Evan Schuman's StorefrontBacktalk

A major E-Commerce customer satisfaction survey is showing traditional brick-and-mortar retailers quickly catching up with the traditional pureplay Web retailers.

Although the figures released this week by ForeSee Results still show the same players safely on top—including Netflix, Amazon.com, LLBean.com, QVC.com, Apple.com and Old Navy.com—and the same players (including Costco, CompUSA and CDW) on the bottom, ForeSee CEO Larry Freed sees surprising advances by some of the at-one-time Web challenged multi-channel retailers.Read more...

Just in time for the holidays, data thieves are giving big brightly-colored wrapped gifts to Visa, MasterCard and AmericanExpress every time they seal their steal.

The traditional credit card companies are fighting for their lives against a plethora of new alternatives, ranging from debit cards, non-credit-card contactless payment, cellphones, eCheck, PayPal and Bill Me Later, not to mention new-fangled hybrids that merge loyalty/CRM, giftcards, incentive coupons and POS card, such as a pilot at the Subway chain.Read more...

Noticed a statement issued today from a major East Coast mall and initially thought it was actually a promotion from some consortium of E-Commerce sites poking at the ways malls think. But, no, a mall was indeed behind it, suggesting that they had perhaps downed one eggnog too many.

The King of Prussia mall in PA announced that it would be giving away 1,000 Black Friday Survival Kits that each contain “an ergonomic canvass backpack that includes a voucher for a free neck massage,” a Starbucks gift card, bottled water and a store directory.

What an effective way to remind people of the advantages of not shopping in a mall. Maybe they should have included aspirin, a walking stick and perhaps a “Get Into Debt Free” card. Why would a call purposely emphasize the negative things about brick-and-mortars? Why not stress (there’s a good word to avoid) the ability to try on clothes, try out electronics and inspect merchandise? Or the ability to walk out everything right away? Not trying to flack for malls, but come on, people. Give yourselves a fair shot.…

StorefrontBacktalk was asked to pen a column about the impact of the cellphone on today's retailers for the Retail Systems Alert Group.

We argued that those devices are taking on lives on their own in a myriad of ways, from using their photo lens to read barcodes on advertisements to acting as a portable POS to an integrated loyalty card and coupon-generator. To read the full column,

Gift card sales are projected to $24.81 billion this holiday season, according to a survey done by the National Retail Federation and published Friday, and the NRF reports that as the largest gift card sales projection they’ve ever given. Indeed, that’s $6 billion more than they reported just last year. That survey also projects that “average consumers” will spend significantly more on gift cards than they did last year–$116.51 vs. $88.03 in 2005.

Is it just me or does this take away almost all of the holiday magic of gift-giving? Isn’t the whole point that the gift-giver thinks about the recipient enough to select the ideal item? Well, there’s one consumer benefit: No needs to wonder about how much you spent.…

Macys.com announced on Thursday that it’s revising its merchandising and financial analytics set with more software from SAS.

Kent Anderson, president of the Federated Department Stores division, said the online face of a major brick-and-mortar chain has very different needs that it’s physical counterpart: “Macys.com stocks warehouses, not stores,” he said.…

A consulting firm’s recent report that credit card interchange fees are weighed against retail interests may help push alternative payment methods. That might put pressure on the credit card players to soften their fee requirements.

The report from the Chicago-based Diamond technology consulting firm found, for example, that some 44 percent of interchange costs are used to fund credit card rewards programs even though “merchants get nothing out of these programs because they are competitive tools for issuers. Merchants likewise pay about 3 percent of their interchange dollars for association branding costs. Meanwhile, processing— the original reason for interchange—comprises only 13 percent of interchange costs. Given the merchants’ lack of perceived value for what they pay, the situation is clearly unstable.”

The report holds out hope for contactless payment options, cellphone payment and other alternative vendors including PayPal, Debitman and PayByTouch.…

The CRM market is growing consistently and will probably hit $18 billion by 2010, but the biggest effort will be in getting more out of already-installed CRM packages, according to a new Forrester Research study.

“When I talk to people, most feel they haven’t used what they already bought,” Forrester analyst Bill Band was quoted saying in an insightful SearchCRM story. “They’re in that mode of getting value out of what they implemented.” Total CRM revenues in 2006 will reach $8.4 billion, up 7 percent from the year before and growth will hang steady, averaging 7 percent per year and reaching $10.9 million by 2010, the story said. …

A Rutherford, NJ, vendor is pushing an interesting service, aimed at boosting customer service quality: Take the recordings that many retailers already capture with their customer service reps and make free copies available to that merchant’s customers.

