Evan Schuman's StorefrontBacktalk

Lands’ End is hoping technology can deliver a better swimsuit-purchasing experience online than in-store. With few items of apparel are the subtle distinctions more important than with swimwear. The battle: to approximate the exact look-and-feel of the swimsuit online (advantage: brick-and-mortar) while minimizing the awkwardness and embarrassment of the process (advantage: online).

The Camden Courier-Post did a revealing (sorry. Couldn’t resist) look into how Lands’ End is trying to play this one, with options to “send messages to a personal shopper and match suits to their body types through a search mechanism that lists six elements.” Worth a read.…

In Sunday's New York Times, there's this intriguing piece talking about how E-Commerce sales are quickly running out of steam. Perhaps "intriguing" is the wrong word for it. A more apt term might be "dangerous" or "out-of-context" or ..... nah, I think I'll stick with "dangerous."

The piece is not dangerous because it reveals some deep, dark secret. It doesn't, not does it claim to. It's dangerous because it perpetuates the misguided—but commonly held—belief that online and offline retail efforts today are distinct. Even worse, it seems oblivious to the rapidly-increasing influence that each has on the other.

The story is built on stats showing a sharp decline in online sales. But those statistical issues are not the key problem with the Times story. The problem is that it still sees online and brick-and-mortar as rivals. The reality is that we are just starting the age of the merged channel.

Often transmitting unencrypted confidential customer data over weakly-protected connections, retailers risk privacy and create backdoors for cyber thieves. And yet, no one's giving the merchants much of a choice.

The best theoretical way to deal with these tests would be to use specially-created data that is not linked to any actual customers and is designed solely for the purpose of these kinds of tests. To date, no one has spent the time—nor the money—to create such data. That leaves retailers with few options and most use real customer data. Many in the retail industry see this as a recipe for security disasters.

"Some 90 percent of the retailers out there don't even realize how big a problem test data security is because they don't know the test environment," said David Taylor, president of the PCI Security Vendor Alliance. If auditors knew what to look for, "you could easily have 75 to 85 percent of retailers fail on this criterion alone."

For those of you who may be near Philadelphia next week, I'll be delivering the Keynote Address at a PCI Summit in the city of brotherly contempt on Thursday. For the moment, let's set aside the very legitimate question of why they asked me to keynote, given that it's hard to imagine scraping the bottom of the speaker barrel any more pathetically than to ask an ink-stained journalist to talk.

That's actually literal. A few weeks ago, I didn't check my pockets carefully and did the clothes washing with a blue pen still embedded. Voila! The perfect shirts to wear in full ink-stained wretch mode. Wretch Wear! I was delighted by the discovery. My wife much less so. Then again, I've been relieved of clothes washing for awhile so this might be seen as a win-win.

Making it unanimous thus far, two federal judges have denied key motions in the lawsuits against retailers accused of violating federal law by printing prohibited information on credit card receipts. This is on top of a third federal judge making a similar ruling earlier this month.

Unless the U.S, Court of Appeals for the Ninth Circuit intervenes early next year, retailers who have been sued for printing federally-prohibited information on consumer credit card receipts will almost certainly get off the hook. This is because of decisions from two federal judges this week rejecting a critical class-action certification request from the consumers suing the retailers.

In Europe, Visa officials are backing off of strict retail PCI demands, bowing to practicality. Visa described the original PCI deadlines as “unrealistic,” according to this ComputerWeekly story.

“Visa and MasterCard agree that risk mitigation is of prime importance and we expect this to be done immediately,” said Stanley Skogland, head of policy compliance at Visa Europe. “It does not mean that we do not expect all parts of the standard to be achieved, but we cannot expect miracles overnight.”

Added Simon Langley, head of PCI DSS at KPMG: “Visa and MasterCard agreed on the standard, but compliance has not been standardized.”…

The technology needed for printing RFID tags is slowly maturing. Make that very slowly maturing, to the point where they are still years away.

At IntertechPira’s Printed RFID conference, held earlier this month in Frankfurt, Germany, execs said the reality of printed RFID tags directly onto packaging is still far off, according to this RFIDJournal story. IDTechEx President Raghu Das predicted that most of the 1.91 billion passive and active tags purchased in 2007 will not be printed at all, though antennas and other UHF tag parts might be. However, he claimed, nearly 50 percent of the 670 billion tags purchased in 2017 will be fully printed.…

Traditional arguments against item-level RFID use is that it only makes economic sense for products costing more than $100. But that assumes one-time use. With a trial with re-usable tags, Staples is throwing out all the old rules.

