Evan Schuman's StorefrontBacktalk

For readers focused on any of those areas, the Monthlies provide an easy way to keep up-to-date and to make sure you don't miss any story important to your operation. The Monthlies also have two other helpful features.Read more...

There are two different legal precedents for these situations, writes Legal Columnist Mark Rasch—and in fact, they go in exactly opposite directions. That creates an inherent problem, for both consumer relations and the law. Customers could feel cheated if price changes don't work the way the customer expects. And as ESLs make in-store pricing work more like online pricing, that could change the way courts see it.Read more...

Although you got a telephone number and directions, Google got information about not only what people in general were searching for (people in Piscataway picked pizza) but also what a specific person was looking for (John Smith—or John's telephone—searched for the number for an AIDS clinic, then a drug store, then life insurance). Again, because Google isn't a phone company or particularly regulated in any way, it could use or sell this information in any way consistent with whatever privacy policy it wrote. But Google got much more than that. Read more...

In yet another example of mobile rewriting almost everything retail, the most recent quarterly POS terminal shipments spiked nearly twice as much as had been predicted, according to new figures from IHL. One of the key factors driving those shipments was retailers eager to upgrade their POS to be in a better position to accept mobile payments. “The biggest surprise was the resiliency of the POS market and the level of shipments, which was nearly double what we had predicted for the quarter,” said IHL CEO Greg Buzek. “In a global economy that slowed tremendously in the second quarter due to fuel prices, earthquakes, tsunamis and other factors, the retail POS market was particularly strong.”

IHL is now projecting a $7.3 billion worldwide POS spend for 2010—which includes hardware, software, and maintenance—and it expects 2011 to hit $7.78 billion. For the “pave the way for advancements” category, Buzek pointed to mobile as well as CRM, loyalty and merged-channel capabilities. On the more pragmatic side, many of these purchases are most likely equipping stores that were ordered long before the global recession peaked. “These were capital campaigns that were in the works before the economy soured, so it is 2010 results, creating budgets and new stores, and that creates a need for new POS,” Buzek said.…

It's not just that the new homepage is cleaner and more open to make it easier to browse (and buy) from a tablet. The same changes—bigger buttons, less clutter and small print—will make the site much friendlier to other customers, too. That could force other E-tailers to throw out the rulebooks for their own aging Web site designs—most of which probably seemed like a good idea in 1995, but haven't been completely revamped since E-Commerce became serious business a decade ago.Read more...

Although there are lots of factors at play here, the primary power benefit of mobile is its battery power supply and, to be quite cold about it, the fact that the customer's device is powered by the customer. The power benefit of M-Commerce is that its power supply is probably a long distance away, somewhere not impacted by whatever is causing a store's power outage.Read more...

The dream—and nightmare—of every E-Commerce head is to start over from scratch, scrap all the legacy kludges that developers have been working around for years and build a Web site that does exactly what the chain wants. Most retailers will never be able to cost-justify that greenfield approach, of course. Target's site, however, had to be built from scratch because its decade-long deal with Amazon to operate its online business had expired.Read more...

And failing to take customer privacy into account can have serious consequences, writes Legal Columnist Mark Rasch—the Federal Trade Commission has a decade-long history of going after retailers with unfair or deceptive trade enforcement actions—enforcing customer privacy even in some cases where a retailer has gone belly up.Read more...

Suppose a customer's phone contains a shopping list of specific apparel items she wants to buy from another retailer—including images of those items or even links to them on the retailer's Web site. A shared screen could make it very easy for an associate to suggest alternatives or help the customer mix and match, whether the items are in the store or not.Read more...

The developer, Broken Thumbs Apps, isn't a retailer. But the case sets a standard for retailers whose apps may be used by children under 13: Offering underage customers kid-friendly activities puts you squarely in the FTC's sights unless you get parents' permission for every child's information—even if the information will only be used internally.Read more...

"No one has cracked the code on how social media impacts retail. I recently had an agency pitch an app as a way to build brand awareness. I pointed out that for someone to go to the trouble of downloading an app, they already need to be aware of the brand. So at best you could argue that it would help brand engagement, but not brand awareness. Lots of money is being spent in this area. Suspect most of it is being poured down a rat hole." The rat hole is simply that retailers don't have the ability today to understand the social-media influence on retail, and that lack of understanding is almost certainly causing a lot of wasted effort and money.Read more...

Granted, there are shopping carts full of complexities and nuances in analyzing such profiles—generating a meaningful influence rate, if you will—but that's where the fun comes in. Even worse, beyond those analytical complexities, there's the issue of how to get this data in front of the eyes of store associates and also how to do it in a timely matter. Of course, to start things off, there needs to be a reliable way to identify these influencers as they enter your store.Read more...

Let's take this slowly. Circuit City hasn't been an in-store national chain since 2009. But when it liquidated, no one apparently thought about the IP addresses, according to Gabe Fried, the founding principal of Stream Bank LLC, which handled Circuit City's liquidation and is now handling the one for Borders. "The people who knew that [Circuit City] had these assets left the company" rather abruptly when Circuit City didn't find a buyer for the chain and liquidation proceedings began, Fried said. "The problem involved management bandwidth and a lack of knowledge of [the IPv4 addresses'] existence."Read more...

Nohl told The New York Times that mobile operators turn off GPRS encryption "to be able to monitor traffic, to detect and suppress Skype, or to filter viruses, in a decentralized fashion." Unfortunately, that also means thieves with reprogrammed mobile phones can eavesdrop on many M-Commerce transactions using GSM smartphones. And even if payment-card information gets its own layer of encryption, there's still plenty of other personal data that customers would probably prefer not to fall into the hands of thieves.Read more...

