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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 Target.com or Bestbuy.com and know for certain.

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Whole Foods: We Don’t Need No Stinkin’ Data

October 26th, 2011

Here’s an IT twist: The $9 billion Whole Foods Market grocery chain is pulling back from accepting checks primarily because it wants to collect less customer data. Making this move even more unusual is that checks—along with cash—have a much higher margin than payment cards due to a delicious absence of interchange.

“We simply don’t want the burden of having all that information,” said Whole Foods spokesperson Libba Letton, adding that it’s the same reason the chain has thus far shunned any type of CRM/loyalty program. That said, there are other more mundane reasons for the 300-store 38-state chain’s rejection of checks, added Letton: “It takes too long, and the financial impact of check fraud.” Also, there’s the fact that the number of consumers using checks at grocery stores is plummeting, so why keep associates trained on something that is so rarely used? Still, the idea of a chain choosing to prematurely halt an interchange-free system that brings in lots of customer data, that’s an unusual kettle of organic steamed fish.…


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The New Face Of Asian M-Commerce: Android Sells Five Times As Many Phones In 2011 As In 2010

October 26th, 2011

Mobile-commerce sites, take note: Android phones are now outselling all other smartphones in Asia. On October 20, ABI Research reported that in 2011, Android will represent 52 percent of smartphones sold in Asian markets, up from 16 percent last year. (Combined with the 56 percent increase in Asian smartphone sales that ABI reported, that means a stunning five times as many Asian Android phones sold in 2011 as in 2010.) ABI also reported on Monday (Oct. 24) that, worldwide, downloads of Android apps now outpace those for the iPhone by 44 to 31 percent, although Apple users still download twice as many apps per phone.

That doesn’t mean iPhone use has fallen off a cliff—many of those Androids are likely lower-priced phones that are being snapped up by customers who can’t afford Apple’s price tag. But it does mean large numbers of M-Commerce customers will be using Android phones. That could actually make life easier for M-Commerce developers: With the market mainly split between spendthrift iPhone customers and more numerous cheapskate Android users, developers can decide who they want to target and how to make their mobile sites work well with either group—or both.…


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Name Nightmare: New Vanity Domains Could Cost Retailers Millions, NRF Says

October 26th, 2011
Ready to pour $185,000 into nailing down your E-Commerce site's domain name all over again? Starting in January 2012, retailers will be able to apply for new top-level domains (TLDs) that will give them Internet addresses that end with their brand—.macys instead of macys.com, for example. But on October 21, the National Retail Federation (NRF) sent a letter to the U.S. Commerce Department asking that the department delay implementation of the new TLD land grab until lots of questions about the process are cleared up.

That could take a while. No one—including ICANN, the body that handles new TLD names—knows how many retailers, manufacturers, cities, organizations or other entities will apply for their own TLDs, or how long the approval process will take (estimates range from seven months to years), or whether there will ever be another chance to buy up vanity domains. What is clear is that it's going to be expensive—even for retailers who decide not to pop for the chance to slice .com off the end of their E-Commerce site's address.Read more...


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During A Data Breach, Customers Will Stay—Unless You Alienate Them One At A Time

October 26th, 2011
With all of the legal wrangling in the wake of the Hannaford data-breach appellate decision over who has to pay for what "damages" or "loss," and to whom, one thing is lost. With today's breach-apathetic American consumers, a multibillion-dollar breach will not likely cause merchants to lose any customers. When one of those impacted customers calls and asks for a replacement card and you say "$20, please," that's when you'll lose that customer.

The appellate decision clarified the legal environment, but it merely said what self-interested chains should have been doing all along, pens Legal Columnist Mark Rasch. From a merchant, vendor, supplier or technology consultants' standpoint, the goals remain the same: Prevent the breach in the first place, and do what is reasonably necessary to control or mitigate the harm if a breach occurs.Read more...