The company, Nice Systems (which is apparently not going to partner with Naughty Systems for the holidays, even though it would be a retail writer’s dream come true), specializes in call recording technology. They’re the people often behind that oddly-phrased “This call is being recorded for quality assurance purposes.” Invariably, the call that they happens is anything but quality and that’s the point. Many customers would rather talk with someone about a problem or an order with, but they also prefer the automatic transcript that an E-mail thread offers. Even IM discussions leave an explicit record of what was ordered and what was promised. The Nice folk want to offer free digital recordings of the conversation so the customers can later prove what was said and how it was said.

Don’t know how many retailers will take them up on it, but it seems like a cost-effective way to encourage customer service reps to be less naughty and more …. you know.…

Newgistics has made a nice little living selling software to help retailers handle product returns. On Monday, the Austin vendor launched a package designed to help with large-scale recalls.

I am envisioning their launch presentation to investors: “People, only invest in this if you believe that American manufacturers are going to screw up a lot more in the next two years.” Betting on manufacturers to botch product safety. Now why can’t my mutual fund invest in that?

The Newgistics program supposedly helps retailers and manufacturers manage “each phase of the recall process, from customer notification to product disposition,” said a company statement. “Once a company has developed the product recall message in conjunction with the Consumer Products Safety Commission, Newgistics works closely with the company to promptly deliver customized recall information to impacted consumers via E-mail or postcard. As a key component of the online recall program, customers can access the Returns Center, an online portal that captures customer information, creates a dynamic return label and conveys recall status information to the retailer or manufacturer. Alternatively, companies can implement the recall program offline, providing consumers with a dynamic return label along with the recall notification.”…

For powerful retail brands, the lure of a branded Web site can change almost everything. Consider HomeDepot’s findings with its catalogue business, where the retail giant is folding two catalogs it had launched barely a year ago.

The two discontinued catalogs–Paces Trading Company and 10 Crescent Lane—will now have their products touted instead on homedepot.com as well as the core Home Depot catalog, according to a report in Direct Marketing News.

Lois Boyle, president of direct marketing agency J. Schmid & Assoc., Shawnee Mission, KS, was quoted as saying the move was “no surprise. Just because you have a database of names, it doesn’t mean you understand their wants and needs or that they want to relate to you in that way.”…

Retailers have for years argued that their online and offline operations should be seen as one. A recent survey suggested that the persuasion was working and that some retailers may regret it.

The survey by Gomez, an internet performance tracking company, shows that many consumers who have a bad online experience are now avoiding the in-store experience from that same retailer. In some instances, that truly is a Catch-22 situation. Nordstrom, for example, has a reputation for delivering extremely personalized and attentive customer service for people visiting their stores. That high-touch attribute is quite difficult to replicate online, setting themselves up to disappoint online visitors. Those disappointed unhappy online visitors would then potentially punish the brick-and-mortar locations as well.

“Retailers have been very slow to understand that, to the consumer, it’s one brand,” said Paula Rosenblum, a retail technology analyst for the Retail Systems Alert Group. “They’re not structured for it. They’re not compensated correctly for it and, in many ways, their technology isn’t set up to accommodate that.” To read the full story, please click here.…

A New Gomez report said that a good chuck of frustrated buyers will vindictively shun the brand’s offline presence as well.

Physical and online parts of a retail brand need to be very different and to stress those differences, said William Agush, the firm’s marketing VP. Otherwise, consistent branding could actually serve to undermine the retailer. “If you don’t see any differences and you have a bad online experience, why would you use” the brick-and-mortar?, he asked. “Retailers need to exploit those differences.”…

An ink defense to the growing fake receipt scam has been rolled out by UK paper supplier Vanguard. The introduction is not coincidentally timed for the holiday shopping return season, with a National Retail Federation survey published Wednesday showing some 52.4 percent of retailers complaining of counterfeit receipt scams.

The Vanguard tactic uses two layers of ink, somewhat similar to the scratch lottery cards. According to a story in The Retail Bulletin, “a cashier simply strikes a fingernail over the ink. If a new layer or color is revealed, the receipt is genuine. Discreet and simple, the inspection can be carried out unknown to the fraudster, giving the cashier valuable time to alert security.”

Vanguard isn’t the only outfit to try and get clever with retail receipt printing this week. NCR on Halloween introduced a new two-sided thermal printing package, allowing retailers to post highly-customized messages on the back of customer receipts. NCR was trying to position the printer as a logical CRM companion. Tracy Flynn, an NCR VP, was quoted in a statement saying: “With two-sided printing, the need for preprinted rolls is eliminated, which removes outdated messaging in exchange for customizable, targeted advertising and marketing initiatives on the back of each receipt.” …

The latest batch of test results from Keynote Systems released Tuesday is giving more evidence to those who argue that E-Commerce sites must be simplified, reliable and fast even if it means that they are not as gorgeous.

