distribution, allocation and logistics.

Background in "store systems would also be interesting" for this position, said DSW CIO Carlos Cherubin. "This is a new position, born of the fact that our organization is growing," he said, referring to its current 210-person IT operation (internal IT staff of 170 plus about 40 IT contractors). "We're a 200-person shop day-to-day," Cherubin said.Read more...


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European E-Commerce Groups Decide To Say What They Mean

October 28th, 2010
With E-Commerce, sometimes it's hard just to figure out what analysts are talking about. Tackling that problem, the U.K.-based E-Commerce trade group IMRG last Friday (Oct. 22) announced a new E-Commerce measurement standard that's being supported by similar groups in Germany, France and Belgium. The Global B2C E-Commerce Measurement Standard (GEMS) sounds impressive, but the "standard" actually consists of definitions of 10 terms (including "e-retail," "shopping," "payment" and "a week"), along with 22 retail categories that the groups count as E-Commerce and another 10 that the groups exclude.

It's hard to imagine a better illustration of how far behind the curve everyone is when it comes to tracking E-Commerce. The industry is literally still deciding what words mean. Yes, it's helpful to have consistent terms for trade groups and analysts across Europe to use, so no one has to guess whether E-Commerce is supposed to include gardening supplies (yes) or online gambling (no). But at this rate, it's going to be a while before everyone in European E-Commerce is speaking the same language.Read more...


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Best Buy’s New Stealth Channel

October 14th, 2010
Best Buy, along with just about every other major chain, has been focusing lately on pushing its brand in every channel it can think of, from mobile to E-Commerce to social networks. But Best Buy on Tuesday (Oct. 12) made public its moves in a channel where its brand is all but invisible. The new Stealth Channel is letting all kinds of other firms use the chain's APIs to allow Best Buy purchases with no Best Buy brand visible.

At first glance, the Best Buy Commerce API program doesn't look that different from its earlier API efforts or from API moves by other chains. And even Best Buy's official line about the program—"we'll connect with customers wherever they are"—has a deeply innocuous element. But there's much more to it.Read more...


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Patent Says How To Improve RFID Read Rates: Turn Off Those Scanners!

October 14th, 2010

It’s hard enough to track inventory using RFID tags; read rates are low enough that tags are often misread the first time. It’s even worse in a warehouse, where multiple RFID readers can interfere with each other. The Patent Office is offering one of those good news/bad news scenarios. Good News: A university patent claims to dramatically improve RFID read rates, which sounds like a huge advantage for retailers trying to manage inventory. Bad News: The patented technique cuts interference by automatically shutting down all RFID readers in the area except one.

That makes this approach useless if inventory employees are using handheld scanners. On the other hand, it could still work for warehouse areas with fixed RFID scanners that automatically check inventory. Rapidly turning all those scanners on and off could especially help with frozen or liquid items, where signals are particularly hard to detect, according to inventor Jagannathan Sarangapani of the Missouri University of Science and Technology. But how well the technique actually works in the real world is unknown; no RFID vendor has yet licensed the patent.…


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Wal-Mart Using FedEx As Extension Of Its Stores

October 14th, 2010
Wal-Mart, the 8,000-pound gorilla in retail with 4,300 U.S. stores, finds itself in an awkward position in many urban areas—its stores are few, and resistance is strong. One of Wal-Mart's more creative responses to this problem was rolled out Wednesday (Oct. 13): Give E-Commerce customers free shipping (no minimum required) and let them pick up the order at a local FedEx office, which in an urban area is probably a lot closer than a Wal-Mart store.

The program, called FedEx Site to Store (every so often, marketers throw us a curve and go for WYSIWYG naming. PayPal did something similar last week), has been piloted by Wal-Mart for months in Los Angeles and Boston, and this new move sharply expands the trial to New York, San Francisco, Chicago and Washington, D.C.Read more...


Best Buy Improves Its Pick-Up Line

September 30th, 2010
Prepping for the holiday season, Best Buy has tried polishing its pick-up options. It has made some interesting improvements—such as no longer requiring customers to pick up purchases personally—but the chain might want to consider rephrasing some of its enhancements.

For example, Best Buy's new promise for the buy-online-pick-up-instore option is that the order will be ready "in as little as 45 minutes after placing it."

Despite one prominent retail media outlet reporting that the pledge was a guarantee of product availability in fewer than 45 minutes, Best Buy's pledge is actually the opposite. It promises that an order will not be ready in 44 or fewer minutes. Guaranteed! Might be as few as 45. Could be 3 hours. But it absolutely, positively, won't be fewer than 45 minutes.Read more...


