Will Warranty Enforcement Be Amazon Marketplace's Achilles' Heel?

When it comes to competing against Amazon, eBay or even Japan's Rakuten, one of the more challenging aspects is their third-party marketplaces, which give each a seemingly endless inventory at minimal risk. But the odds may be getting more even, as shoppers are starting to notice that some manufacturers are strictly enforcing their authorized reseller rules.

The immediate impact on shoppers is they may find that the expensive flat-screen TV, surround-sound speakers or refrigerator that looked like such a bargain on Amazon voids the warranty. The arguably-unrealistic expectation from consumer goods manufacturers—which sharply strengthens the hands of traditional e-tailers trying to fight against these third-party marketplaces—is that shoppers would not only notice the actual name of the merchant shipping the item, but would take the time to run that name on the manufacturer's site to see if they are truly an authorized reseller. Or they could just make the purchase from or and know for certain.

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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...


SAP VP Caught Doing Very Original Research On Retail Security: Barcode-Swapping At Target

May 23rd, 2012
When an SAP Labs VP was arrested this week—charged with multiple burglary counts for supposedly sticking fake barcodes on Lego sets in California Target stores—it was a wonderful reminder of how vulnerable today's barcode security is.

On the down side: Police said they found "hundreds of unopened boxes of Legos" at the VP's home, strongly suggesting that he had had considerable success using switched barcodes. On the plus side: Target's loss prevention team coordinated with various stores and shared pictures of the VP, enabling him to be identified and followed before a barcode swap.Read more...


A Web PIN Pad That Changes GUI For Each Customer’s Card. Will That Make Shoppers Use It?

May 23rd, 2012
Here's an interesting interchange-fueled conundrum: How do retailers get consumers to enter their debit-card PINs online, a move that saves the retailers money but doesn't directly help the consumers at all?

One vendor is arguing that by visually making the screen image look identical to whatever card shoppers are using, the shoppers will be more inclined to enter their PIN. The company has added a nice security twist: rotating the key position so anyone sniffing the communication—or using keygrabbers or spyware—can't easily determine the numbers entered. But that twist has its own twist: By scrambling the number positions with each click, some consumers will take a lot more time to enter their PIN, because they have memorized it based on the ATM, retail in-store and computer keypads they are used to.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...


With Massachusetts’ Blessing, All States Prepare To End Item Price Labels. It Begs The Question: What Will Price Mean?

May 23rd, 2012
Legislatures first enacted requirements that grocery stores and other retailers individually price items because they simply didn't trust the barcode and other price-scanning technology. But now, argues Legal Columnist Mark Rasch, the government doesn't trust the retailers.

What is the "price" of an item? New technologies enable the prices charged, and the display of those prices, to change instantly. Ask anyone trying to purchase a plane ticket from New York to Detroit what the "price" of that ticket is. Read more...

ISIS Launches Trial With Significantly Fewer Retailers Than Planned

May 17th, 2012
ISIS has finally named retail names for its mobile-wallet trial this summer in Salt Lake City and Austin. On Tuesday (May 15), the mobile-operator consortium announced that some (but not necessarily all) area Macy's, Dillard's, Foot Locker, Champs Sports, Aeropostale and Jamba Juice stores will be accepting mobile payments during the ISIS trial, along with 19 local merchants in Austin and 29 more in Salt Lake City.

That's not a bad turnout for a normal technology trial. But ISIS is promising just hundreds of locations in cities with a total population of nearly a million—and considering the weak consumer response so far to mobile wallets, anything less than an overwhelming assault may already be doomed.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...

The Delicate Legal, Ethical Dance Of Selling To Children

May 16th, 2012
Here's one for the marketing ethicists out there (is "ethical marketing" an oxymoron?): 18-year-olds come into the retail CRM world as clean slates, even if they have been active E-Commerce and M-Commerce shoppers for eight or nine years. It is illegal to solicit or sell data about children younger than 13—and what can be collected and used about those aged 13 to 17 is highly restricted. When that veteran shopper turns 18, though, can all of his or her juvenile shopping history be sold or even used?

One online payment vendor is preparing to sell tons of youth purchase data—apparently, this is the first time anyone has tried—avoiding immediate legal problems by offering the data in aggregate.Read more...

Doing Online Fulfillment In-Store Is Harder Than Macy’s Thought

May 16th, 2012
Macy's efforts to move online order fulfillment into almost 300 of its stores this year got a look from the Wall Street Journal on Monday (May 14), and the result wasn't pretty: The Journal described the in-store Macy's distribution center in a Paramus, N.J., mall as "a dimly-lit, makeshift packing area" and said workers struggled to find merchandise in the store that exactly matched orders specifying colors like "journey" and "magical." Amazon this ain't.

