Evan Schuman's StorefrontBacktalk

One convenience chain found that level of anonymity sharply boosted profits when selling triple-sized sandwiches and Pennsylvania is hoping that having a machine tell customers they're too drunk to buy wine will be less humiliating. But with data breaches an almost daily news story and data-sharing presumed to be everywhere, will customers continue to stay comfortable with sharing intimacies with kiosks? That question is being raised now with the latest push on clothing kiosks that use radio waves to take hundreds of thousands of measurements to deliver what the machine promises will be the perfect clothing fit.Read more...

Most current mobile-payment approaches—including the mobile wallet Visa announced this week—are still based on the payment-card accounts Visa currently makes its money from. But eventually someone will come up with a better way and leapfrog over the card companies. Then Visa will be stuck with a large, expensive network for real-time transaction processing. That could explain why Visa wants to use its new service to follow cardholders around from one retailer to another.Read more...

Do you have one of those impossible to shop for propeller heads on your gift list? Wondering what to get for the retail geek who has everything? Worry no more. A site called Barcode Gallery has just the thing. It’s framed artwork that depicts a giant 2D barcode. But it gets better.

The barcode is actually a secret message that the buyer chooses, and it becomes visible when using a mobile device to look at it. It’s the ultimate in geek-to-geek party communication. The message is limited to 300 characters, which I suppose is something for which we should all be grateful. Says the product’s creator: “The end result is the creation of a ready-to-hang piece of colorful modern art,” apparently using “modern art” as a euphemism for “strange geeky eyesore.” Then again, for that coder on your gift list, it may be a thing of beauty.…

A man arrested by police on Sunday (May 7) for assault and burglary in Pensacola, Fla., escaped from custody, while still wearing his handcuffs. His destination? The nearest Home Depot, where he went to get a bolt-cutter to de-handcuff himself. We’re guessing he heard that Home Depot was a do-it-yourself store. If he was more brazen, he should have stormed over to customer service, complained that the handcuffs he purchased from homedepot.com don’t work—as they won’t unfasten—and insisted they remove the cuffs right away. By the way, homedepot.com might want to check its search engine specs. Although the site does not sell handcuffs, a site search for handcuffs does return something. (Well, it has hands and cuffs, so maybe the search engine has a point.)

Speaking of strange retail stories, this one from satire site The Onion is really worth watching. It’s about a crime scene at Wal-Mart, with everyone—including Wal-Mart PR people—stressing that they don’t ever shop there.…

It's bad enough for retailers that smartphones can't be locked down against software changes. But terms like these (which are becoming the norm) mean payment-card transactions and many types of data that retailers may want to use would violate a mobile operator's contract—and could make smartphones practically unusable for in-store purposes. This assumes, of course, that the telcos opt to enforce these clauses, which were probably crafted with little thought about the likely mobile-payment world of 2012.Read more...

Even Visa late last year reclassified franchises for PCI purposes, bowing to the new realities. The issue behind almost all of these incidents is the struggle around who gets to decide IT moves within a franchisee operation.Read more...

When Square simultaneously accepted a hefty Visa investment and then reversed course to match Visa’s position last week, many observers were trying to make sense of the move. What made Square so attractive to Visa? One industry observer—longtime payments power-player John B. Frank—has an interesting, albeit non-traditional, take. He argues that Visa’s affection for Square has little to do with Square and everything to do with Twitter. Indeed, Frank’s argument is that it was all about Jack Dorsey (Twitter Founder/Executive Chairman and Square Founder/CEO) and his ability to make Twitter deals happen.

“Shout out to Verifone: If it makes you feel any better, I’ve got a feeling, that Visa isn’t as interested in Square as they are in Twitter’s 200 million base,” Frank penned. “If Goliath was going to invest in David, why not a David with a PCI-certified personal POS? It’s because David isn’t really David after all. David is Goliath. Square is Jack Dorsey and Jack Dorsey is again Twitter. It’s all about P2P (person-to-person money movement) and this is Visa making a brilliant P2P investment/move.” Not so sure I buy into this very original theory, because I don’t see Visa connecting the dots with Twitter that aggressively—yet. Still, if it’s wacky and conspiratorial and it involves Silicon Valley today, well, it’s hardly wise to rule it out.…

But Pepsi has now rolled out a touchscreen vending machine that isn't primarily designed to actually give you anything to drink. It's an interesting intersection between social media, vending machines and CRM. In a "tis better to give than receive" mode, consumers walk up to the machine and can only use it to gift a drink to a friend or colleague (or, for that matter, a bitter enemy) by "selecting a beverage and entering the recipient's name, mobile number and a personalized text message." This creative idea actually has some fascinating CRM potential. It exposes Pepsi to friends/associates lists and flags new people who might be open to receiving promotional contacts.Read more...