StorefrontBacktalk Now On Kindle

September 30th, 2010

The next time you’re stuck on an airplane with just your Kindle and you want to know what other retailers are working on to make your life miserable when you land, fear not. StorefrontBacktalk is now available as native content on Kindle.

It goes beyond the headlines, and the Kindle supposedly updates this content when you’re near a connection so you can read it when you’re not. (I have to trust my Kindle-carrying colleagues to tell me how our content looks. Personally, if something can’t give me a paper cut while reading it, why bother?)…


Nordstrom Merges Online And In-Store Inventory

August 24th, 2010

Nordstrom might be the last retailer you’d expect to worry about slugging it out with competitors online for customer service. The tony $8.6 billion chain also doesn’t have a reputation for tech wizardry. But when Nordstrom unveiled its redesigned Web site last Saturday (Aug. 21), it also spotlighted a feature that the retailer quietly began offering in September 2009: merged online and in-store inventory systems. As a result, a customer buying through any Nordstrom channel has access to products that happen to be in any store or online warehouse.

That fully merged-channel inventory system took four years of work to become a reality, according to Nordstrom spokesman Colin Johnson. The process started with breaking down organizational silos and laying the foundation, then moved to creating a single view of inventory and finally layered the brick-and-mortar store inventory view on top of the online inventory system. That explains why multichannel commerce seems like such a slow slog for most retailers today: It really does take years. Considering that Nordstrom’s in-store approach of pampering customers can’t be replicated online, the retailer was wise to start the march early–and arrive first.…


Mobile RFID Reader Shortage?

August 23rd, 2010

Everywhere else in the world, the cliché is “When it rains, it pours.” But for retailers now focusing on RFID projects, a more apt phrase would be “When it rains, it’s a drought.” That’s because a major financial investment firm is reporting a sharp mobile RFID reader shortage. The cause: lots of RFID projects, with Wal-Mart’s 20,000-unit-order leading the way.

The report comes from investment firm Robert W. Baird & Co., according to SupplyChainDigest. Beyond Wal-Mart, the reasons cited were “supply constraints that have lasted for months in basic electrical components that have caused delivery problems in a wide number of high tech gear, including mobile devices”; a 23,000-customer order from a European logistics company; and the recent leap in popularity of mobile–versus fixed–RFID readers. “A quick check at ScanSource, a distributor that sells exclusively to other resellers and VARs, showed about half of the models of Motorola 9090-G mobile RFID terminals were in-stock, and the other half showing as ‘call for availability,'” the story said. RFID: Can’t live with it, can’t live without it.…


The Dumbest Wireless Security Errors

August 19th, 2010
For years, chief security officers have viewed wireless security as a contradiction-in-terms punchline. But with PCI rules clamping down and cyberthieves sniffing around for whatever holes they can find, wireless security has stopped being funny. Still, either through ignorance or carelessness, many retailers have been caught doing some pretty ridiculous things when deploying wireless security.

From a gas-station chain that tested security by calling the attendants to ask if rogue devices were attached to a grocery chain that tried to scare off hackers by using extra-long SSIDs, AirTight Networks' Anthony Paladino has seen more than a few absurdities in his efforts to plug wireless leaks. He talked about them in the first of two StorefrontBacktalk podcasts on worst practices in wireless security. To listen to the podcast, please click here.Read more...


RFID: Combining Low Read Rates With Cyberthief-Friendly Long-Distance Accessibility

August 5th, 2010

Among the more fascinating tidbits to come out of the Black Hat/Defcon show in Las Vegas last week was a demonstration that an RFID tag could be read from 217 feet away. The tester used two large antennas and ham radio equipment, reported Dark Reading

But retailers have been discovering the ability to monitor RFID at very long distances for years. That’s the irony of RFID. How can something with such low read-rates at a distance of two inches—when you absolutely need it to be read—also be readable by a corporate spy across the parking lot? Admit it: Technology (and cats, by the way) not so secretly wants us all to fail.…


Wal-Mart’s Item-Level Strategy: Better That Tags Should Be Thrown Out Than Dealt With

July 29th, 2010
When Wal-Mart this week confirmed it has been quietly testing item-level RFID in two Arkansas stores for several months—along with plans to "incrementally roll out [item-level RFID] throughout the chain"—it raised quite a few eyebrows because of the way it's being done. The company is initially only tagging denim jeans, socks and underwear (let's try and ignore the fact that a radio transmitter inside a guy's boxers is nothing shy of creepy), and it's leaving the tags active until customers opt to throw them away.

