Evan Schuman's StorefrontBacktalk

Some news stories, having picked up on a published U.S. Federal Trade Commission (FTC) Q&A, said that Best Buy wasn't being generous, that federal law required that the consumer could keep the extra iPads and not pay for them. Like almost all matters legal, pens Legal Columnist Mark Rasch, the truth is not quite that clean. The laws referenced are intended to punish retailers from shipping items to people who bought nothing and then trying to force them to pay. A shipment in error—especially one to a legitimate customer—was never envisioned, nor was accidentally sending a larger quantity of that which was legitimately being purchased.Read more...

Didn’t we learn this lesson last year with Best Buy? On Black Friday morning, a Houston-area couple got up at 2:00 AM to order thousands of dollars’ worth of appliances from Sears. They got their order confirmation E-mail, went back to bed—and woke up to find another E-mail telling them their order had been canceled. Then the appliances were delivered, but charged at the regular prices thousands of dollars higher. It took a local TV station’s cage-rattling to get Sears to honor the Black Friday prices.

Sears’ explanation—the system sent confirmations before checking inventory but sent the cancellation E-mail almost immediately—misses the point. It’s 2012, not the dawn of E-Commerce. Inventory is online. Customers don’t need to be reminded that they just placed an order, only notified that their order will be honored. There’s no reason for two E-mails, nor is there any excuse for confirming an order by E-mail before checking inventory. That will take an extra 30 seconds? Five minutes? It’s E-mail. Nobody expects sub-second response times, not even customers. They do expect a “confirmation E-mail” to confirm they’ve made a purchase—and it’s long past time for retailers to get that message.…

The Web site, where a company "publicly" advertises its goods and services and shows its prices, is similar to the brick-and-mortar store. However, unlike the store, access to the Web site is granted subject to a "contract" between the merchant and the visitor, typically a "Terms of Use" agreement linked to on the bottom of the homepage. Visit the site, and you are agreeing to these terms. Violate the terms, and you are visiting the site unlawfully, exceeding the scope of your authorization to use the site. Or, in legal parlance, violating the computer hacking statute, 18 U.S.C. 1030.Read more...

This new pricing transparency could severely undermine the purchase behaviors these optimized prices were supposed to cause. Will shoppers wait out fluctuations, knowing that prices will eventually drop sharply again? Will the dizzying speed of the changes make them ignore the price wars entirely and default to the chain and products they're most comfortable with? Should this new shopper pricing transparency change how retailers use pricing optimization? Chains today are soon going to have three buckets of pricing optimization options to crunch: internal, such as inventory level, close-outs, slow-moving SKUs, manufacturer incentives, etc.; external, such as competitor price monitoring or what rivals are running out of; and customer/CRM, which is individualized pricing based on a shopper's purchase history, cart assortment and demographics—for both online and, ultimately, in-store pricing.Read more...

Such flaws could be more easily overlooked were this a minor promotion that no one has focused on. But stickers for Merry Christmas, America adorn almost every door to JCPenney stores, and the promotion involves almost every associate and customer-service desk. The idea is that customers ask associates for some holiday-themed pins (three to a customer at any one time seems to be the rule). The back of the pin has a sticker with seven numbers and letters on it.Read more...

The mail agency also won't be allowed to do more than $50 million in business in the trial or expand it without more regulators' approvals, which rules out a rapid ramp-up to other cities. The last thing same-day needs is a regulatory straitjacket—but that's exactly what the USPS' service and the chains that use it will be saddled with.Read more...

The Amazon financials (which were supposed to be confidential) showed 2011 U.K. sales of $5.36 billion, which is just a tad higher than the $331 million in revenue that Amazon UK officially reported and paid corporate taxes on. But that playing-field line—and the obvious irritation of MPs on the Public Accounts Committee—makes it pretty clear Amazon has more trouble ahead.Read more...

One new element here is Visa's use of various phone and tablet attributes to try and authenticate the device being used. (Sign of the times: In Visa parlance, laptops are no longer considered mobile.) "There are more than 100 different fields that we can get back from a particular device," including frequency, operating system version, the existence of antivirus software and physical location, said Mark Nelsen, Visa's head of risk and authentication product development.Read more...

Statements released in New York, Chicago, Dallas and Los Angeles said they were all "experiencing a trend in unfavorable weather, violent acts and pricey travel options" and specified "Pepper spray attacks, trampling, ruined stores and mass hysteria." For New Yorkers, a statement reminded consumers that "last year, the city saw riots outside stores in SoHo during the early hours while a 4:00 a.m. stampede in Herald Square frayed tempers and teams had to be devoted to directing shoppers like rush-hour traffic. Every year scores of shoppers get caught out by the alternate parking rule, mistakenly thinking that it does not apply during the retail bonanza." It's certainly fair game to tout the convenience of E-Commerce, but this is the first we've seen an E-tailer slam physical holiday shopping so directly.Read more...