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Federal Appeals Court To Retailers: In A Breach, Pay For The Damn Replacement Card. And Buy Some Insurance, Too

October 26th, 2011
A federal appellate panel, reviewing some of the data-breach lawsuits against Hannaford, has dealt a very narrow setback to retailers, ruling that consumers can be entitled to identify-theft insurance and replacement payment cards. The fact that such an extremely limited support for consumer rights can even be seen as a setback for retailers puts into context how incredibly retail-friendly federal courts have consistently been in various data-breach rulings.

There are two likely near-term impacts from the ruling. First, Hannaford itself will now have this case return to an active trial status, where it will likely reside for an absurdly short of time before it's settled for the very small number of dollars that such an insurance policy and card replacements (for just a few customers) will cost. For retailers throughout the country, though, the impact will be more muted.Read more...


Vote Now: Why Retailers Really Should Help Select PCI SIGs

October 26th, 2011
PCI Columnist Walter Conway argues that this is a good week for every retailer's IT, security and business departments, because they will have a relatively rare chance to sharply influence PCI issues. The PCI Council's Special Interest Group (SIG) nominees for the coming year are coming up, and these folks have a key vote. The reason is that the Council has a short list of seven proposed SIGs, only three of which will be selected. Which three are chosen is solely based on the votes of Participating Organizations. Retailers will make their voices heard by voting for their three top choices. Whichever nominees the Participating Organizations decide to support with their votes, it will need to be done quickly: Online voting starts this week and ends November 4.

There are two changes to the SIGs this year. One change is that a Council staffer will lead the SIG (previously, the chair was a member of the PCI Council's Board of Advisors). The other change is that each SIG must complete its work in one year. In years past, SIGs could—and sometimes did—run indefinitely, becoming a source of frustration for everyone. The changes should mean each SIG is focused on delivering results. Read more...


Amazon’s Bezos Pushed A Platform. Should You?

October 19th, 2011
A Google engineer's accidentally published rant on October 12 made headlines because he ripped into Google's hottest new property, calling Google+ "a knee-jerk reaction, a study in short-term thinking" and "a pathetic afterthought." But ironically, that's the least interesting thing Googlista Steve Yegge had to say—and his real point has serious implications for retailers.

That crucial point, buried in Yegge's 4,800-word rant: Google (just like most retail chains) has built a company on top of a collection of applications. Amazon (where Yegge worked for six years) has built its enormous E-Commerce success because it is not just a bundle of retail applications. It's a platform that lets customers interact, outside retailers sell and other third parties connect. But Amazon didn't start that way. And how it made the transition should have retail chains thinking hard about whether that's the right approach for them, too.Read more...


Want To Cut Shrink By 20 Percent? Forget LP, Fix Your Systems

October 19th, 2011

Shoplifters and employees who steal are classic in-store loss-prevention problems, but fully one-fifth of shrink is due to administrative errors and supplier fraud—things that LP isn’t designed for but that conventional IT should be a lot better at dealing with. According to the annual “Global Retail Theft Barometer” report out this week from the Centre for Retail Research in the U.K., about 20 percent of shrink worldwide is due to administrative errors (including “pricing mistakes, accounting errors and process failures,” the report says) and fraud or errors by suppliers.

That’s a huge chunk of loss that should be fixable with nothing but better automation. The other 80 percent is predictably split between external and internal theft, though that split varies widely: In the U.S. it’s 36 percent shoplifters and 44 percent employees, while worldwide that’s flipped: 43 percent shoplifting and 35 percent internal theft. But using IT to cut administrative-error shrink has at least one big advantage over Loss Prevention: Those errors aren’t working hard to hide themselves. And if you can use better systems to cut admin-error shrink in half, that’s roughly as good as catching a quarter of your shoplifters.