Staples in Canada started its trial this month at one of its Montreal stores, selectively tagging about 2,000 items representing some 300 SKUs out of the 7,500 SKUs in a typical location, said Joe Soares, director of process engineering for Staples and Business Depot. The tags themselves are higher-end active tags, which would typically cost Staples between $5 and $8 each. For the six-week trial, though, Soares said, "it's not costing us anything" because the costs are being picked up by partners, including Fujitsu and AbsoluteSky.

Shoe chain Aerosoles is one of many retailers trying to figure how far they can go in the multi-channel race.

In talking with lots of retail marketing and IT execs recently, there appears to be this growing realization—concession?—that a true multi-channel approach is a shock to the retail system. Indeed, even the word "multi-channel" sends the wrong message. Isn't that the opposite of the true goal? Perhaps the phrase "merged channels" is closer, with "multi-channel" usually a pseudonym for what Google's head of retailing has dubbed "multi-silo-ed."Read more...

Whether or not retailers can be legally punished for giving consumers receipts with full credit-card numbers has become much more uncertain, with a few recent critical—and conflicting—legal decisions.

A series of lawsuits against retailers for violating federal law by printing full credit card numbers on receipts is now facing unclear legal terrain, with two federal judges issuing contradictory rulings and the U.S. Supreme Court weighing in this week on a related case and giving some contradictory directions of its own.

Best Buy CIO Bob Willett is arguing that RFID can be a huge boost for retailers, but only if they can convince people they won’t abuse the data.

Willett, in a keynote address at the ERIexchange show in Boston this week, credited some RFID trials with already boosting sales in some isolated areas, according to this story in Computerworld. “Before I’m carried away in a box, I’d like to see checkouts gone from the store,” Willet said. “The technology is there to do it today with RFID. The first major retailer that can do it will be remembered forever and a day as a champion of the consumer.”…

New survey results released from the National Retail Federation show a 71 percent increase in retailers noticing organized retail crime activity. Is the news the increase or that it's being noticed?

Statistics are wonderful things, especially survey results. These thoughts come to mind as I look at a wonderful new survey from the National Retail Federation. The survey reported that 79 percent of the 99 retail execs surveyed in April said they had been a victim of organized retail crime in the prior 12 months.Read more...

When Hewlett-Packard this week unveiled its prototype Retail Store Assistant—a kiosk that offers customized individualized promotions transmitted directly to a customer's smartphone—it took a business pragmatic position in the personal shopper battle.

There's little debate that customized shopping—taking the CRM customer-specific data one major step beyond the minimally effective coupons at the end of checkout—is almost certainly going to be a key in-store technology over the next few years, especially with grocers. But the form that this customized shopping will take is a key debate.Read more...

Retailers globally will likely spend $120 billion on IT this year, a figure that--as a percentage--is actually low compared with other industries, according to information published Tuesday by the IHL Consulting Group.

"Retailers individually spend well below other industries, about one-third of the amount per revenue dollar compared to financial services and insurance," said IHL President Greg Buzek.

Low tag read rates are still preventing RFID from gaining the necessary survival momentum as of mid-2007, even though the potential benefits are looking more attractive, according to a report issued Tuesday from U.K.-based RFID analyst firm IDTechEx.

"The tagging of pallets and cases to meet retail mandates is still struggling to take off," said IDTechEx CEO Raghu Das. "This year, IDTechEx expect that only 375 million tags will be used for this sector, the main reason for this is that the read performance is still not satisfactory for most companies. For example, George Chapelle, CIO of Sara Lee, reports that on frozen and dry foods they achieve about a 70 percent read rate, and on chilled foods the read rates is about 30 percent using Gen 2 tags. With such poor read rates, they cannot realize internal benefits."

In the ongoing legal battle of former Wal-Mart marketing chief Julie Roehm against Wal-Mart, most of the accusations have involved inappropriate acceptance of gifts from suppliers. But the latest accusations–on both sides–seem to be really reaching.

Based on this Reuters story, Roehm countered the charges that she accepted advertising agency gifts by saying: Oh, yeah? Well, CEO H. Lee Scott get discounts on yachts, “a large pink diamond for his wife” and free airplane use.”

OK, so that’s not too petty, but it doesn’t address the charges against her. But then Wal-Mart counter-pounched with my favorite accusation: Wal-Mart accused the marketing chief of having accept a dinner from the ad agency. (pause for effect) One dinner? Maybe they mean a $50,000 wedding reception dinner? Nope. It “consisted of small, White Castle-sized burgers.” Maybe the courtroom will break into a rendition of the West Side Story ditty “I Feel Petty.”…

Connecticut state legislators have backed off a plan–pushed by bank lobbyists and opposed by retail groups–to make retailers who are found to be at fault in data security efforts pay all bank costs, according to this fascinating Hartford Business Journal story.

