Evan Schuman's StorefrontBacktalk

The essence of the London case is that Google and Apple made privacy promises that are being broken. That fact may make it more of a contract law and a deceptive trade practices claim than a criminal case. And even that is dicey, because the news release from the first plaintiff to file a suit indicates it's less a matter of Google or Apple lying than it is about the companies being vague. But all of that is an issue for the lawyers at Google and maybe Apple. How does this make retailers' lives miserable? Quite easily.Read more...

"Soverain argues that obviousness of all of the claims in suit is negated by the favorable market response that was achieved by Open Market's Transact product, which Soverain states received 'widespread recognition in the general media,' 'an excellence award from the industry' and was 'widely licensed.'" Sounds good. So it would appear that the wide licensing meant Soverain had a lot of fans, right? The Appellate judges' written decision continued: "Newegg responds with evidence that the Transact system was abandoned by its developers and almost all of its original users. Newegg points out that licenses were taken to avoid the costs of litigation, and not to use the flawed Transact system embodied in its software."Read more...

Under what has been called "digital repossession," software vendors may even have the right to decide for themselves whether the terms of a contract have been breached and to simply terminate access to the software or the service. The key here, writes StorefrontBacktalk Legal Columnist Mark Rasch, is to make sure both software license agreements and service agreements have a "soft landing" provision that ensures the vendor is paid for its services while limiting the impact of a sudden withdrawal of the service or software.Read more...

The lawsuit has the tactical advantage of freezing the situation, giving Lands' End a little more time (very little time) to find a new home for its payroll system. But it's also an object lesson in software end-of-life issues—that lesson being, "when a vendor has you over a barrel, it doesn't have to play nice."Read more...

MCX still hasn't revealed most of the details of the system, but some things are becoming clear. Others are still up in the air—like whether banks will accept a few pennies per transaction when an ACH withdrawal typically costs them more than that. Also, will banks want to get into such an effort, knowing the toxic politics surrounding any effort to knock out Visa and MasterCard? The much more fundamental issue for MCX is whether it can come up with—and agree to fund—a compelling reason for shoppers to participate. That, coupled with what some retailers—namely, those who have been pitched—see as an overly aggressive approach, has prompted some to question whether MCX can deliver the interchange relief it promises. One example of the pitch approach some have cited: MCX demanding $30,000 from retailers just to see the official PowerPoint. Chains are also being asked to commit to three-year mobile payment app exclusivity, meaning they won't support any non-MCX mobile payment other than any mobile payment app they have already deployed.Read more...

Automating coupon-based offers is fine. But if you're going to Internet-up paper-style coupons, you really have to go all the way. And these pretty clearly were conceived as paper coupons. One clue comes in the boilerplate on the coupon, which had relatively few restrictions on products that could be bought (no Apple, Sony or Nikon) but also specified the coupon was good in-store only. It also sported classic paper-coupon language, including "No copies."Read more...

In-store mobile payments are still looking for the right technology, with NFC struggling for a foothold and QR codes only successful in pockets (or, more accurately, in Starbucks). But a new smartphone mobile wallet announced on January 18 by China’s Alipay takes a new tack: It communicates via what Alipay describes as “white noise.” (We’re pretty sure what that really means is “it sounds like the hiss of a dial-up modem, just without all the screeching.”) The Alipay wallet isn’t currently supporting POS payments, just data transfers between phones. But there’s no special reason it couldn’t be used for transactions, especially because that’s the business Alipay is in.

True, a hissing phone would be really easy to eavesdrop on, but you’d want that transaction data encrypted anyway. And as retro (and annoying) as it would sound at a POS, a pay-by-hiss system would work even for smartphones without a camera and high-resolution screen—all the phone needs is a speaker and microphone. Still, there’s that hiss, which certainly would be out of place in a tony store and might be inaudible on Black Friday. But maybe there’s a retro solution for both those problems. Acoustic couplers, anyone?…

The trial at the 2.1 million square foot Garden State Plaza (about 300 stores) involved six chains and managers at each of the stores discussed the trial, on the condition of anonymity. The chains involved were American Eagle Outfitters, Jamba Juice, Nine West, Champs, Aerie and Foot Action (part of the FootLocker chain). On the plus side, all of the stores reported that some shoppers tried using the app. On the down side, far from all of them were able to do so.Read more...