Amazon Accused Of Taking Payment Verification Data And Using It To Access Public Records

October 19th, 2011
In the middle of a strange lawsuit against Amazon.com—one where an actress is suing because she says Amazon revealed her correct age—is a very serious payment-card IT accusation: that Amazon processed a payment and then used the card-verification data to gather more data and then published it. To be fair, the lawsuit itself is a dubious document, with some statements that seem clearly false and others that seem to not recognize how Amazon and its Internet Movie Database unit (IMDb.com) function. But setting aside those issues—which certainly raise questions about the validity of the Amazon accusations—the charges bring up an interesting issue.

Is it illegal, or even against the various card brand rules or PCI's rules, to use information from the confirmation process to access public information and to then use it? Amazon is not accused of publishing the verification data directly (which would have raised very different issues) but of using that data to track down public records. And if Amazon indeed did that—and that's still a big "if"—is that a legitimate area for retailers to use to grow CRM databases?Read more...


Mobile Tracking At The Mall: The CRM Potential Is Stunning

October 19th, 2011
When a major Australian shopping mall next month starts tracking consumers by their mobile phones, they will try and pacify privacy advocates by stressing that no customer names nor phone numbers will be given to retailers. Truth be told, the tracking information that they will collect will be far more valuable.

The vendor behind the trial, a U.K. firm called Path Intelligence, pledged that "no mobile phone usernames or numbers could be accessed" and that "all we do is log the movement of a phone around an area and aggregate this to provide trend data for businesses." But what if that phone-tracking data is linked with security cameras and/or POS systems? What if a mall representative called one of its retail residents and said, "We're now tracking a woman who has spent $980 in the last hour and she has just walked into your store. For a $300 fee, I'll tell you exactly where she's standing right now. Deal?"Read more...


Japanese RFID-In-Hanger Trial Raises Questions About Extra Labor, Customer Distractions

October 19th, 2011
A Japanese department store, 109 Men's in Shibuya, has begun experiments with RFID chips embedded in clothes hangers. The idea is that a customer who takes clothing off the rack would trigger associated video, lighting and music, along with a log of the action. But will such a system be worth the non-trivial amount of extra labor involved?

When customers bring clothes to a dressing room—or even when those apparel items are purchased—there would seem to be a strong chance that the wrong hangers could get associated with the wrong piece of clothing. Attentive associates could painstakingly note the numbers of each identical hanger to make sure one item doesn't get confused with another, but that would seem to demand a sharp labor increase.Read more...


PCI Finally Addresses Vending Machines, Phones And Kiosks That Take Cards. For Retailers, Though, It’s Still Tricky

October 19th, 2011
The PCI Council has updated its PIN Transaction Security (PTS) rules to include newer types of card-accepting systems, including mobile, kiosks and vending machines, but left vague are many of the most practical retail issues. The new PTS version 3.1 is aimed at device manufacturers. Given that retail shops need to be populated with compliant devices, though, how much time will device makers have to make upgrades? How long will existing systems be given a pass?

The guidelines, which are generally filled with commonsense security restrictions, offer nothing about timing, schedules or when retailers can—or should—include the new requirements in RFPs. The closest the guidelines get to referencing existing hardware is a brief comment that such components can be reused in newly approved systems. It does, however, detail fees.Read more...


Sears’ Mobile: Focusing On The Consumer Who Doesn’t Have A Smartphone

October 19th, 2011
Sears' in-store mobile move is more about feature migration (from POS and consumer's phones to phones controlled by associates) than new functionality. But for an October 2011 rollout—given some of Sears' thinking—that might be just perfect. When Sears on October 13 added its name to the lengthy roster of chains rolling out in-store associate-controlled Apple devices, it opted to not offer checkout. But it is mirroring the services for customers that associates have, for years, been able to do from POS stations and that customers (for a lesser time) have been able to do from their own smartphones.

Sears' conservative move makes more sense in the context that many customers may not feel like using their phones while shopping and, more to the point, most American consumers don't yet have smartphones—if you accept the smartphone definition of a phone that can download third-party apps.Read more...