The irony is that Macy's may already have the answer to its product-finding problem—by leveraging a completely different in-store IT initiative.Read more...

IKEA’s Online Inventory Problem: It’s Here, But You Can’t Have It

May 16th, 2012
Right before the 2011 holiday season went into ultra-intense mode (in November), IKEA Canada made a key change to its mobile and E-Commerce product availability system. Like many warehouse operations, IKEA crams an awful lot of merchandise into its stores, with much of it dozens of feet in the air, accessible only via forklift.

Under the old system, the site would tell customers that an item was in-store when it was at that store, not differentiating between a product at a lower level and one at a higher level. The problem: Because IKEA safety procedures prohibit forklifts from being used when customers are in the store, customers would come in to purchase their reserved sofa or table, only to be told that it can't be accessed and that they must return some other day.Read more...

Do In-Store Sales Just Move Online? It’s Never That Simple

May 16th, 2012
Is online-versus-in-store a zero-sum game? Retailers with E-Commerce experience know the answer, but financial analysts have a different view. In a report this month on online retailing, Citi hits the points you'd expect: Showrooming is bad; "omnichannel" is good. But one of the report's "questions that remain" will likely raise your blood pressure: If, say, 12 percent of your sales are now online, "does that mean that bricks and mortar retailers need 12 percent fewer stores?"

It's a question that makes perfect sense to stock watchers—but it completely misunderstands how merged-channel retail works.Read more...

Will A Store-And-Forward In-Store Mobile Tactic Work?

May 16th, 2012
What if having wireless in-store access isn't really that important? Retailers' efforts to make sure customers have constant Wi-Fi access—to fuel mobile functions such as barcode scanning, demo watching and, potentially, even mobile wallet efforts—has certainly proven problematic, whether the reasons are wireless-unfriendly old buildings or young shoppers gulping all of the bandwidth with movies or games.

Beyond encouraging shoppers to use over-the-air access that chains need do nothing to facilitate, what if apps used the mobile device's memory to play those demos and to look up those barcodes, and then waited to update until the device was reconnected? Shopkick is using one version of this modified store-and-forward mobile strategy, as of an update deployed last month.Read more...

Yes, Virginia, We Really Do Need A QIR Program

May 16th, 2012
Integrators and resellers seem to be resisting a program that would provide stronger enforcement over, well, integrators and resellers. PCI Council General Manager Bob Russo talked with PCI Columnist Walter Conway about the resistance (the program is "sorely needed"), the pricing and the nature of the training. And given the number of industry insiders Russo worked with to create the program, he bristled at the suggestion that the Council worked in a vacuum on this one.

Russo said the training will be an online course so nobody should have to travel, Conway writes.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.…

How Often Do Retail App Users Refer Friends? The Stats Tell Two Stories

May 10th, 2012
ABI Research on Tuesday (May 8) published a survey that found that 45 percent of smartphone users who have downloaded the retail-branded app of a chain visit that brand's store more often. But it's the drilldown behind those stats that is particularly interesting. To start with, it's not merely a self-limiting sample. Rather, it's the universe of shoppers who download, say, the Lowe's app, and who are likely to already be huge fans of that brand.

The most striking thing about those stats is that they are less than 50 percent. That means the opposite it also true; namely, that 54.2 percent of that chain's biggest fans do not find that the app makes them go to the store more.Read more...

JCPenney Dumps Associate Sales Commissions

May 10th, 2012
As JCPenney continues to recover from its self-inflicted nice-price-all-the-time effort, the chain's latest cost-cutting move came this week when it quietly killed associate commissions and cut back many of their hours. Cost-cutting is fine, but killing commissions right now—as it desperately tries to fight off E-tail incursions in its stores—seems stunningly ill-advised.

As retailers complain about showrooming—and its posterchild, Amazon—the only meaningful way to fight back is to make the store experience so pleasant, efficient and fun that consumers would much prefer to shop than click away on a phone, tablet or laptop.Read more...

MasterCard Aims To Take Mobile Wallet Rivals Apart

May 9th, 2012
What Google, PayPal and ISIS are trying to assemble in mobile payments, MasterCard wants to dismember. On Monday (May 7), the number-two payment-card brand unveiled a mobile wallet and an E-Commerce payment system that are designed to cut out any middlemen horning in between customers and retailers and payment networks.

Ironically, while MasterCard's PayPass Wallet for NFC-equipped phones got most of the attention, that's still largely a pipe dream—MasterCard hasn't even talked any mobile operators into giving it access to the NFC chip. But the online payments effort will offer tokenization to reduce PCI scope for E-Commerce. The bad news: You can probably forget about any interchange relief.Read more...