The reality is that Wal-Mart's gradual deployment makes a lot of sense. The media-repeated cries of privacy invasion are simply silly, based on ludicrously unrealistic assumptions of how easy this data would be to access, assuming anyone had any reason to even try. The most interesting part of the rollout, though, is the tag disposal question.Read more...


GuestView: Wal-Mart Was Wrong To Initially Just Tag Pallets

July 29th, 2010
When Wal-Mart this week confirmed its limited launch of item-level RFID tags, it shouldn't have been news to many in retail. That's what Wal-Mart has said it wanted to do for literally 10 years. The question shouldn't be "Why is Wal-Mart doing this?" as much as "What's different this time? Why is this finally happening now?"

Franz Dill spent 30 years in various technology management roles at Procter & Gamble, the world's largest consumer goods manufacturer, much of it dealing with retail technology concerns. Now two years off of the P&G payroll, he tries to put the new Wal-Mart item-level RFID move into context in this GuestView column. Read more...


Information Supply Chain, What It Is And Why You Need To Start Talking About It

July 27th, 2010
Make no mistake, the number-one challenge IT teams will be faced with over the next five years is helping their business partners extract meaningful information from the yottabytes of data being shoved into their archives. And when Franchisee Columnist Todd Michaud uses the term "meaningful information," he defines it as information used to create action.

We are at the dawn of an age where great companies will figure out how to successfully combine operational, marketing, customer service and social media data sources into systems and tools that enable the business. These firms need to clearly define their Information Supply Chain. Companies that don't figure it out will be left out in the cold.Read more...


JCPenney’s Destroyed Products Have To Count For Something

July 11th, 2010

How do inventory systems handle items that employees are required to intentionally destroy? That’s the problem for JCPenney, which, it turns out, is contractually obligated to throw out unsold merchandise from its American Living brand. The requirement has been part of the retailer’s deal with Polo Ralph Lauren, which designed the products, and was presumably created so the pricey products wouldn’t end up with discounters, thereby devaluing the brand. (The retailer now says the deal will be changed so unsold merchandise can be donated or liquidated, which is standard practice.)

But that leaves open the question of how a retailer’s inventory systems are supposed to deal with such oddball requirements. Every retailer deals with inventory losses: Grocers have spoiled chickens; bookstores have damaged paperbacks; and everyone has theft. Although it all gets rolled up on the balance sheet as lost inventory, accountants like to know exactly what happened. Spoiled? Stolen? Damaged? Intentionally destroyed? No matter what it is, IT better have a transaction code. Just remember, whenever a retailer cuts a supplier deal with unusual conditions, sooner or later someone in IT will have to sort it out.


An Ice Cream Vending Machine That Literally Takes A Smile As Tender

June 24th, 2010
Even for an ice cream story, you can't get much more saccharin than this: A Unilever-backed vending machine that literally takes consumer smiles as payment for its product. Well, a smile plus a photo marketing release form coupled with a biometric guess of the consumer's age and gender.

Unilever, the $49 billion ice cream giant—the world's largest ice cream company, which owns brands including Ben & Jerry’s, Good Humor, Breyers, Klondike and Wall's—is testing an ice cream machine in Lisbon (Portugal), Singapore and Paris (a U.K. location is imminent) that asks customers to smile. The machine even uses a shock sensor, constantly captured video and high-speed wireless connections to defend itself against theft attempts.Read more...


Now On StorefrontBacktalk: One-click Print Formatting, Automatic URLs

June 15th, 2010

Starting this week, each StorefrontBacktalk article has two new features. First, in response to many reader requests, we have now added a print function for each article. Just click on the Print icon (right across from the article’s date) to generate a web page formatted for printing, without page breaks, sidebars or reader comments.

Second, we now automatically add a URL to any content that you copy and paste from an article. Yes, it’s a feature: Instead of copying an entire article to send to someone, now you can copy just the most relevant part and paste it into a message; the URL for the full article is included at no extra charge. Tipping, of course, is always encouraged.…


The M-Commerce Paradox: If You Succeed, You’ll Fail

June 10th, 2010
After we ran a story in the last issue about some Mobile-Commerce experiments at Macy's and Best Buy, one retail exec at a very large chain who has worked extensively with mobile expressed skepticism that some of these projects would ever work at full scale.

