Evan Schuman's StorefrontBacktalk

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...

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...

What makes this disconnect worse is the real reason mobile wallets need CRM/loyalty functionality: Shoppers have no problem with existing loyalty cards, because they just don't use them that often. The retailer benefit in mobile loyalty cards is clear: much greater use of CRM. But the benefit for shoppers? That's much more amorphous.Read more...

The M-Commerce implication is one of those good news/bad news/good news situations. Good for M-Commerce: One of the more daunting obstacles for M-Commerce is infuriatingly short battery lives—and the Wi-Fi offerings of places like Starbucks only shortens those lives further. So from the perspective of "this is a good place to literally recharge my batteries," it could help M-Commerce. On the Bad for M-Commerce side: Unlike plugging a smartphone or tablet into a laptop's USB connection to charge, the wireless charging pad approach pretty much prevents the user from actually using the mobile device while it's being recharged. Read more...

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. …

The potential here isn't just to track generic music influences. The stores can already play different songs in different areas of the store and specific dressing rooms, with the sound bleeding out of the store and into the mall. What if specific songs influence—or attract—shoppers focused on specific types of clothing? Which tunes pull in tire-kickers and which are good buyer lures? Critically, though, this is all based on the psychology of how teens interact with apparel. It has very little to do with actual tailoring.Read more...

How about the fact that those mobile stores will also be pushing customers to buy a new phone as long as they're already in the store? And yes, we're sure that will make retail chains feel warm and fuzzy about Isis, too.Read more...

In each case, PIN pads were physically compromised, one per store, in dozens of stores clustered in specific geographic areas. The PIN pads were apparently tampered with during the spring and summer months, and tampering was limited to the countertop devices. How likely is all this to be coincidental? Not very.Read more...

But the six-month French trial that has just started is taking the efficiency goal one step further, by marrying a contactless smartcard—which holds the biometric data—with the POS-affixed biometric scanner. The retailers estimate that the contactless card's transmission will be intercepted by the POS authentication element from two meters away, which is about 79 inches or about 6.6 feet.Read more...

Shoppers who tried finding the details on target.com were locked into an endless loop. Clicking on the link provided on the chain's news page took shoppers (and us) to a "More reasons to love Target" page, which had a link taking us to an "Our low price promise" page, which looped back to the "More reasons" page. As of Wednesday (Oct. 24), Target had finally inserted an updated price-match page, complete with details, into that loop. The details, though, paint a very different picture than Target's announcement did. For example, the program has a "limit quantity of 1 online price match, per identical item, per guest." So if a shopper has two children and wants to get them the identical toy, and if that toy is being offered at Amazon for less, Target will only grant the lower price on one of them? Read more...

As more chains struggle with fully embracing merged-channel operations, we have a delicious contradiction. The benefits of such a merged-channel approach are definite and intense. However, the risk of damage being inflicted by a less than precise execution is equally certain. Hence, it’s a path that needs to be traveled—but oh so carefully.

StorefrontBacktalk and ChainLink Research have collaborated on a report that looks at some of the less-covered pitfalls and opportunities of this approach. Take a peek.…

Yes, Apple sells a $30 adapter for plugging old-style peripherals into the Lightning port. But such adapters won't work well with card sleds, so stores could end up needing two types of iPads and two types of sleds. And that's the type of thing that drives central IT support crazy, because the sled that just broke is always the one you're out of.Read more...

Shopkick didn't say how it is interacting with the inventories of its retail partners. However, given that the catalogues from each retail partner are relatively small, there's little need to grant access to the full inventory. All a chain would need to do is broadcast to the Shopkick app the inventory status of the couple dozen SKUs it is currently pushing in its mobile catalogue. This would be a relatively easy task. And although security is always a concern, the tiny number of products being shared would make that information of trivial value to rivals.Read more...

As the owner of brands Kraft, Maxwell House, Oscar Mayer, Nabisco, Planters and JELL-O discovered, NFC was the winner. NFC's engagement level was a dozen times greater than QR codes, and engagement time was 48 seconds for NFC compared with 5–10 seconds for QR. But NFC excludes many older phones and—crucially—all Apple iPhones and iPads. For many reasons, that's a dangerous segment to ignore.Read more...

Yeah, that's the type of motivational shopper message Best Buy wants to send out: "Come on over to Best Buy for the holidays. And if our sales reps feel like matching your Amazon.com price, they will. Trust us." The motivational value of price matching is rooted in its certainty. You can have as many published limits as you'd like (and, yes, both chains have certainly done their lawyers proud with impressive limits of every type). But the point is that a customer who brings in a rival's price that meets those limits will absolutely get that price.Read more...