The issue is not unique to PCI. Innovations in retail technology happen everyday, but standards adapt to these changes much more slowly. Every retailer lives in this situation. A mobile app works great, but it is not PCI compliant. Web orders get outsourced nicely, but processing mail order and telephone order (MOTO) transactions on a workstation either means lots of network reengineering, separate devices or lots of increased PCI scope (or all of the above). Sometimes, PCI compliance and security even seem to be at odds with each other. What is a merchant to do?Read more...

Visa officially went live with its V.me online payment service on Tuesday (Nov. 13), and there’s a lot to be underwhelmed about. After a year of testing the service—in which customers type in a login and password at an E-Commerce site and have all their payment and delivery information automatically filled in—V.me’s marquee E-tailers are Buy.com and 1-800-Flowers.com, along with about two dozen more. Visa has also lined up 50 banks (the best known is U.S. Bank) with a total of about 55 million card customers.

But

none of that may matter, because Visa is counting on the banks to promote V.me to their customers. Yes, the same banks who have sent millions of contactless cards to their customers without telling them they were contactless cards—that’s who Visa believes can convince cardholders to use a service they’ve never heard of instead of PayPal and Amazon. The likelihood they’ll ever hear about it in a meaningful way from their card-issuing bank? Just slightly less than V.me’s infinitesimal chances.…

Johnson's comment points to a hole in the legal minefield of marketing to children. Federal law strictly restricts and all but prohibits online marketing and tracking of children younger than 13 (once they become teenagers, the government—and parents around the world—have pretty much agreed that it's time to surrender). But there are no such restrictions in-store. Ironically, the reasons Congress agreed to restrict online activity are, today, probably more relevant to in-store, thanks to mobile.Read more...

The problem: Target's giftcards don't move easily between the chain's in-store, E-Commerce and mobile systems, each of which is in its own silo. Putting QR codes in-store to let people buy electronic giftcards is a fine, no-fuss step—but then making it particularly tedious to move those cards to the recipient's preferred channel is not the way to make those new customers happy with Target.Read more...

Stores in this area of New Jersey—StorefrontBacktalk's main office is in the heart of Sandy's path—are used to outages of a few hours and maybe, during severe situations, maybe one day. The bad news: With global weirding (the term for the many strange weather patterns caused by global warming), there's a fine chance these week-plus outages may be something that has to be planned for. With that in mind, let's look at what some of the chains—including Best Buy, Target and Starbucks—discovered when they could only exist via emergency generator. It meant POS without network (no debit, no gift cards, no returns, no lookups) and few ways to tell customers what they couldn't do.Read more...

At a glance, retailers might be inclined to dismiss this price match as something akin to what Visa, MasterCard, American Express or Diner's Club might offer and not at all related to what a retail chain might do. Although PayPal is indeed a payment device, its in-store retail efforts—where PayPal offers to handle POS purchases at Home Depot, JCPenney, Abercrombie & Fitch, Toys"R"Us, Foot Locker and Barnes & Noble, among others—make it something that can't be so easily dismissed. For the doubters out there, note that the program stresses it covers both in-store and online purchases.Read more...

No, this program has everything to do with getting E-tail shoppers into the stores. And, along the way, it has become the exact opposite of the original idea of merged-channel programs, where shoppers were encouraged to shop in whatever way was easiest and most efficient for their situation and the purchase's particulars.Read more...

If paying with a mobile phone isn’t any easier than just using a card in-store, maybe it can at least improve the mobile-commerce buying process. That seems to be the idea behind a trial MasterCard announced on Wednesday (Nov. 7). In the Netherlands-based test (which actually began in mid-October and runs through March 2013), an NFC-equipped phone can be used to make M-Commerce purchases, with the phone sending an EMV-compliant cryptogram to complete the transaction after the customer selects a payment card and keys in a PIN. In effect, it’s Chip-and-PIN over the phone.

That’s slightly easier for customers than having to key in the whole card number and slightly safer than the merchant storing the number. But the real value to retailers will show up if MasterCard declares that its own EMV solution qualifies M-Commerce transactions for card-present interchange rates (or at least for the EMV-based liability shift). In that case, online merchants may suddenly be very interested in offering customers that option. If not—well, there’s always room for yet another NFC payments approach that retailers have no reason to adopt, right?…

In an October sampling of some 7,000 products shown on the 10 largest E-Commerce sites in North America and the U.K., 29 percent of the SKUs did not include the manufacturer’s name and some 8 percent offered up details that were simply wrong, according to a report released Wednesday (Nov. 7) at a Paris tradeshow. The fact that SKU GS1 data is imperfect is hardly a stunner, but the large number of defects was interesting. That missing manufacturer data, for example, could exclude products from a Kraft-specific search result. For the chain itself, it could interfere with analytics of which supplier’s products are moving well.