"I wonder when people will realize that mobile devices communicate via, ummm, radio?" asked the IT exec. "And that microwave radio signals (which GPS, mobile phones and microwave ovens all use) don‘t transit solid surfaces, especially conductive ones like metal mall roofs, all that well? And that carriers make no promises relative to in-building coverage (and virtually no promises relative to out-of-building coverage)? And the U.S. government makes no promises at all relative to GPS signal penetration or even availability?"Read more...


E-Tailers Crash Because Of Outsource Decision

June 10th, 2010
This month, we saw two reminders of the dangers of E-Commerce outsourcing. Word came down last week that dozens of E-tailers crashed when long-time Mobile-Commerce technology provider mPoria evaporated. We also learned last week that some 200,000 customers—including an unspecified number of retailers—of Digital River lost their customer information, the unfortunate byproduct of an affiliated marketing program.

Outsourcing is a great way to get into a new technology, because someone else has already made the investment, built the infrastructure and collected the necessary expertise. As a retailer, you don't have to reinvent that particular wheel?just pick the right outsourcer for the job. But you can't assume that the outsourcing deal will last forever, or even that you can trust it just to keep doing what you need.Read more...


Alibaba’s China-Japan Portal: Is This The Way To Cross Borders?

June 3rd, 2010
Think about the effort you put into dealing with the problems of doing business between countries in North America—the U.S., Canada and Mexico. What if all those challenges could be addressed by something besides your own IT shop?

This week, China's Alibaba Group opened up a two-way e-tail portal between mainland China and Japan. Alibaba's goal is to make cross-border sales to consumers easy enough for tiny retailers who can't afford all that cost and effort. But the China-Japan portal may also be a model for big retailers to do the same thing.Read more...


Technical Debt Is Destroying IT

June 2nd, 2010
A disease in this country is slowly destroying businesses from the inside out. Often misdiagnosed, symptoms of this devastating virus can be found in 95 out of 100 companies. This disease is called "Technical Debt," and it's the primary cause of IT failures in the last two decades, pens Franchisee Columnist Todd Michaud.

Put simply, Technical Debt is any technology decision that has a long-term negative impact on the business. Although it would seem obvious that companies would want to avoid accumulating Technical Debt, Michaud argues that, in some businesses, as many as 8 out of 10 technology decisions carry some level of Technical Debt. As Technical Debt accumulates, the results can be devastating.Read more...


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...


Supplier Suicides: The Apple Moral Responsibility

May 26th, 2010
Sometimes, the reports from overseas are so staggering that they're hard to internalize. When a Chinese employee of the Apple-supplier Foxconn Technology Group on Tuesday (May 25) became the 11th employee to attempt suicide this year and the ninth who was successful. That's stunning enough.

But now comes news of this unusual response from the plant's management. The Guangzhou-based Southern Metropolis Daily newspaper is reporting workers are being required to sign letters promising they won't kill themselves and agreeing to be institutionalized if management thinks it's needed. The employee who died, Li Hai, was 19 years old when he killed himself. That's the exact age of Steve Jobs' son. There's a lot more at stake here than a lower-cost iPhone.Read more...


Are Negative IT People More Successful At Delivering Results?

May 17th, 2010
Franchisee Columnist Todd Michaud had a meeting Tuesday (May 18) with several internal department leaders and a vendor, discussing a store technology conversion for one of his company's brands. About half way through the meeting, he asked his operations counterparts what the minimum number of stores participating in the program would be for them to launch. One of the department heads looked at him and said, "Why are you being so negative and talking about minimum participation? We will work hard and get this done. It's that simple."

The statement caught Michaud a bit off guard, and it made him realize exactly how negative the group sounded about the entire project. In fact, his team had spent a good part of the meeting talking about risks and planning for contingencies. Read more...


Consumers To Sue Safeway For Not Using CRM Data For Recalls

May 6th, 2010
Spurred on by the efforts of Costco, ShopRite, Wegman's and other grocery chains to use CRM data to alert customers to product recalls, a consumer group said Thursday (May 6) it is about to sue the $41 billion 1,712-store Safeway chain because of the its "failure to notify consumers that they've bought potentially dangerous products [which] violates state consumer protection laws in Texas, the District of Columbia, New Jersey and California."

The trend to use loyalty card data for product recalls is nothing new. Much of the motivation stems from a lawsuit against Kroger a half-dozen years ago, where a Kroger's customer ate beef contaminated with Mad Cow disease even though the chain supposedly had more than enough time to have alerted her before she consumed the tainted product.Read more...


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