One Of Out Three Retailers Screw Up QR Codes. They Are A Lot Harder To Use Than They Look

October 19th, 2011
With all of the recent challenges retailers—including Macy's and HSN—have had with QR codes, it's not a surprise that many chains have underestimated how complex and difficult those little dot-filled squares can be. It's not really that QR codes are so complicated as much as it is that they are different. The problem is that they are misleadingly similar enough to retail-friendly barcodes that they lull many into thinking QR codes can be handled the same way. As chains have tried pushing the images beyond posters and into devices such as televisions and magazines, they have slammed into the logistical problems new technology brings.

For example: Where should the QR codes be placed? Should it be near the bottom of the screen? Well, what if the consumer time-shifts with a DVR or Tivo? A part of the code could be overridden by screen buttons. Place it in a glossy magazine? Good choice, but you have to steer clear of the page side toward any glued (perfect-bound) gutter or else consumers won't be able to get a full scan of the image.Read more...


Wal-Mart’s Facebook Deal A Clever Way To Awaken Lethargic Store Managers

October 13th, 2011
Wal-Mart on Tuesday (Oct. 11) announced a deal with Facebook to launch more than 3,500 store-specific Facebook pages. This move could mark the beginning of a key positioning change—both with the world's largest retailer and the many other chains likely to follow Wal-Mart's strategy—of thinking of the Web face of Wal-Mart being one chain instead of thousands of local stores.

Beyond the obvious—strengthening the local friendly face of the neighborhood store—this could alert corporate to stores that are resonating with their audiences and those that are not. It's not unusual for chains to allow specific stores to have very different product mixes based on the manager's read on local customers. In turn, this could enable those differences to be much more pronounced than is practical today with a single walmart.com site. This all presumes, though, that customer interactions with local Facebook sites—especially as measured by the number of "likes" a site gets—is a meaningful metric. That's far from being a given.Read more...


Mobile POS’s Unfixable Single Point Of Failure: Wi-Fi

October 13th, 2011
Just when you thought you had figured out how to deploy in-store mobile devices, something comes along to remind you that it's not that simple. Last month, the FCC ordered 20 small online retailers to stop selling illegal devices that jam the signals for mobile phones, GPS and Wi-Fi. No surprise there—but also not much impact, because such devices are easily available from other online retailers. That means anyone willing to pay as little as $80 could walk into a store in your chain and jam the Wi-Fi that your mobile POS depends on.

It's a classic single-point-of-failure problem, and it could be frighteningly disruptive—especially since this holiday season will be the first at many stores with lots of in-store mobile devices in use, and almost all retailers are using Wi-Fi to keep them connected. A saboteur who uses a pocket-size jammer wouldn't have access to payment-card information, but what's supposed to be an impressive demonstration of retail technology would just irritate customers and frustrate associates—especially during the high-volume times that mobile POS should be a relief. And that's just from an intentional saboteur. Unintentional Wi-Fi jamming could have even worse effects.Read more...


Walgreens’ New Prescription Text Service Is Fast And Pointless

October 13th, 2011
Last Thursday (Oct. 6), Walgreens rolled out its latest mobile feature, which enables its customers to get text reminders of prescriptions that are due for refill, orders that the chain said can be completed "with a simple 'refill' reply." But as another reminder of the challenge of federal pharmacy privacy rules, the text is so restricted as to be borderline useless to the chain's best customers.

The new service, called Refill Reminder Text Alerts, is based on a top-notch idea. The goal is to aid customers who have multiple refills and have had the onus of initiating contact with their pharmacy every time a prescription needs to be refilled, even if they have been consistently refilling the same prescriptions every month for years. Instead of waiting for the customer to call, the chain is initiating that contact and asking with a simple text for permission to refill the order. The problem involves restrictions from the U.S. Health Insurance Portability and Accountability Act (HIPAA). It prevents the texts from identifying which prescription it's asking about.Read more...


