Evan Schuman's StorefrontBacktalk

Buying items on Tesco.com, the E-Commerce site of the $84 billion, U.K.-based supermarket chain, is a bit like being a virtual marionette operator. When a Web shopper places an order, Tesco employees actually grab shopping carts and pluck items from shelves as they stroll up and down aisles in Tesco stores. Most of those online order fulfillment missions are currently conducted in busy, public Tesco markets also occupied by meandering shoppers. But Tesco is so pleased with its use of customer-free “dot-com store” installations–facilities nearly identical to its regular markets, except that are for use only by Tesco.com order-fillers–the chain plans to erect a large network of them, according to the Daily Telegraph of London.

It said Tesco now has two so-called “dark stores” up and running, one in Surrey and another in Kent, and plans to open a third, next year, in Middlesex. Laura Wade-Gery, Tesco.com CEO was reported as saying the company intends to open one new online order fulfillment store yearly “for the foreseeable future” and expects the employee-only structures will be handling 15 percent of online order fulfillment by 2014. Tesco currently processes 475,000 online orders weekly and operates a 2,000-van fleet for home deliveries, said the Telegraph.…

The case involves four Louisiana restaurant groups—doing business as Crawfish Town USA, Don's Seafood and Steakhouse, Picante’s Mexican Restaurant, Mel’s Diner Part II and Sammy’s Grill—suing their POS vendor, Radiant Systems (which owns the Aloha POS systems used by these chains), along with systems integrator Computer World (not to be confused with the publication Computerworld). But when you drill into the details of the lawsuit, it gets more interesting. One of the key accusations against Computer World is that it used vendor default passwords for systems with many of these restaurants, for easier remote administration. The lawsuit correctly points out that PCI bans retailers from using such vendor default passwords. But that's the key. It's the retailers that are not permitted to use these defaults. Was integrator Computer World, in this scenario, acting as an agent of the POS manufacturer—as a reseller—or as an agent of the retailer--as an integrator?Read more...

But there's a way to fix this. Historically, many franchisees have not been allowed to launch their own Web sites, have a Twitter feed or do a blog about their stores. Michaud used to believe that it was extremely dangerous to let franchisees have their own voice on the Internet. Today, he embraces it. It's not only good for business, but it's the first step in IT becoming a coach, an instructor. In short, becoming someone other departments see as a partner and not as mere interference.Read more...

Domino’s is seeing a huge increase in online sales—a critical and fiercely competitive arena for national pizza chains today—after it allowed consumers to see a real-time interactive graphic that depicts their pizza order, adding or subtracting toppings and the corresponding price adjustments. It also throws in some impressively detailed product status information, “with updates on when a pie enters the oven or leaves a store.” But the requirement of a new $20,000 POS system for each of its 5,000 franchisees and company-owned stores in the U.S. was a bit difficult to swallow.

Also, according to this well-done story in The Wall Street Journal, those new systems were apparently delivered with extra glitches. “We built a system by trying to do 1,000 things, but 500 of them didn’t work. We had a real crisis of quality,” Domino’s CIO Christ McGlothlin said. “We had to make sure the 20 basic things the system needed to do would work, so the first year all we focused on was getting those basic things working flawlessly.” An example of an early problem: “One franchisee had organized delivery maps in a way that didn’t work with other franchisees’ maps. Another franchisee sorted his employee time sheets in a way that wasn’t compatible with the rest of the system.” All in all, it’s an interesting read.…

Conway's concern is the almost inevitable fourth quarter 2010 PCI train wreck as the new rules collide with human frailty and the calendar. The result may be that even some Level 1 merchants and processors don’t get their assessments (and ROCs) completed on schedule.Read more...

Restaurants are, by their nature, very different from most other retailers (to the extent that they are considered retailers at all). They tend to attract a strongly local customer base, so if another restaurant is just a few ZIP codes away, it's not likely to be too competitive. That could make the downside of such a program—giving dollars away to rivals—less of a problem. But the radical idea of such a joint gift card does address the fear of bankruptcy, which is what the Connecticut Attorney General stressed when his office announced the Connecticut card.Read more...