Peapod’s QR Train Station Grocery Trial Shows Mobile Bias

May 9th, 2012
In a series of mobile trials in subway and train stations in Philadelphia and Chicago, online grocer Peapod has been trying to drive sales of milk, diapers and dog food to commuters with a few minutes on—and a smartphone in—their hands. The trials had to deal with mobile technologies with a very uncertain future—such as QR codes—and the frustrating logistics of demoing in cramped public transportation centers.

Peapod got the idea from a wildly successful mobile QR trial that Tesco did in South Korean subways. Peapod's attempt is apparently the first to try and replicate the Tesco efforts in the U.S.Read more...

Disney’s RFID iPad Trial Is An Important Lesson When Battling Showrooming

May 9th, 2012

As E-tailers continue their incursions into rivals’ physical stores, the only viable defense is to radically upgrade customer service and the overall store experience. Two of the retailers most known for this are Apple and Walt Disney World Resort. Have you ever heard of an E-Commerce site cutting into the revenue at Disney? What specific tactics can brick-and-mortars steal? Here’s a good one: Disney this month is experimenting with an RFID/iPad combo to upgrade its famous FastPass system—for letting people reserve tickets/times and thereby get much faster access to rides and events. As Disney employees carry iPads, customers’ RFID bracelets will interact with CRM and ride information.

It’s fair to argue that Disney has always been the retail exception. It pushed contactless payment by offering deep discounts, and Disney even successfully got customers to use digital biometrics (fingerprints) for park access. But that’s just the point. With a heavy enough emphasis on experience and customer service, shoppers are willing to do almost anything, including—just perhaps—forgetting all about Amazon.…

Reusable Shopping Bags Traced To Girls’ Soccer Team Illnesses

May 9th, 2012

Sometimes, we have to wonder how any customers medically survive grocery trips. We’ve reported on germ-laden shopping carts and paper POS receipts loaded with the carcinogen BPA. Late on Wednesday (May 9) came word that one of the nastiest bugs around—the norovirus—infected an Oregon girls’ soccer team and that it was traced to a reusable grocery bag the girls passed around as they shared cookies.

“The latest outbreak of norovirus reinforces the research we have conducted about the propensity of reusable grocery bags to act as hosts for dangerous foodborne bacteria and viruses,” said Dr. Charles Gerba, a microbiologist and professor in the Departments of Soil, Water and Environmental Science at the University of Arizona. “This incident should serve as a warning bell: permitting shoppers to bring unwashed reusable bags into grocery and retail stores not only poses a health risk to baggers but also to the next shoppers in the checkout line.” The scenario isn’t so far-fetched. All it takes is a bag with raw chicken that leaks—or an egg that cracks—and the bag becomes highly contaminated. It then leaves those contaminants on the conveyor belt, which it shares with the bananas being purchased by the next customer. A good hot water washing with a lot of bleach should remove the hazard, but how many shoppers even think to try?…

Best Buy Facebook “Joke” Points Out The Risks Of Handling Smartphone Repairs

May 9th, 2012
Corporate data security policies have always been a challenge. In recent years, thumbdrives, corporate telecommuting and smartphones have made such controls problematic. But the assumption has always been that the data being protected was on the hard-disks or RAM of various systems.

A Best Buy incident this month, however, is a grim reminder that saved passwords or tokens can expose employees to sensitive data—and capabilities—far beyond the bits and bytes of that device.Read more...

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...

Level 3 PCI Compliance Increases Slightly, Even As Its Population Grows

May 9th, 2012
The latest PCI compliance stats—out this week—show trivial changes from the prior report, with Level 2 and Level 3 retailers slightly increasing compliance. Level 2 went from 91 percent at the end of December 2011 to 92 percent as of March 31, 2012, and Level 3 also increased by 1 percent, from 58 percent to 59 percent.

With changes as small as 1 percent, it's hard to determine what, if anything, caused the change. The number of Level 2s dropped slightly (from 1,066 to 1,060), so it's possible a couple of the chains that left might have had compliance issues.Read more...

P2PE: No Cakewalk for Merchants, But There May Be No Alternative For Reducing Scope

May 9th, 2012
When the PCI Council released version 1.1 of its Point-to-Point Encryption (P2PE) Testing Procedures late last month (April 27), it forced an interesting question: Will P2PE be the only way to remove encrypted data from a merchant's PCI scope?

Writes PCI Columnist Walter Conway: Current PCI Council guidance (FAQ 10359) holds that encrypted data can be out of a merchant's PCI scope "if, and only if, it has been validated that the entity that possesses encrypted cardholder data does not have the means to decrypt it." The important word here is "entity." That is, the ability to decrypt the data must rest with some unrelated third party. With the emergence of P2PE, could this scoping guidance be revised to where the only appropriate "entity" is an approved P2PE provider?Read more...


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