Evan Schuman's StorefrontBacktalk

Somehow, the system has evolved in a way that primarily protects the banks at the expense of retailers and, ultimately, customers. From a purely technological perspective, credit card transactions should cost a fraction of what they actually do. Read more...

Amazon on Thursday (Oct. 29) introduced Amazon PayPhrase, the first real acceleration of E-Commerce checkout in years, ever since one-click. But PayPhrase does one-click one better. Once set up, it allows shoppers to choose their own short phrase, which is then coupled with a password. After that, PayPhrase allows for purchases right from the product page. Amazon is pushing the very small group of retailers that have agreed to use Checkout By Amazon—including DKNY, Jockey, Patagonia, Buy.com, J&R Electronics and Car Toys—but the beauty of the rollout is that it fundamentally accelerates Amazon direct purchases by removing several key steps.

“Amazon.com customers can use their PayPhrase for express checkout wherever they see the PayPhrase button: on sites across the Web and on Amazon.com. Customers on Amazon.com simply find the item they want, type their PayPhrase into the PayPhrase button on the product’s page and click to instantly preview the total cost of their order, including shipping and tax,” said an Amazon statement. “No need to ‘Add to cart,’ ‘Proceed to checkout,’ sign in or type in credit card information. If the customer is satisfied with their order, they enter their PIN to complete the order.”…

You'll note, however, that no one is announcing deployments by major retailers or releasing detailed trial results showing that any of this stuff actually works. Vendor alliances are easy because no one has to show or do anything for them. That said, these partnerships--featuring Voltage, Heartland, Hypercom, Chase Paymentech, VeriFone and Semtek--are a start.Read more...

This week, Mattel--the $6 billion toy maker with brands including Hot Wheels, Matchbox, Barbie, American Girl, Fisher-Price and Tyco--joined those ranks and accepted channel conflict as it started selling directly through its Web site and social networking sites. The latest move will unveil a major Facebook presence for Mattel on Friday (Oct. 30). Read more...

The new ruling comes from a federal judge in San Francisco, who rejected the class-action settlement proposal for TD Ameritrade on the grounds that it didn't help the consumer victims sufficiently.

In both cases, the judges reversed positions they'd previously taken.Read more...

Amazon planned to have a California company with which it partnered, New Vine Logistics (NVL), handle the complex order-fulfillment hassles and legalities. That didn't quite work out as NVL, citing a "financial crisis," went out of business in July. Although Inertia Beverage Group subsequently purchased NVL, some have argued that NVL's problems played a part in Amazon's retreat from wine. This is not the first time Amazon has tried selling wine and been sidetracked by bad economic conditions. Back in 2000, Amazon bought almost half of WineShopper for $30 million. But the dot-com implosion that summer wound its way to the wine seller and brought stock prices into the cellar, too. WineShopper merged with another crushed grape E-tailer, Wine.com, and the combined company went bankrupt and was sold in 2001Read more...

Then there are negotiations. “You need to sharpen your pencil, I’m not paying this much.” Good IT leaders will work hard to deliver services at the lowest possible cost. But they need to be careful not to negotiate such a low price that the vendor will never be able to meet their expectations for service. Believe it or not, getting the lowest price is not always the right goal. By the way, if anyone is looking for someone to help negotiate a cheap, crappy IT service, Michaud knows plenty of people who would rock your world.Read more...

Online shoppers in the European Union (EU) often find better prices from retailers across national borders but find themselves unable to place orders, according to the European Commission. “On average, 61 percent of orders placed online in another EU country failed, mainly because the trader refused to serve the consumer’s country of residence or did not offer adequate means of cross-border payment,” said the commission on October 22.

Hoping to boost “borderless” E-Commerce in the EU, the commission wants online retailers to adopt domain names ending in .eu (the top-level domain for Europe) and to “create multi-country or pan-EU” commerce sites. The Brussels-based commission said E-Commerce sites with .eu domain names would help eliminate cross-border trade resistance that happens, in part, because of “national perceptions based on country domain names.” The commission has also vowed to better protect consumer data and said it will fight harder against counterfeit products.…

Somehow, this report just doesn’t add up. The premise comes down to the fact that a sharply increased bandwidth load will disrupt sites. That makes sense, but the argument that homebound workers and students will cause that sharp increase in bandwidth is where this argument falls apart. Read more...