Despite lobbyist arguments that TJX was merely a victim of the cyber thieves who orchestrated the data heist, Connecticut state Sen. Bob Duff wasn’t buying it. “I still blame TJX. They should be blamed, they should be sued, they should be fined,” he said.

But Duff did yield to the argument that such a bill would financially desrtroy small retailers and ultimately backed off. The Hartford Business Journal story gives us a great–and rare–peek behind the scenes at one state’s legislative maneuverings.…

The Staples Businesss Depot, which bills itself as Canada’s largest supplier of office supplies, is launching an RFID trial to test realtime inventory tracking, the chain announced Thursday.

The retailer said it plans to “tag thousands of items that will be dynamically tracked in real-time–at long range– from entering into store inventory, to store shelves, through to completion of the sales transaction,” according to a statement. “In addressing privacy concerns, the RFID tags are not concealed on the items and are re-usable. They are physically detached when the item is sold to the customer at a Staples Business Depot store.”…

In a psychologically fascinating "grass is always greener on the other side of the firewall" scenario, states see the industry's PCI as the perfect security standard. And retail CIOs are salivating for Sarbanes-Oxley-like controls.

This comes to mind as we look at two aspects of the PCI world this week. Recent reports about PCI have raised questions about how many retailers are truly PCI certified as well as problems with PCI administration itself, including conflicts of interest, inconsistent enforcement and retail confusion. But several states, including Minnesota and Texas, want to make PCI their state's legal requirement for retailers operating within their borders.

After months of investigation, the state of Connecticut sued Best Buy on Thursday and accused the chain of tricking customers with two identical-looking web sites in its stores, the only difference being one had higher prices.

"Best Buy treated its customers like suckers, not patrons to be prized," said Connecticut Attorney General Richard Blumenthal. "Best Buy gave consumers the worst deal: a bait-and-switch-plus scheme luring consumers into stores with promised online discounts, only to charge higher in-store prices."

This week, Minnesota became the first state to mandate PCI requirements for retailers who want to be protected from banks and credit unions for data breach losses.

The Plastic Card Security Act kicks in in August, according to this St. Paul Pioneer Press story. Minnesota is not likely to be the last state to put its weight behind PCI, with Texas, Massachusetts and Nevada–among others–heading down similar paths.

“It’s a credit-card world. If you’re in business in this day and age, you have to be able to accept credit-card and debit-card transactions,” Buzz Anderson of the Minnesota Retailers Association, which opposed the bill and argued for pushing back the penalty deadline, told the newspaper. The penalties from Visa and MasterCard can run to hundreds of thousands of dollars, he added, and act as a significant deterrent. Those penalties, he said, “would drive most small businesses out of business.”…

Industry efforts to set precise security standards have frustrated proponents with a patchwork of contradictory interpretations, auditors selling the services they're critiquing and frustrated retailers who can't jump through infinite hoops forever.

Said David King, CIO of Regal Cinemas: "This used to be the climate that we all lived with before Enron. (Accounting firms) not only did the audits, they also did taxes and evaluated risks. One division created revenue for another division."

As both technology and market demand are allowing retailers to truly customize, many of those merchants must start the painful and expensive integration process, says a new Forrrester Research report.

The promise of personalization—where stores in one neighborhood would have entirely different merchandise than one in a nearby neighborhood with a different customer mix—is nothing new. Retailers have been adding technology to their stores for years to test it out, in many different ways.Read more...

Leveraging existing Wi-Fi investments and applying it to asset tracking is behind an expect sharp and ongoing increase in Wi-Fi RFID tag shipments, according to a new report from market analyst firm In-Stat.

"Despite some hurdles to overcome, Wi-Fi RFID tag shipments will grow at more than 100 percent annually through 2010," In-Stat said. Added In-Stat analyst Daryl Schoolar: "Historically, one of the key weaknesses of this market has been the short battery life of asset tags," but technology advancements are making "multi-year battery life now a reality."

The $81 billion European retail chain Metro Group is moving ahead with its Asian RFID supplier program, promoting a kick-off program today for 30 partners at the Hong Kong Science & Technology Park.

The "Tag It Easy" pilot is officially part of an initiative that Metro is calling Advanced Logistics Asia (ALA), which helps consumer goods manufacturers to apply RFID labels on shipments from Hong Kong to Germany.