This is both good news and mediocre news. It’s good news in that major players are at least trying to tackle some of the toughest issues facing retailing today. (The other most challenging retail tech issue today—mastering social media content and marrying it with CRM data—is also being tackled this month, by Wal-Mart. Not unlike eBay's pragmatic challenges with local inventory, Wal-Mart is discovering that there's a reason social media data efforts are feared by so many in IT. It's genuinely difficult stuff.)Read more...

Automation is always about cutting out human labor, but just piling it on without fully integrating it into a store's operation is bound to generate problems—in this case, potentially huge problems. No one actually backed up a truck to haul away everything in the store. But that depended on the goodwill and honesty of customers, which is not something any chain can count on.Read more...

Starbucks has just issued an extensive report detailing all of the things it has done to support the environment. But one of the key environmentally friendly moves the company has made—its mobile payment effort—is curiously missing. Hey, if you’re going to get down to talking about using special lightbulbs, you would think that the deadtree-saving nature of not having printed receipts for those thousands of mobile purchases would at least get a bullet or two.

Starbucks, by the way, does deserve kudos for the candid way it handled the report. On the top of a chart with its goals and progress, it chose to lead with an item where it missed its goal—more than 15 times over. Its first goal was “to reduce energy consumption by 25 percent in our company-owned stores by 2010” and the reality: “Our electricity use decreased by 1.6 percent in company-owned stories in 2010.” The chain gave that goal a “did not achieve” icon. (Presumably, the “we didn’t even come bloody close” icon was too large.)…

We often poke fun at some of the leaders in the retail space. But every now and then, it’s only fair to point out true creativity. Amazon has a nasty habit of deploying really well thought-out efforts. On Wednesday (April 20), the E-tailer rolled out another of these “that’s such an obvious idea, that no one delivered” moments. Amazon launched library lending for its Kindle books. That’s not the cool part, though. No, these loaned literary lengths remember notes and pages you’ve looked at—and it will show them to you (and only to you) the next time you take them out.

The feature, which is slated to launch “later this year,” will only work at some 11,000 U.S. libraries. “If a Kindle book is checked out again or that book is purchased from Amazon, all of a customer’s annotations and bookmarks will be preserved,” said Kindle Director Jay Marine. “Normally, making margin notes in library books is a big no-no. But we’re extending our Whispersync technology so that you can highlight and add margin notes to Kindle books you check out from your local library. Your notes will not show up when the next patron checks out the book. But if you check out the book again, or subsequently buy it, your notes will be there just as you left them, perfectly Whispersynced.” Every now and then, Amazon reminds us why it is still the E-Commerce leader.…

The real difference in time—and there truly is one—has nothing to do with IT, authentication or any other technological issue. It's the practical reality that shoppers tend to keep credit and debit cards buried deep within their wallet/pocketbook, whereas they tend to either have their mobile phone in their hand or in a convenient outer pocket, easily within Bluetooth range. That extends the debate from whether a swipe or a wave is faster to whether the entire mobile payment process is easier and faster because of how people use mobile phones.Read more...

That disconnect between what developers built and what customers expected would have been unthinkable as recently as five years ago, when JCPenney's strategy was to use its Web site to drive customers to stores. But when a skunkworks team began work on the kiosk in the summer of 2009, the goal was to flip that, so in-store customers who couldn't find exactly what they needed could check the expanded assortment online—in Robben's words, "to extend the aisle to the online assortment."Read more...

Of course, testing RFID on just a few items means it's useless at checkout time—unless everything has a tag, you still need scanners for the items that don't. But it also means instead of trying to speed checkout, RFID is only being used to keep shelves stocked in specific categories of goods. By dumping the end-to-end goal, it may be possible to get more real leverage out of RFID—and keep the cost and supplier headaches down, too.Read more...

A wonderful New York Times piece a few days ago observed a decline in the number of fragrance spritzers roaming department stores. (Yeah, I am also guessing it was a slow news day.) “But today there’s growing recognition in the industry that aggressive spritzing offends too many potential customers. At a handful of department stores, fragrance demonstrators who pounce, spray and sell hard are being tamed. They may still flood the floor for debuts and other special events, but they are being gradually replaced by salesclerks who actually ask customers what scents they prefer and—gasp—listen to the reply.”