Had the court found him not guilty, it would have sent a message that shoplifting requires some proof of illegal intent. NYC sees a huge number of shoplifting charges every year. The city can now expect a lot more, unless retail loss prevention operations suddenly get a lot smarter. This is far from solely an LP issue, though. News of this arrest can seriously reduce consumer willingness to try mobile payment at any retailer. Certainly the consumers we've mentioned this situation to had the reaction, "Well, I think I'll be whipping out Mr. MasterCard for any of my Apple purchases from now on. It's slower, but it sure beats jail if I happen to hit the wrong button or forget to hit the right button."Read more...

And it can't be created the same way Visa and MasterCard were, because that's now illegal. If the MCX retailers' alliance wants to beat the card brands, that's going to require some seriously new thinking—and it should probably start with loyalty.Read more...

Don't be so quick to conclude that your people aren't doing this, though, as it extends way beyond rent-to-own. Many current—and many more future—devices will have technology that enables post-purchase information capture. For example, RFID tags that aren't disabled before the customer leaves the store might enable retailers, marketers or others to capture data from those devices without the consumer's knowledge or effective consent. And don't get Legal Columnist Mark Rasch started on mobile.Read more...

That's way outside the traditional scope of an E-Commerce president. Then again, Durchslag's lack of retail experience and tech background might explain much of his optimism—and his scope creep. And he's still up against Best Buy's reputation as a victim of showrooming, unknowledgeable associates, high prices and the customer perception that it's the electronics retailer of last resort—after Amazon, Walmart, Target and Costco have turned up empty. Durchslag understands some of the huge perception issues his team must overcome. "Showrooming is a symptom, not a cause," he said. "It's arrogant to think that you're going to cause or prevent that kind of behavior. It is a reality that is happening today. The only question is: Are you going to harness that and make things easier, or are you going to try and put your head in the sand and deny reality?"Read more...

The advantage seems pretty obvious: Using an app on a phone or tablet means a store manager or associate can see what changes look like as they're made, avoiding embarrassing differences between what appears on a PC's screen and the display. The equally obvious downside: You're trusting your public face to the security of a smartphone.Read more...

We were hoping this week to find out when Isis will finally launch its mobile payment trials in Salt Lake City and Austin. No such luck: “Imminently” is all Isis Chief Commerce Officer Ed Busby would say at a presentation in New York on Wednesday (Oct. 10). But Busby did pass along a comment that crystallizes the problem chains have with the mobile-operator consortium, as well as with Google Wallet and PayPal: “I have a friend over at Banana Republic. He always tells me, ‘Ed, why is it everybody is knocking on my door all the time saying they can give my gross margin away faster than everybody else?'”

That’s how chains see Isis and its rivals? No wonder retailers aren’t pushing mobile payments at POS. Coupons and promotions (which the mobile payments guys love) eat margins. Mobile payments aren’t offering much-hoped-for interchange relief, either. That suggests mobile payments players need to start scrambling. Should they help enable loyalty first and ride payments on loyalty’s coattails? Or make it easier to use phones as in-store customer trackers? Or promise to give chains more and better CRM data? We don’t know. But without something serious in it for retailers to encourage a serious retailer push, there won’t be any mobile payments—Isis or not.…

The lack of cash payments rips into tips, which hits employee compensation. Not only are tips employee compensation that the retailer doesn't have to fund, but tips can enable employees to be paid less in salary. Mobile payment has far greater convenience, but its ability to undercut tips is something few retailers have seriously considered. Clearly, this is important to Starbucks. It's important enough for the company to violate one of the golden rules of mobile app announcements: Never announce a capability before it's deployed, especially as many as 11 months before it's deployed.Read more...

In the otherwise futile battle against showrooming—do you really think making it

harder for your shoppers to compare prices on their mobile devices isn’t going to backfire?—some chains have started to get clever. Perhaps the motivation is ill- advised. But if the results are helpful to both shoppers and retailers, why complain?

Target’s QR endcap move is a fine example. Although it is only one of many, Target’s efforts are the topic of StorefrontBacktalk‘s October monthly column in Retail Week, the U.K.’s largest retail publication. The column lives here at Retail Week. For those who don’t have a Retail Week subscription—shame on you!—here’s a copy at StorefrontBacktalk.…

Maybe it's the Walmart mystique.Read more...

Back in May, we told you about a train-station grocery trial by online grocer Peapod, which was itself a direct steal from a Tesco QR code subway trial in South Korea. The Peapod effort started at 16 stations in the Chicago and Philadelphia metro areas. Here's the unexpected part: On Monday (Oct. 1), Peapod expanded the trial to more than 100 locations. The expansion—adding Boston, Connecticut, New York, New Jersey and Washington, D.C., commuter rail stations to the test—is impressive in its scope. And it means someone at the retailer must have seen some powerful numbers.Read more...