A Boston geolocation vendor argues that different phone brands absolutely are linked to very different purchasing patterns and preferences. For example: "BlackBerry users are more likely to compare gas prices online than other smartphone owners. Users of iPhones, meanwhile, are eight times more likely to search for Starbucks locations than users of other smartphones."Read more...

For all the naysayers predicting an even weaker holiday shopping season this year compared with last year, Amazon.com has a snow-sprinkled Bronx Cheer for them. The giant E-tailer announced earnings Thursday (Oct. 22) showing a 69 percent increase in third-quarter profit on a 28 percent increase in quarterly net sales, which soared from $4.26 billion to $5.45 billion.

Even more interesting is its fourth-quarter holiday predictions. Rather than predicting revenue decreases, Amazon issued guidance that predicts sharp double-digit increases: “Net sales are expected to be between $8.125 billion and $9.125 billion, or to grow between 21 percent and 36 percent compared with fourth quarter 2008.” Either way, if you’re planning on scaling back your server farm because you’ve been led to expect a drop in holiday traffic, you might want to reconsider. …

Sure, social networking is a huge retail trend, but retail IT? "You don’t need IT to Tweet, but you sure will be buying an awful lot of software in 2011 that will analyze all this unstructured information," Roster said. "Now imagine a year down the road when I can go into a retailer and start tagging my likes and dislikes on any given product. It is just mind-boggling how rapidly software will be evolving within the next 5 years."Read more...

The well-publicized incident saw legions of T-Mobile Sidekick customers lose contacts, calendar entries, to-do lists and photos when a Microsoft subsidiary named Danger (nope, won't go there. Far too easy) suffered a glitch. Or as Roz Ho, the Microsoft corporate VP for premium mobile experiences, said in a statement: "We have determined that the outage was caused by a system failure that created data loss in the core database and the back-up." (You think?) Apple, Palm and others offer centralized backup for their mobile devices, too. But the data also stays on the device and, cleverly, backs up routinely to a customer-controlled device (typically a desktop machine). When thinking about the totality of data such devices collectively house, that very fragmented approach most likely preserves the overwhelming majority of the data. And if a customer's laptop fries, the mobile phone manufacturer or carrier is unlikely to be blamed.Read more...

"Our E-Commerce business processed through Digital River accounted for $650 million, or 36 percent of our consumer revenue in fiscal 2009. As compensation for their work, we paid Digital River approximately $95 million. These fees were classified as contra revenue. Thus, as a result of taking this E-Commerce business in-house, you’ll see our consumer revenue increase, driven by the elimination of this contra revenue," Symantec CFO James Beer said. "Conversely, the cost of running our own E-Commerce platform will be classified primarily in operating expenses with some amounts flowing through cost of goods sold. Therefore, operating expenses and cost of goods sold will both rise year-over-year." It gets even better.Read more...

This month, though, Amazon is learning through two unrelated initiatives that pushing the envelope can deliver one heck of a paper cut. The first is a feature designed to be very consumer-friendly, one that flags when a product is being sold for more than list price. The other is a global Internet effort tied into the non-U.S. rollout of Amazon’s Kindle e-book reader. Both initiatives seem to stem from a retail chain that intuitively understands technology and what can be done with it, without necessarily thinking through how the new elements will ultimately impact consumers and partners.Read more...

One site monitoring company this week reported that the 1-800-Flowers.com E-Commerce site was down for a whopping 65 hours and 26 minutes. The flower company didn't respond to our inquiries, but a fairly perplexed representative of the monitoring firm did. "To be honest, this is one of those rare cases where I’m not entirely sure if this is legitimate downtime, that is, downtime that regular human Web site visitors would notice," he said.Read more...