The retailer wouldn't say how many customers signed up for the notification or whether they received any special offers as an apology for the site being down. But the "leave your E-mail address" tactic is especially interesting because it specifically promised that the E-mail addresses would not be used for anything except notifying customers when the site was back up. That was probably a lost CRM opportunity, but it may have been much more valuable in rebuilding customer trust.Read more...

As federal bankruptcy courts dismantle every last remaining piece of the once-mighty Borders book chain, including a CRM database of some 43 million loyalty-program customers, one asset caught the eye Wednesday (Aug. 10) of liquidators: IPv4 addresses.

In light of the severe global shortage of IPv4 addresses, this asset—far removed from the books and online files—may be the most valuable of all. “In addition to its trademarks and E-Commerce assets, Borders is the holder of a contiguous block of IPv4 addresses, which it seeks to transfer to a qualified buyer,” said Wednesday’s statement from Streambank, the company retained by the Bankruptcy Court for the Southern District of New York to market and sell the chain’s intellectual property assets. “Borders has established a worldwide reputation as a leading destination for buyers of physical and digital media including books, eBooks, eReaders and related accessories. Borders remains engaged with its customers through the Borders.com E-Commerce site, which it expects to continue in business until transitioned to a new operator.” How sad is it that one of the nation’s largest bookstore chains is ripped apart and the most exciting asset is IP addresses? Talk about ego-deflation.…

The combination makes absolutely practical a science-fiction-like scenario of customers being identified as they walk into a store by virtue of their face alone. Cameras at POS could match faces with names from a payment card, thereby enabling the customer to be subsequently identified and tracked without a loyalty card. The CMU experiments suggest an even more powerful privacy-smashing scenario, with consumers walking into a store identified by any site that has ever posted their pictures. Imagine a loyalty program with 90 percent participation, requiring no effort—nor, for that matter, intent or consent—from any customers. An absence of laws will make the ethics of retail senior executives the only boundary. (Uh-oh.)Read more...

The legislation, which has more holes than a chuck of Swiss cheese, would place these burdens on retailers while ignoring a lengthy list of other people in the retail environment who have access to the identical data. The key problem, pens Legal Columnist Mark Rasch: The writers of the legislation didn't think much about how retailers do their magic.Read more...

The legislation reaches well beyond bookstores and physical books, covering audio books and E-readers as well as almost any retail chain that includes a books section. (Barnes & Noble? Definitely. Wal-Mart? Certainly. Safeway? Maybe.) The bad news: Retailers covered by the law will be required to create a detailed, publicly available annual report covering how much customer information was disclosed the previous year—whether it was disclosed with customer approval or not.Read more...

Unfortunately, bankruptcy courts really don't care what promises were made to collect CRM data—it's an asset, so it's for sale. Unless retailers can find a way to enforce customer privacy even after the retailer has gone belly-up (something no retailer wants to think about in creating a loyalty program), there's a very real risk of losing customer trust—and gaining the unwanted attention of politicians who have discovered that privacy is now a popular buzzword.Read more...

But the chain's mobile move is missing most of the value of mobile, and this is especially disappointing given that the free Wi-Fi is part of a major in-store television rollout. The chain's 5,600 locations will have video throughout the store that will "feature engaging content such as music, lifestyle, entertainment and sports, and also free Wi-Fi to keep our consumers connected with their friends." That sounds fine, although it's supremely vague, even for a news release. ("Hmmmm. What type of engaging content will you offer?" "Entertainment." "You sold me.") But here's where it starts to get sad. Is that informational—as in "alert me if severe weather is suddenly predicted for the area I am in" or "message me if there's news on any of the following keywords"—or is it merely ads?Read more...

The first bill, introduced by Senator Al Franken (D-Minn.), is called The Location Privacy Protection Act of 2011. It is trying to force telcos and retailers to get the consumer's "express consent before collecting his or her location data and to get that customer's express consent before sharing his or her location with third parties." The second bill, introduced by Senator Ron Wyden (D-Ore.), is called The Geolocational Privacy and Surveillance (GPS) Act. It is designed to restrict how government investigators can access mobile-location data. The key problem is that these bills are focused on location-based mobile services, and they tend to forget that the most common location-based mobile service is getting the phone to ring when receiving a call.Read more...

Groupon’s subsidiary in India, Sosasta, has exposed the E-mail addresses and unencrypted passwords of all 300,000 of its users. The Sosasta user database was found on the Internet by Australian security consultant Daniel Grzelak, who was using ordinary Google searches to hunt for exposed databases. Grzelak notified Groupon last Thursday (June 23), and the company said it immediately locked down the database and began notifying subscribers.

Groupon, which acquired Sosasta in January, said in a statement: “Sosasta runs on its own platform and servers, and is not connected to Groupon sites in other countries. This issue does not affect data from any other country or region.” In light of recent E-mail spills from Epsilon and Sony, maybe it’s a good thing that Groupon hasn’t had time to properly integrate a new acquisition. And with the new data-privacy rules that India has enacted since Groupon bought Sosasta, at least now Groupon knows it has a problem.…

"Consideration was given to the possibility of providing separate XML interfaces. However, it was decided to provide a common XML interface embracing the requirements of all of the applications, because this was consistent with the historically common practice of integrating applications through POS transaction log files," the new standard said. "It is noted that audit, security, labor productivity and activity analysis applications are very demanding of detail content, [with] all driving the need for an all-encompassing XML schema."Read more...

One retail IT line that is too cynical to not share: In an unrelated interview, a senior IT manager discussed working with certain internal clients—business unit heads who had, until recently, been just colleagues.

What’s the difference, he was asked, between a colleague and an internal client? “Simple,” he said. “An internal client is a colleague who’s had his reasonability removed.”…