An unorthodox use of Bluetooth is being tested at a huge Russian shopping mall for both in-store customer location and payment transactions. The catch: It’s extremely nonstandard. Instead of pairing with customer smartphones the way Bluetooth devices usually would, individual devices throughout the store broadcast amped-up signals (range: 100 meters, rather than Bluetooth’s usual 30 to 50 meters) that tell a smartphone app about discounts and specials. If the signal from, say, the display of Bartlett pears is strongest (because it’s the nearest broadcaster) and if it meets various demographic criteria (send this one to only males, this one to shoppers older than 70, etc.), that’s the signal the app displays. Meanwhile, other Bluetooth signals with very low range (a few millimeters) are used for payments—no NFC required.

We saw this demonstrated at last week’s NRF show by vendor WiseSec, and it’s clever. But WiseSec says some retailers with especially large footprints may need as many as 50 or 60 Bluetooth beacons per store. With a 100-meter range, multiple stores in a mall will overlap, which is why the differentiation of signal makes sense. A potentially bigger problem: If you’re using high-powered, nonstandard Bluetooth signals, could they interfere with other Bluetooth devices (in-store that means everything from customer phone headsets to POS keyboards)? Not that we don’t trust the Muscovites, but we’ll like this a lot better once we see it not interfering with American or Western European customers and their toys.…

Like all innovative technologies (from credit cards to loss prevention devices), it's not clear yet whether consumers will embrace or reject the new technology, or how regulators will ultimately react.Read more...

But Zaxby's doesn't operate any of the stores—they're all franchisees, putting both the company and the franchisees in a worst-of-both-worlds situation.Read more...

What was different this time, though, is that members were more candid in explaining why they have the goals they do, even if they were not especially forthcoming in how they plan on achieving those goals. The group, for example, re-stressed its intent that data from one chain will not be shared with another chain. Jay Culotta, the treasurer at regional convenience chain Wawa, said many of the mobile vendors say they are not—today—planning on sharing data, but they refuse to say what will happen down the road. "It's not a forever situation," Culotta said, adding that the temptations for leveraging such data will likely be overwhelming. "It's unclear what their business case would be without monetizing that data."Read more...

Yes, the Albertsons logo is the same on both sides. But seven years later, everything from self-checkout to loyalty to POS to prescription systems is now different across the soon-to-be-unsplit chain. And everything will have to be merged—and fast.Read more...

Home Depot's use of the card-matching procedure is not that unusual among major chains, but the norm is for the effort to be kept internal, to help improve general marketing. It was Home Depot's reaching out to customers that made some of them realize what was going on. And therein lies the problem.Read more...

The bad news: PayPal has said nothing whatsoever about how many shoppers in all of these stores, plus Home Depot, JCPenney, Abercrombie & Fitch, Toys”R”Us, Foot Locker and Barnes & Noble, have actually used the service. And of those who did, how many came back to use it again? How many dollars are shoppers pushing through the retail PayPal system? You know that if those figures were anything less than humiliating, they'd have been released by now.Read more...

At an NRF panel on Monday (Jan. 14), a Macy’s E-Commerce exec said the chain wants to run quite a few small-scale analytics trials, something the exec said was “Amazon-like.” (Now there’s an adjective that strikes deep retail emotions.) “We want to build an Amazon-like testing environment, but a testing culture is not something people understand right away,” said Kerem Tomak, Macys.com VP of marketing analytics, according to our U.K. media partner, Retail Week. “We are educating others of the power of testing.”

Experimenting online to see what works best for collecting useful marketing and CRM data? Yes, that’s Amazonian, but it’s less of a culture change for Macy’s than it might seem. Remember, this is the chain that developed its shipping-from-stores system by starting with limited, low-cost experiments and then growing what worked and killing what didn’t. (Contrast that with JCPenney’s big-bang approach, where the chain locked into a grand plan and is now grimly marching into oblivion.) We’re pretty sure Tomak is wrong about Macy’s customers not understanding a “testing culture.” What they’ll hate is an “I found out somebody else was offered a lower price” culture. That’s when Macy’s will have trouble.…

Retailers have discovered that, although the benefits of a truly merged-channel supply chain are vast, the pain-points are potentially even more vast—at least in the beginning. Michelle Tinsley, the director of transactional retail at Intel, said chains can find it difficult to strike the right balance. “The customer views that brick-and-mortar location as today’s face of that retailer, so they need to uphold that brand image and take the (online) returns,” Tinsley said. “But in this merged world, (the chain needs to) allow any location in that nationwide retailer to see those shoes now back into inventory and to then sell them very quickly and ship it from that location. So even though it was

returned to a brick-and-mortar store, let it be seen in those warehousing systems so that the next order that comes in over the Internet or from a store in Cincinnati gets placed from that store in, say, California.”