BlackBerry Sneaks Up On Mobile Payments. Should Retailers Care?

October 12th, 2011
Pity the poor BlackBerry. There are more BlackBerry models equipped with NFC chips than there are NFC iPhones and Android phones combined. BlackBerry phones are actually being used for mobile payments in some Middle Eastern countries. And on Monday (Oct. 10), BlackBerry maker Research in Motion announced a new set of NFC-based features that sound like a perfect platform for doing payments, too. But still, nobody takes the BlackBerry seriously as a mobile-payments contender in the U.S.

There are lots of reasons for that: IT shops have bad memories of having to run proprietary RIM servers to support BlackBerry users. RIM's periodic network outages (such as the one slowing E-mail delivery and choking BlackBerry Internet access this week) give retail IT plenty of reason to hope payments will never depend on RIM. And although iPhones are sexy and Android phones are at least gadgety, BlackBerrys—until recently—looked downright clunky. But with a growing consumer fan base spearheaded by BlackBerry Messenger users, along with actual experience doing mobile payments, retailers may have to bite the bullet and accept that RIM is going to be a payments player in the U.S., too. The question is, how soon—and then how?Read more...


Google Loses Control As Retailers Push Out Wallet

October 12th, 2011

Retailers are starting to outrun Google when it comes to Google Wallet. On Tuesday (Oct. 11), the $334 million Peet’s Coffee chain announced that, by the end of October, it will upgrade POS devices to accept Google Wallet payments at all 193 company-owned stores—not just the ones in New York, Los Angeles, Chicago, San Francisco and Washington, D.C., where Google Wallet was officially rolled out in late September. Peet’s is working fast—American Eagle Outfitters didn’t even officially launch Google Wallet in the target cities until Wednesday (Oct. 12), although AEO actually had it working in some stores a month ago.

If Google was hoping for an orderly Wallet rollout, it may be out of luck. There’s only so long the window will stay open for retailers to look cool by offering mobile payments—once customers get used to it, Google Wallet will be more useful but not nearly so interesting. That means at least some smaller retailers may be in a race to get Google Wallet running in as many locations as possible, never mind Google’s plans. And once retailers, not Google, are calling the shots on the mobile-payments rollout, that’s control that Google may never recapture.…


HSN Advances QR Codes To TV—And Then Learns Why They Are So Frustrating

October 12th, 2011
HSN last Friday (Oct. 7) took the next logical step with mobile-friendly QR codes by placing them in a corner on the television screen, giving high-definition TV viewers the chance to learn more about the products being shown. In addition, HSN cleverly tried to avoid the QR snafus that other retailers—such as Macy's—have fallen into by using its on-air hosts to teach visitors how to use the codes.

But the limited four-day experiment also demonstrated the many QR drawbacks that retailers have to struggle with. A reporter for Forbes, for example, tried making a purchase during the event through a QR code and found that her couch was 10 feet away from the screen but that she had to get up to scan the code from five feet away. People who successfully navigated the QR code got to an ordinary Web site page. No discount, no special reward. And how long would the code be displayed? Then there's the learning curve.Read more...


Can Item-Level RFID Pay For Itself By Cutting Theft? Well, Sort Of

October 12th, 2011

According to American Apparel, item-level RFID can pay for itself by cutting employee theft. The 285-store chain’s VP of Technology, Stacey Shulman, told RFID Journal that in stores using RFID for inventory accuracy, internal shrinkage has dropped by an average of 55 percent. (The chain started by putting RFID in 50 of its stores with the highest shrinkage rates.) As a result, the savings covers the deployment cost. Of course, that’s something of an accounting trick. Deploy any surveillance technology in a store with lots of employee theft and some thieves will get nervous and stop stealing—for a while.