One has to wonder: Is the perfume spritzer potentially a role that a polite kiosk could take over? By its very nature, it would offer to smell up customers who approached it. It could also offer a stunningly wide range of perfume options, with customers asked to place their hands under a gentle spraying device. Would an automated perfume salesperson be an improvement? For anyone who has ever been sneak-sprayed, the answer is not difficult at all.…

The first reaction I had was, "This is one problem that will go away when real-time inventory is universal and available on mobile devices." Then the cynical side of me took over (that's the side with an historically much better batting average). If a chain's management decides that it wants to fool customers about inventory levels—for a wide range of nefarious reasons—wouldn't real-time inventory be the most marvelous and efficient way to do it?Read more...

Wal-Mart's announcement made it one of the first major chains to do away with the need for the customer to produce the dead-tree advertisement that Wal-Mart is being asked to match. But that paper document is being replaced—to a major degree—with associate discretion. Will shoppers be happy trading greater convenience for less consistency? The price-match change is part of a much bigger campaign, where Wal-Mart is trying to regain its low-price reputation. The chain is characterizing the price-match policy as "simplifying" and issued a statement that clearly said "customers do not have to bring in a competitor's advertisement. If customers find a lower advertised price, we'll match it at the register."Read more...

StorefrontBacktalk will launch its Premium Edition on April 18, just four days from now, on Monday. The reason we’re mentioning this again is to remind everyone that we are offering special 50 percent off pre-launch pricing. In other words, the exact same Premium service on April 18 will cost half as much on April 17. If you want to still have full access to all of our top stories (and all of the other goodies that come with the Premium subscription), doing it now is the cost-effective move.

Our site license options are also half-off during the pre-launch period (which has barely four days left). Our fear is that many readers will not focus on this until April 18, when they start running into firewalls when they try to read key stories and columns. And when they then subscribe, they won’t be able to take advantage of the pre-launch deals. The pre-launch deals were created specifically to give our long-time readers a break, so we want to make sure we do everything we can to remind everyone before it’s too late. To take advantage of our pre-launch deal, please click here.…

As that exec pointed out in a recent conversation, "Mobile POS is all trendy and cool right now, but it may not be the right answer to your problem." On the other hand, the possibilities don't have to be endless, especially if you start from what it's practical for mobile devices to do in your stores instead of starting with a device and imagining the possibilities.Read more...

Never before has a tax increase—a sales tax increase, to be precise—been so easily accepted by taxpayers, with hardly a newspaper editorial or a consumer group protesting. Rightly or wrongly (OK, it's wrongly), consumers in those states have been avoiding paying state sales tax and that's about to end. We would have expected at least a whimper from consumer groups. But even more surprising than the silence from consumer advocates (including newspapers and politicians seeking re-election) is the remarkably muted defense from the E-tail community, beyond Amazon.Read more...

Old breaches never die, they just—well, they never die. A small bank in Illinois on April 1 announced that some customers’ payment card information had been compromised at card processor Heartland Payment Systems. Yes, that Heartland. And yes, that breach—the one in 2008. “MasterCard and Visa, along with the FBI and Secret Service, have been investigating the incident for several years, and although the security breach is reported to have occurred between May 2008 and November 2008, the compromised information is only now being used to conduct fraudulent transactions,” Freestar Bank President Scott Bauknecht told a local newspaper.

That means that, more than two years after the breach was closed and the first arrests were made in the Heartland case, the thieves are still working their way through the trove of stolen card numbers. Holding onto the numbers that long is a gamble for the thieves, of course, because many of the cards could expire or be canceled over that much time. Then again, after two years without any fraudulent activity, banks and retailers will almost always assume that a card number hasn’t been stolen. That assumption may not be safe again for a long time.…

Meanwhile, Sprint—which was left out of ISIS' announcement of its formation in November—now says it was originally part of the group, but left. Although ISIS member Discover was originally presented as the only payments network ISIS needed, it now appears that Discover may not have an exclusive deal with ISIS after all. All this confusion comes in the face of one clear fact: Mobile operators should have the easiest time doing true mobile payments. When will they get their collective act together?Read more...

The breach at the chain, The Briar Group (The Lenox, MJ O'Connor's, Ned Devine's, The Green Briar and The Harp), impacted at least 125,000 MasterCard and Visa customers, the state filing said. Other security naughtiness alleged: using the default usernames and passwords from its Micros POS systems, opting to not change network passwords "for more than five years," allowing those username/password combos to be "used system-wide for all users" and then not changing passwords after employees quit or were fired.Read more...

If the accusations are true, then the network engineer certainly engaged in decidedly naughty behavior. But in terms of engaging in proper security procedures—especially if there was any payment-card data lurking in those servers—there's plenty of black coal to go around. Gucci's IT staff was "tricked" into activating a VPN token for a non-existent employee? That must have been some trick. How difficult is it to look up an employee and verify with a known manager that he/she needs that access and, by the way, actually exists?Read more...