In Part Two of this week’s StorefrontBacktalk Radio segment, Tinsley argues that this problem is one manifestation of the old way retailers look at problems. “I think you need to flip it. Instead of saying, ‘I’ve got the inventory in the wrong place,’ say, ‘Well, I’ve just got to open up the inventory to where the next demand signal is coming from.”…

"We believe the new site, which came online Nov. 19, 2012, cost us approximately $3 million in lost sales for the third quarter. Following the launch, it became apparent that the customer experience was negatively impacted, evidenced by a decline in several key performance factors," said Glenn Lyon, CEO of the $1.4 billion sports apparel chain with more than 640 stores in 47 U.S. states, during an earnings call on Friday (Jan. 4). A few weeks earlier, Finish Line was singing a very different tune when it said the chain's "aggressive omni-channel growth initiatives drove its decision to move away from legacy in-house-managed software to Demandware's flexible and scalable cloud-based solution."Read more...

Problem #1: Shoes have an extremely short shelf life. At the end of that shelf life ("that shoe is sooo last month"), the shoe is typically priced at a steep discount. Problem #2: Stores can't sell one or two products. The display unit would represent half of all inventory. So, again, that orphaned product goes on steep discount. Problem #3: The store could ship that shoe to a store that does have that SKU in its inventory. But you then have the cost (hard out-of-pocket shipping costs as well as labor to prep the product on both ends) and time (the multiple days involved in shipping) delays, and you're still fighting against that extremely short shelf life.Read more...

Part of that may be a novelty factor—glossy printed material isn't so much a part of young consumers' lives today. But that only explains why catalogs might have some influence, not as-big-as-Facebook influence. Given that many chains completely dumped their catalog efforts in favor of social efforts in recent years, this is a genuinely annoying result.Read more...

What everyone involved in retail payments will now want to see, pens PCI Columnist Walter Conway, is how many other resellers and systems integrators will join Reliant. The ultimate success of the QIR program depends on the decisions made by retailers, payment application vendors and, quite possibly, the PCI Council and even the card brands, too. Read more...

Amazon isn't saying, but chances are good that such safeguards were in place—and that's why the victory E-mails went out hours before the game even started.Read more...

The data went to Bloomingdale's in aggregate, but the system could just as easily deliver CRM-friendly customer-specific data. The mirrors enable shoppers to try on far more outfits and combinations than time—or store inventory—would ever permit.Read more...

The legal fight over the interchange settlement is still going on, but the deal’s first effects will still show up this month. Beginning January 27, retailers will have the option of tacking on a surcharge for payment-card transactions. No, the class-action settlement still hasn’t gotten final approval, but the terms take effect 60 days after U.S. District Court Judge John Gleeson gave it preliminary approval in November 2012. (It’ll be rolled back if the settlement is ultimately rejected.)

Let’s be clear: Add-on swipe fees are still illegal in New York, California, Florida, Texas, Connecticut, Massachusetts, Maine, Colorado, Oklahoma and Kansas, which together represent about 40 percent of U.S. retail sales. And many big chains have already said they think a surcharge will encourage customers to walk away at the POS, so they’re not doing it. That means retailers who do implement a surcharge will make a nice lab test for the rest of retail to see how much customers are willing to accept. The answer is probably “not much”—U.S. customers love their plastic—but we may yet be surprised. There was a time when banks and airlines thought they couldn’t get away with nickel-and-diming their customers to death, either.…

These chains apparently think shoppers would never pay full freight, so they're willing to pay the delivery service £10 and then only charge the shopper £6, according to the CEO of a prominent same-day retail delivery service in London, whose company is trying to move into the U.S. That calculation also assumes not that many shoppers will use the service. After all, there are only so many £4 haircuts a chain selling lower priced goods is willing to take.Read more...