In what a senior company official conceded was an oversight, the 430-store, New Jersey-based chain failed to publish any ahead-of-time advisories before yanking its E-Commerce site's plug in the wee hours. Nor did it post much in the way of an explanatory statement during the long downtime period that followed. "The messaging on the site could clearly have been better," Burlington Coat Factory Supervisor of Web Development Jack Follansbee said. "It was an omission. We should have done something (a status page) a little more customized."Read more...

As at most companies, Michaud's past several weeks have been largely focused on preparing our budget for next year. There are three major challenges that a franchisor faces when creating an IT budget: Franchisees are not involved in the budget process; a franchise chain has additional responsibilities over and above a traditional IT shop; and in many companies, the budget process (and the associated project prioritization process) is broken.Read more...

At its simplest, out-of-scope means beyond jurisdiction; it means that whatever is being discussed no longer falls under the rules and requirements of PCI. One critical problem is that the brands and the PCI Council giveth and they can taketh away. In other words, if you've started sharing some, for example, tokenized data with marketing because a temporary out-of-scope ruling makes you comfortable doing so, you find it almost impossible to undo should that ruling be reversed. Put more philosophically, you won't likely be able to get the clear-text toothpaste back into the "they're going to fine me from here to Shanghai, aren't they?" tube.Read more...

The 63-year-old Willett has been at Best Buy since early 2004 and is leaving with the title of CEO, Best Buy International. He had served as corporate CIO, a title he held along with the CEO International title until Neville Roberts assumed the CIO title in late May 2009. But the way the retirement—slated to go into effect December 31—was announced was unusual.Read more...

A couple of years ago, Near Field Communication was seen in some influential corners—such as at consumer goods giant Procter & Gamble—as the ultimate victor in the fight between NFC and 2D barcodes. Many saw NFC as the better technology, with 2D barcodes being used as a placeholder until NFC was ready. But in the last couple of years, neither technology has gotten very far in the U.S. Few phone manufacturers included the feature and even fewer developers tried to design for it.Read more...

With all of the recent fuss about PCI requirements and how to protect payment cards, many companies have opted to take a far too narrow view of data protection. The PCI rules are absolutely designed to only apply to payment cards. But the same common-sense security guidelines will also dramatically help the security of CRM databases, personnel files, E-mail servers, payroll details and even the full contents of your Web site.

In this week’s Guest Column on the new McAfee security blog, a reader describes a run-in with a nervous customer who had lost a ton of data because he hadn’t been doing a backup. Why? It didn’t include payment data, so he ignored all of the PCI guidelines he was following elsewhere in the system. So what was so important about this non-PCI-oriented data? “It’s the flight maintenance records for our entire fleet of aircraft.”…

The easy path is to be very lenient. Offer access to anyone receiving the E-mail announcing the event. If that person posts the URL and perhaps the password—for that one event—on Facebook, Twitter and LinkedIn accounts, let it happen. So the audience is somewhat diluted. If those others buy stuff while attending the event, what’s the harm? The intent of an invite-only event, however, is to be able to control the attendees, perhaps to reward excellent customers. More likely, though, the invite-only approach is to lure a very lucrative small subset of your audience to a virtual gathering where you can flood those people with highly targeted promotions. Maybe a key supplier wants to pay you for access to that subgroup?Read more...

Many of the Supreme Court justices expressed significant skepticism about whether the current system should be maintained. Questioning one attorney about a financial approach patent, Justice Anthony Kennedy raised a Congressional intent argument. "In your view, clearly those would be patentable: the explanation of how to compile an actuarial table and apply it to risk. It's difficult for me to think that Congress would have wanted to give only one person the capacity to issue insurance." The newest member of the court, Justice Sonia Sotomayor, asked how far process patents could go. "How do we limit it to something that is reasonable? Why not patent the method of speed dating?" Read more...

