Evan Schuman's StorefrontBacktalk

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.…

Disparate mobile-payment-related moves from Bank of America, US Bancorp, Verizon and Visa this month show a continuing shift to mobile payment from key telecom and financial players. The moves are not aligned, which shows the type of multiple experiment efforts typical at the start of a major channel. Bank of America and Visa are beginning a mobile contactless payment trial to run from September through New Year’s Eve in the New York metro area, with an identical trial at US Bancorp slated to start in October.

An unspecified number of consumers in the trials will be provided with contactless chips to insert into their phones. The problem with those trials is it’s likely testing the wrong things. Few have questioned whether the payments will work. The issue is whether consumers will bother to make contactless payments. People chosen for these trials will be much more likely to participate, so it’s not clear what they will prove. The Verizon trial comes in the form of a $400,000 investment by Verizon in CardStar, which consolidates CRM and membership cards in a phone, according to The Wall Street Journal.…

A preliminary investigation by the Austin Police Department Financial Crimes Unit—which knows its way around credit card theft—ruled out a skimming attack against Tinos Greek Café. That placed the attention on a database of the cards used at Tinos, either in Tino computers (just PCs) or at Heartland, said Sgt. Matthew Greer of that financial crimes unit.Read more...

Gap, along with its Banana Republic, Old Navy, Piperlime and Athleta brands, announced August 12 plans to move from a site supporting one country to one supporting 65 countries by the end of December. The $14 billion chain is tackling the expansion with two parallel efforts: It's going to build its own physical fulfillment centers in both Canada and the U.K., in addition to crafting dedicated customized E-Commerce sites for those two countries; and it's using a vendor to add a small Flash module to replicate local checkout.Read more...

Although it can be considered cryptographer heresy to suggest that encryption is ever a bad thing, if it's applied to certain fields, encryption may actually sharply undermine security by making it much easier to break the encryption key. And when that happens, pens PCI Columnist Walt Conway, the whole gig is up.Read more...

The most powerful change from the hints was a warning that too much encryption may actually weaken network security. (See this week's PCI column from Walt Conway.) But let's delve into some of the more mysterious and intriguing elements first.Read more...

That Nook feature, which Barnes & Noble calls "Read in Store," doesn't just allow customers to browse whatever they want in the store. It also allows the retailer to track each customer's browsing habits to the second -- and to the page. That's a potential gold mine of data for feeding recommendations to customers as well as managing dead-tree inventory. And because "Read in Store" has turned out to be very popular with Nook-using customers, Barnes & Noble knows there's a demand for the feature--and a lot of customer data to be acquired from it.Read more...

In the 15 years since Web pioneer eBay began, the E-tailer has never bothered to have a rewards program. That changed on August 13, when it unveiled a 2 percent rebate on “most items purchased through the site with PayPal.” Although the size of the rebate is certainly modest, eBay may have let a wee bit too much honesty show through in its statement.

“We’re giving eBay’s most loyal shoppers something special in return–money to spend on eBay,” said Lorrie Norrington, president of eBay Marketplaces. Hey, the truth is the truth. We’re simply used to marketers dressing it up a bit more. Then again, why pretend that eBay wants its customers to pocket these rewards?…

The moves--and different strategies--are especially interesting given how pharmacies today find themselves in arguably the most data-sensitive retail segment. This space has all of the usual retail privacy concerns and regulations, in addition to medical requirements such as the U.S. Health Insurance Portability and Accountability Act (HIPPA).Read more...

It turns out that charging $19.99 to review harassing or libelous comments posted on a Web site really is a really bad idea. On Monday (August 9), the local-Web-message-board group Topix officially agreed to stop its ill-advised, year-long attempt to monetize the monitoring of its sites. Topix says it will now review all reported abusive posts for free, remove inappropriate posts within three working days and report illegal activity to law enforcement.

Topix had help changing its mind: In May, 23 state attorneys general called on Topix to stop its pay-for-policing charges, with the implicit threat that they’d get tougher if Topix didn’t end this policy. As we said then, retailers also have lots of ideas for making money on the many non-customers who hang out at their E-Commerce sites just to comment. But you wouldn’t charge $19.99 to have a security guard stop thugs from roughing up someone in your store. Maybe that’s the test case to use for deciding whether an audience-monetizing idea is over the top.…

In the merged channel world of E-Commerce versus In-Store versus Mobile, the difference invariably comes down to convenience. E-Commerce beats in-store with convenience, while Mobile beats E-Commerce with convenience. The only way for channels to survive is to stress their unique value to consumers. With that in mind, the $1.9 billion Pep Boys has come up with a deliciously creative way to do something only an in-store channel can do.

The 560-store automotive chain selected one train station to act as a trial. Customers who happen to use that train station–located just outside Philadelphia–can drive into the station, park, take the train into work and when they return to the station, their car has been repaired and is sitting in the parking lot again. If it works, this approach eliminates the hassle of getting the car to the mechanic and retrieving it (a fun trick that typically requires two drivers to switch off). …

This week’s study on Web-browser privacy has one especially interesting element: how the university researchers reached their results on the number of people who use browsers in private mode while shopping online. Did the researchers from Stanford University and Carnegie Mellon University just extrapolate from available Web survey numbers, the way you might expect cash-strapped academics to do?