Consider the clothing retailer that came out as number one in both of Keynote's rankings (for speed and reliability): Zappos, a $600 million shoe merchant, which easily beat out much better funded rivals including JC Penney, Kohl's, Banana Republic and Nordstrom. On the other end of the spectrum, the Gap had a lock on last place in both categories. A quick look at the sites of Zappos and the Gap shows why. Zappos' homepage uses tiny images and lots of text. It's design is a bit crowded, but it's functional and efficient. The Gap's site's homepage autoplays music over a brightly-colored Flash presentation that autoplays. To read the full story,

In their efforts to dominate retail software, the several-year-old war of words between SAP and Oracle has leveled off at a merely obnoxious level and has no signs of stopping. Although the back-and-forth rhetoric is nothing new–we ‘ve reported repeatedly on both Oracle’s and SAP’s inclination to not let reality stand in the way of a good news release.

But a new story from the Bloomberg news service puts the distortions beyond carelessness and aggressiveness and argues that it’s a deliberate campaign, intended to force one side to prematurely react to the other. A good read, either way.…

There’s just something about being a $338 billion retail chain that casts huge significance over even trivial moves. When the world’s largest retailer moves into pharamacy sales, it quickly becomes the largest pharmacy. It starts to do some grocery and it quickly dominates a third of all grocery sales.

So it is with Wal-Mart’s in-house video system. It’s just a system to broadcast ads to store visitors, but as IHL Consulting Group President Greg Buzek has said, “it has a bigger audience than any TV show.” This week, that “tv show” moved into the next phase, with an order for 100,000 flat panel screens, designed to deliver product messaging for specific aisles via eye-level plasma screens. Wal-Mart’s IPTV network will run transmit over–logically enough–IP connections. Wal-Mart, which is working on the in-store media network with Premier Retail Networks, is considering future capabilities that might be linked into customers’ actions, said PRN VP Genet Garamendi.…

One of retail's most important IT executives--Circuit City CIO Mike Jones--has left the $11.6 billion chain, with the chief IT job going to his VP of business applications.

Jones had a very creative and visionary perspective for the chain and a company statement left unclear the circumstances of his departure, although the vaguely ominous phrase "to pursue other interests" was used. The statement said Jones will relinquish his CIO role "immediately" but added that "he will remain at the company until mid-November to transition his duties to his replacement."Read more...

An upcoming retailer/supplier trainwreck collission over store localization, Amazon's abandonment of key features of its A9 search engine, whether a new giftcard service will change retail approaches and the privacy controversy surrounding Hitachi's new RFID tag. Those were the topics for this week's StorefrontBacktalk Week In Review audiocast.

This week's panel featured Forrester Research's Nikki Baird, the Retail Systems Alert Group's Steve Rowen and Ken Morris of The Lakewest Group, along with StorefrontBacktalk Editor Evan Schuman moderating.Read more...

BestBuy was the retail maverick about two years ago, when it rolled out its customer loyalty program that charged customers $10. It worked to the tune of some 7 million takers, many of whom spent 130 percent more than typical BestBuy customers. Beyond the $70 million in additional direct revenue, those cardholders on average spent 130 percent more than typical BestBuy customers.

This week, though, BestBuy gave up the fight, opting to give up the $70 million in hopes of getting a far larger percentage of its customers to start using the card and being tracked.…

The marquee names of the participants in lockstep agreement couldn't have been more impressive: Wal-Mart, P&G, Kellogg's, Coca Cola, Miller Brewing, Disney, Walgreens and more. They were all coming together to support a method for tracking aisle traffic for the purpose of properly pricing promotion fees. But according to a panel of retail technology experts this week, they couldn't be more wrong.

The dramatic infrared sensor announcement will offer no true advantages over the old-fashioned mechanical counters and is a puzzling move, said Paula Rosenblum of the Retail Systems Alert Group.Read more...

There must be something slightly surreal in creating a company whose products only function well when another company does its job poorly. Then again, if it makes a buck and helps its customers, what’s wrong with that? I mention this in light of a statement issued Monday by a Colorado company that helps EBay customers do better in the sea of EBay bureaucracy.

If EBay kept its systems clean and simple, then Colorado Springs-based Internet Business Skills wouldn’t have a chance. Therefore, they have a very bright future. The company bills itself as “the only company providing analytical intelligence to eBay sellers in order to reduce fees” and I think it’s a safe bet that their description is accurate. The product–Pyrolytics 2.0–analyzes inventory, keywords and price to help customers reduce listing and marketing fees.…