The problem is only getting worse. First, technology vendors are creating new features and functionality much faster than they are retiring them. As a result, the catalog of things that most IT people need to know is constantly growing. Second, as technology advances and becomes more complex, so do the explanations behind it. But Michaud offers suggestions, including IT telling business units answers to the questions they don't know to ask. Read more...

That was bizarre. But when Heartland issued a statement that directly—almost word for word—contradicted its own legal filings, the situation took an Alice In Wonderland twist that makes retail tech worth covering.Read more...

It also allows consumers to have different addresses (home, work, the in-law residence where the holidays will be spent, etc.) associated with different phrases and potentially different payment methods (the corporate credit card for office deliveries, a personal card for home, etc.). But Amazon's vision for PayPhrase goes beyond online; it includes mobile and, especially, in-store options, said Matt Williams, the general manager for Amazon PayPhrase. "We want [PayPhrase] to be used anywhere they want to pay, anywhere a customer happens to be," Williams said.Read more...

Using RFID to coordinate sales floor promotional displays with ad campaigns has yielded a 54 percent increase in sales at Germany’s $68 billion Metro Group. The sales increase figure was one of several pro-RFID numbers mentioned in an October 27 speech by Metro’s IT office chief, Gerd Wolfram, according to RFID Journal.

Wolfram reportedly said Metro, the world’s fifth largest retailer, found that using RFID-tagged pallets for inventory tracking brought a “significant reduction of shipping mistakes and resulting compensation claims,” in addition to a 15 percent cut in truck unload time and halving the time it takes to verify proper item delivery. Metro, using products from Checkpoint, is about to experiment with using item-level RFID tags as the sole method of theft deterrence in stores. …

But that's in the U.S. Things are different in India, where a new law gives the government the clout to actually block access to Web sites if doing so would help ensure public order. Whether an inability to shop online can be defined as a form of public disorder is questionable, but there's no doubt an Internet crippled by bandwidth-hogging flu sufferers could wreak havoc with E-Commerce and dent the economy.Read more...

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...

Back in the fall of 2002, $5.3 billion software firm Avaya purchased a brand new human resources database and payroll system. At the same time, it hired a new senior systems analyst. That analyst quickly reconsidered his decision and withdrew his acceptance of the position. Due to a problem with the database transition, the HR database removed him but the payroll system—with its new integrated direct deposit system—didn’t. Yep, payroll kept depositing checks into his account for years, giving the non-employee almost a half-million dollars.

New Jersey prosecutors have charged the almost-employee, Anthony Armatys, with theft, and he faces as many as six years in prison. Given that the checks kept getting deposited for more than four years (from October 2002 through February 2007) makes one wonder how long they would have continued had the systems analyst, according to the prosecutors, not chosen to push his luck. The Somerset County Prosecutor’s Office said that Armatys called Fidelity Investments, said he was an employee of Avaya and asked to transfer funds from his retirement savings account to his personal account. The irony is Avaya’s tagline: “Avaya delivers Intelligent Communications solutions that help companies transform their businesses to achieve marketplace advantage.” Wonder if that always includes payroll systems that don’t stop paying employees when HR deletes them or if that’s just a homegrown extra?…

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...

We’re heartbroken to have to report to our readers that our esteemed PCI Columnist, David Taylor, passed away on Tuesday from a sudden heart attack. A private memorial service is being held in New York and Dave’s family is asking for donations to the American Heart Association.

Dave spent much of his time running the PCI Knowledge Base, which he launched after a distinguished career as a Gartner analyst. I personally had the pleasure of working with Dave on many projects, panels and podcasts and found his keen observations and sense of humor to be most rare. He called his shots honestly but went out of his way to be kind. Dave’s column was an instant hit with subscribers, as it gave him a forum for his observations and for his wry take on life. We’ll miss him without limit and the industry has lost one of its brightest voices.…