No, they actually bought ads on three types of Web sites (adult, gift shopping and news) and tracked how many users of each type of site were in private mode when they landed on the ads. The researchers shelled out $120 to buy a total of 155,216 ad impressions, split evenly among the three Web site categories. That gave their survey a far better statistical sample than many high-priced analyst studies use.…

The study also points to an interesting project by the Electronic Freedom Foundation (EFF) called Panopticlick, which tries to uniquely identify a user through information the Web browser can't hide, such as screen resolution, plug-ins, time zone and fonts. The EFF claims it can use that information to identify a browser returning to the site 99 percent of the time, even if it's in private mode. Fortunately, that still doesn't expose more information than a cookie.Read more...

Even when telcos get an industry-wide standard right and make it a profitable business--with text messaging, for example--there's usually a reason. "SMS was a technical feature of the GSM standard which was baked into every operator's infrastructure," one reader wrote. "Engineers from various European operators collaborated to build the spec. Business people weren't in the room. It wasn't even originally intended for consumer use. Only later did unanticipated revenue opportunities arise, when it was already built. Mobile payments are being led by business people at the U.S. operators--very unlikely to be able to agree to the commercials, let alone standards."Read more...

But, argues Franchisee Columnist Todd Michaud, this situation gets even more challenging because the person who had the implementation role before you could have stacked the deck against you. It is much easier to say "yes" to a request for something different than it is to say "no." In most cases, these requests will genuinely move the business in the right direction. But that's a double whammy: It means your predecessor may have created a field of variance landmines that you must painfully discover on your own.Read more...

Will they eventually have to turn to a whole new class of outsourcers who do nothing but check up on the big outsourced teams? And who will watch those watchers?

Or is this an overreaction to a disastrous but highly unusual event? A wholesale failure like the American Eagle debacle is big news because it's so rare. Datacenter disasters happen. There's no way to bring the risk to zero. And beyond making sure good practices are being followed, returns diminish quickly--you can suddenly find you're spending a lot of money to prevent something that almost never happens.Read more...

Please don't get me wrong. Mobile payment is a huge issue and some major players will need to jump in, but retail is the key. More precisely, retailers are the key. The issue of mobile payments comes down to sharing revenue, and it will require lots of trust. Now there's a word not typically associated with AT&T. Asking retailers "Who do you trust more, Visa or AT&T?" is like giving parents of 3-year-old twins a babysitting choice of Jeffrey Dahmer, Idi Amin or Osama bin Laden.Read more...

The initial problem was pretty much along the lines of what StorefrontBacktalk reported on Thursday (July 29), which was a series of server failures. But the problems with two of the biggest names in retail tech--IBM and Oracle--are what made this situation balloon into a nightmare.Read more...

In its latest earnings report, Amazon briefly mentioned a rather startling figure: “In the last twelve 12 months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device.” The knocks against M-Commerce investment has have been that it’s too early, that there are too few actual customers using it, that there are too few smartphones, and that consumers are using it to search and price-compare, but to not to actually buy.

Those who have resisted M-Commerce have said that screen-sizes are never going to compete with desktop machines and that the revenues M-Commerce will realistically deliver in the near-time could never cover investment costs. With one offhand remark, though, Amazon simply obliterates those arguments one billion times over. …

The site's problems, though, shed light on an interesting strategy. During the many days of complete Web site death, the $2.7 billion apparel chain's mobile site still looked alive, although it was not functional. This availability raises the question: Should retailers look to their mobile sites as emergency backups for their Web sites? Should pages indicating that a site is down automatically include a link to the site's mobile version?Read more...

That Requirement is 12.8.2, which states that merchants need to "maintain a written agreement that includes an acknowledgment that the service providers are responsible for the security of cardholder data the service providers possess." Some disappointing service providers seem to treat this requirement as an annoying inconvenience. They either pretend it does not exist or isn't their problem. The result is that you, the retailer, are caught in the lurch. Read more...

Oracle CEO Larry Ellison was the best paid executive with any public company over the last decade, pulling in $1.84 billion in compensation, according to The Wall Street Journal.

Concerned about all of the license fees you’ve paid Oracle over the years? Fear not. It’s been put to good use. You’ll be pleased to know that you helped financed several extra aircraft for Ellison. What to get the man who already owns Air Force fighter jets and an America’s Cup yacht? Oh, CIOs, you’ve given him so much already.…

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...

The problem is easy enough to fall into, which is the real issue. The nature of the certificates forces them to have strict expiration dates, which means that a 2- or 3-year-old certificate is likely to expire on the watch of someone other than the person who initially arranged for it.Read more...

For a retail industry populated with execs who learned their trade in pure brick-and-mortar environments, the vertical is embracing mobile and abandoning physical stores at an impressive rate. (With the infrequent exception–such as Pier 1–proving the rule.) The latest proof point comes from the announcement Tuesday (July 20) that $3 billion Liz Claiborne is shuttering the stores that bear its name.

Closing doors is one thing. But when those doors have the corporate moniker on them, it hurts. The company is keeping open its outlet stores for other brands: Juicy Couture, Lucky Brand, Kate Spade and Kensie. Legitimate pragmatic reasons exist for the move—such as Liz Claiborne’s distribution deals with JCPenney and QVC, along with its annual losses. But the decision is yet more acceptance of today’s new mobile and virtual realities. Physical stores are merely one channel today–and they are often no longer the most important.…