The study, performed by vendor Clavis Technology and GS1, looked at 500 brands and 7,000 packaged food/beverage products across 23,000 Web pages. One of the biggest numbers the report stressed was that 67 percent of products examined were missing information. But that could go either way. Were products dinged for not including marketing copy or other non-sales-essential datapoints? Another good figure: 14 percent did not include any ingredients. That could be a costly omission, if a product containing an allergen—a nut product would be the most obvious issue—was purchased and eaten after the shopper did a search excluding anything that had peanut in its ingredient list.…

Which raises an interesting question: What exactly is Amazon testing here?Read more...

So much for the enduring power of big-box brands. On Halloween (Oct. 31), the owner of Circuit City and CompUSA’s brands decided to kill the online remnants of

the former chains, redirecting traffic to TigerDirect.com. Systemax bought CompUSA’s Web site and 16 stores in 2008 for $30 million, picked up Circuit City’s intellectual property and some stores in 2009 for $14 million, and then relaunched the E-Commerce sites. Now Systemax will spend even more money to bury those brands.

It’s not clear how much the brand-kill decision may have been influenced by terms of the Circuit City brand acquisition, which required Systemax to pay a certain percentage of all revenue generated under the Circuit City name. Still, both these names were legendary just a few years ago, and Systemax paid millions for the names. Less than five years later, they’re apparently no longer worth the trouble. It looks like the half-life of big-chain brands is shrinking fast. After all, when was the last time you thought about Borders? And that was just a year ago.…

Several online retailers, including Apple, eHarmony and Ticketmaster, were sued in a class-action lawsuit that claimed their collective practice of collecting certain personal information—including consumers' names, street addresses, telephone numbers and E-mail addresses—violates the provisions of a 1971 law that precludes the collection of personal information about users of payment cards. The E-tailers are arguing before California's highest court that the 1971 law didn't contemplate online transactions, that prohibitions on merchants "writing down" consumer information don't apply to data entry into a computer databases and, besides, they need this information to authenticate users and prevent fraud, pens Legal Columnist Mark Rasch.Read more...

For those few critical days before Christmas, any same-day delivery for last-minute orders could be a high-margin bonanza for retailers. But for the rest of the year, the customers already know what they expect when they order something for quick delivery. And the benchmark to beat isn't Amazon. It's Domino's.Read more...

The original idea of card-not-present was simply a way to justify a higher interchange rate for less-secure transactions. The premise was that fraud is less likely when a magstripe card is swiped and potentially examined by an associate than it is when a shopper types numbers into a browser or tells them to a call center rep on the phone. But what happens when the card data is authenticated and used repeatedly—a la iTunes, PayPal and many mobile apps? What if the card is physically swiped and that data is then stored on the phone? Card-not-present is only meaningful today in one respect: In a few years, mobile payments will indeed likely make almost all cards not present.Read more...

At the Web site for $85 billion grocer Kroger, the site makes its best guess for the customer’s location. But this week it identified a New Jersey customer as being in Missouri and located an Oregon visitor in Texas—off by more than 1,000 miles each time.

Was that a storm-related glitch? We’re still waiting for an answer from Kroger, and we know that location feature has worked fine for at least some shoppers in the past. But considering how critical geolocation is in merged-channel retail (where’s the closest store? What’s on sale right now?) and the fact that IP addresses can often be tied to other CRM data, this may be a good reminder of how tricky outsourcing location services can get. Even if your datacenter is safely out of harm’s way, an outside location provider can still be inside a disaster zone and may need its own third-party help—and end up scattering your E-Commerce credibility all over the map. So many other things can impact location accuracy: A VPN can throw it off, and an ISP’s own disaster plans can alter where others think your customers are. Then again, it’s not especially onerous for customers to fix their location, as long as the site makes that at an easy fix.…

A little late October housecleaning here at StorefrontBacktalk. First, a quick reminder: StorefrontBacktalk now has five free Monthly newsletters, each one focusing on a different key area for you: E-Commerce, Mobile, PCI/Security, In-Store and CRM. The Monthlies—see the descriptions here—are available to anyone via a quick E-mail sign up and the November monthlies will publish next week.

The Monthlies are a great way to catch up on all the news in a given area. So before you miss the November Monthlies, sign up for your free copy—and remember, you can sign up for multiple topics. Finally, a quick thought for Kindle users. For those of you who have not yet subscribed to our Kindle feed, it’s not bad for convenience while traveling. You’ll get the latest on retail tech, E-Commerce, mobile and security beamed into your Kindle when you’re not looking. …