Shrinkage drops, and IT can declare that RFID’s ROI is 100 percent. Then, by the time the thieves start stealing again, it’s hard to argue with item-level RFID’s other benefits in better accuracy and faster replenishment, which is why Macy’s is pushing item-level RFID hard. Besides, the theft rate might never return to its original levels, right? It’s also wise to remember that the only retail people who care about ROI are the people can say “no”: your CFO’s team. And for IT projects, they check ROI once. So if it looks like thefts have been avoided, you get the credit. And given that the team won’t check again in four months, you’ll likely never get dinged if the reductions were short-lived. Short attention spans can be your friends.…


Count On Users To Foil NFC Payment Security

October 12th, 2011
Remember those demonstrations of how the payment-card numbers can be stolen from contactless cards by a thief carrying a card reader who bumps victims' wallets and purses in a crowd? Yes, it's been a staple of local TV news for years, and it's a legitimate potential security risk—a risk that was going to be eliminated by NFC mobile payments. That, it turns out, didn't quite work out the way the proponents of NFC phones were hoping it would.

The key to making phones more secure was supposed to be that a required PIN would prevent the NFC chip from being turned on most of the time, and the chip would be powered down quickly after a transaction when the screen went dark. That's certainly the way Google Wallet was designed for Android phones. But according to most of the reviews of Google Wallet, all that PIN-punching is a pain, and the phone's screen quickly going dark is annoying. Guess how secure that makes the NFC chip?Read more...


PCI’s ISA Program: How Independent Can An Employee Ever Be?

October 12th, 2011
In the PCI alleys, there has been some back-and-forth recently about the PCI Council's Internal Security Assessor (ISA) program and some MasterCard changes about whether participants needed to be auditors. Although the impact of the back-and-forth is relatively trivial, it brings up an interesting question: How independent does an independent assessor really need to be?

The essence of the ISA program is for retailers to have someone on their team who is trained in PCI nuances and who can help the chain maintain compliance between assessments. Most of the retailers that are working with the ISA program plan to continue using their QSA. If ISA works, it would enable much faster and less painful assessments, because someone internal at the merchant is constantly watching for anything that could cause a compliance problem. To be candid, none of the players involved is independent at all. The internal folk are all on the retailer's payroll, and the external QSAs are all being paid by the chain to conduct the assessments.Read more...


Why The NFC No-Show For Apple? It’s The Apple Experience

October 5th, 2011
Apple on Tuesday (Oct. 4) made the boldest—and smartest—mobile payment move it possibly could: nothing. Based on almost any metric—customer experience, market share domination, ROI/profit enhancement, pushing the sales of non-payment hardware/software, etc.—the right course now is for Apple to sit back and let Visa, Google, PayPal, Square and ISIS fight it out as they pay for the infrastructure. Then, when the bugs have been worked out so Apple can deliver its legendary "it just works" customer experience—then jump in.

Not unlike IBM in the 80s and 90s, Apple is in the highly enviable position that it can wait until it's time and then still dominate the market when it makes the move. Indeed, it might even be easier and more effective to do it that way. But that strategy will also determine who will define the retail NFC standards that matter—the ones on the checkout counter and in the retailer's datacenter. And that won't be Apple.Read more...


Phone Maker HTC Breaks Its Own Security. These Are The Guys Who Will Help Bring Us Mobile Payments?

October 5th, 2011
Even as retailers and customers ramp up for mobile commerce, some smartphone makers still don't have a mindset that's ready for handling payments. On Tuesday (Oct. 4), handset vendor HTC admitted that an application built into some of its Android phones could leak sensitive user information—such as GPS data, E-mail account information and potentially even payment-card numbers—to malware that could get the data without a password or any special permissions except the right to connect to the Internet.

The specific information that HTC's logging software collects isn't tremendously sensitive—we're talking location, not payment-card numbers. However, the fact that megabytes of data are being scooped up by the phone's maker, but not secured by even a password, is a sign that smartphone vendors still assume a phone is just a phone—instead of a combination payment terminal, mobile wallet and M-Commerce browser.Read more...


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