E-Commerce site operators have enough to worry about without fearing the sudden disappearance of the Internet. But that’s what confronted site operators in Sweden on Monday (Oct. 12). During routine maintenance of that nation’s top-level domain, “.se,” a tiny mistake caused the whole Swedish Internet to go dark. As documented by Sweden-based Web site monitoring service Pingdom, a script failed to include at its end a “trailing dot,” essentially a period. “That trailing dot is necessary in the settings for DNS to understand that “.se” is the top-level domain,” Pingdom noted. “It is a seemingly small detail, but without it, the whole DNS lookup chain broke down.”

The outage affected about 900,000 sites. Although the mistake was corrected within an hour, other factors kept many .se sites and E-mail addresses offline for almost a full day. “Imagine the same thing happening to the .com domain, which has over 80 million domain names,” Pingdom suggested. “Although not all of these are actually in use by Web sites or for E-Mail, the effects would still be huge and cause an unprecedented amount of downtime across the entire Internet.”…

For years, retailers involved in major data breaches had little to worry about from U.S. courts, thanks to credit card zero-liability programs. Those programs made sure that consumers didn't lose money from the breaches, which in turn made it almost impossible to successfully prosecute those retailers in civil courts. Civil courts are fundamentally based on making plaintiffs financially whole. But there's now the possibility that those retail protections could go away because a Maine judge—who is overseeing the data breach litigation involving Hannaford—has asked the state Supreme Court for permission to do so. This is the same judge who had earlier dismissed the accusations against Hannaford. He has since changed his mind. Read more...

But other issues are emerging about tokens. For example, the risk of storing convenient metadata in the tokens, info such as SKUs and exact time/place of purchase and CRM info. Although tempting, such convenience could prove disastrous if a retailer starts holding the data internally and then outsources without remembering to do an intense data cleanse. Read more...

We're also running a survey on how bad an uptime season retail IT and E-Commerce executives are expecting. The iPhone, AT&T, brand-new (and relatively untested) retail mobile apps and holiday shopping: A more perfect recipe for site outages the world has never known.Read more...

Starbucks’ recent problems with its iPhone M-Commerce application–specifically its inability to facilitate actual purchases—are the result of its preparations to replace the chain’s entire POS system, according to a vendor that has been in discussions with the coffee chain about mobile integration. From Starbucks’ perspective, it made little sense to integrate a mobile application into a system that was about to be gone, thereby forcing the mobile integration to have to be redone from scratch, said Jorge Fernandes, CEO of Mobibucks, a mobile vendor that, according to Fernandes, was in talks with Starbucks recently about a payment application.

Fernandes’ comment is consistent with suggestions from Starbucks headquarters managers—along with other Starbucks employees—that the lack of POS integration is a temporary issue, although no one said when or how the problem would be resolved. Starbucks did not respond to a request for comment on Fernandes’ remarks. Even if true, the question remains of why Starbucks didn’t simply delay the entire mobile application until the POS situation was resolved. Presumably, the chain wanted an iPhone application out in time for the holidays and believed that partial functionality was better than none. …

Tom Emmons, the mobile team leader at Sears Holdings, said that while the Sears and K-Mart mobile sites offer third-party payment options, including PayPal, he couldn’t envision adding Amazon as another way for Sears2Go or Kmart2Go customers to pay for purchases.Read more...

Some of these efforts are being artificially fueled by applications launched specifically for Apple's iPhone, while other retailers are getting their mobile acts together in time for this year's holiday season. J.C. Penny threw its hat in the ring by launching what it said was the first non-grocery system that can read 2D barcode coupons presented on mobile phones. The new imaging scanners were deployed at J.C. Penny store POS terminals in 16 Houston area stores.Read more...

But retailers pursuing such a strategy might quickly discover that, with payment, when one door closes another opens—and it's likely a trapdoor beneath your feet. For example, a secure route to bank accounts may indeed sidestep most—if not all—card fees for those mobile transactions. But it would also remove the liability shield that the brands' zero-liability programs offer.Read more...

In late September, Starbucks introduced two very different M-Commerce applications, both designed for the iPhone. One was for a very limited trial, impacting eight stores in Seattle and eight more in and around Silicon Valley (specifically Cupertino, Mountain View, Sunnyvale and San Jose).Read more...