Evan Schuman's StorefrontBacktalk

The U.S. government is not alone is trying to push a national ID card program to try and improve security and reduce security fraud. But efforts to do so in the U.K. were set back on Thanksgiving when a prominent British Parliament member published government answers on the true cost.

MP Stewart Hosie on Thanksgiving said that the British government's "claim that ID cards could save up to £1.7 billion of identity fraud in the UK economy was totally false" because "there are no costs calculated for the private sector use of ID cards" and that fact "has totally destroyed the credibility of the Government's claims on ID cards," Hosie said, according to a story in PublicTechnology.net. ""Indeed the admission that there are no costs to deploy the system in either the private or public sector without the Home Office makes any claims of savings meaningless. To read the full story,

Millions of Canadian consumers who have moved to debit cards instead of credit cards learned that no payment system is perfect on Black Friday, when Royal Bank of Canada debit cards wend out of service for nearly three hours. The outage began around 4 p.m. EST and lasted until about 6:45 p.m. EST, Royal Bank spokeswoman Beja Rodeck told the Canada.com news service.

“All I can say is that it was a technical glitch and we’re looking at the root cause,” she said, adding that the problem was mostly at POS systems and did not impact the banks’s ATM network. Debit cards from Canada’s other big banks also appeared not to be affected, the news report said.…

Two key E-Commerce leaders—walmart.com and macys.com—found themselves shut out of the holiday sales rush for much of Friday, as their sites slowed to a crawl starting at about 4 AM in the East.

Keynote Systems, which tracks Web traffic, saw the Wal-Mart site "effectively down" from 4:30 AM Friday (East Coast time) until 2:30 PM Friday, said Ben Rushlo, a Keynote senior manager of competitive research. In the morning, Rushlo said, the site of the nation's largest retailer was eight times slower than normal, with many unable to even reach the homepage. "Every request was either completely down—with an error message—or unusually slow," he said. To read the full story,

More in-store POS-related security reports surfaced this week, with a Mchigan convenience store chain, the latest to apparently be hit. This is the latest in a series of well-publicized retail victims, including OfficeMax as well as Dollar Tree and Sam’s Club.

The latest incident reportedly involves Wesco, a gas station and convenience store chain with 51 locations in Michigan. Computerworld reported this week that several financial institutions canceled thousands of credit and debit cards in Michigan because of fraud concerns related to the retailer’s apparent data compromise. Wesco’s Web site confirmed “the possibility of credit card fraud associated with card use at our facilities” and that the U.S. Attorney’s Office and the Secret Service were investigating transactions between July 25 through Sept 7, 2006.…

The U.S. Census Bureau is reporting that brick-and-mortar retail sales are increasing four times more slowly than their online component. Specifically, E-Commerce sales for the third-quarter jumped 20.4 percent compared with last year’s identical quarter, while all retail sales jumped only 4.8 percent.

Perhaps more telling are the actual quarterly revenue figures, which give $27.5 billion in online revenue and almost $1 trillion ($991.7 billion) for all of retail.

Web sales may be comparitively small but E-Commerce is hardly a startup anymore. If it’s still bringing in this kind of growth after a dozen years, brick and mortar managers better take notice and get their customer service acts in gear.…

Is portable video not the killer app some have touted or is its time simply not yet here? Both questions are raised with new data–from the Nielsen Media Research people who, if nothing else, should really know television–suggesting that iPod users rarely use their video capabilities. This is true even of users of the Video iPod, who apparently liked the idea of portable video more than the real thing.

Nielsen found that less than one percent of accessed iPod content, including content from iTunes, was video. That number increased slightly–but just slightly– for Video iPod users, who opted for video about 2.2 percent of the time. According to The Hollywood Reporter, those numbers improved a bit when the question was changed from the number of items played to the number of minutes player, but not dramatically. “Even measured by duration of consumption, where 30- or 60-minute TV shows might seem to have a built-in advantage over three-minute songs, video comprises just 2 percent of total time spent using iPods or iTunes among iPod owners,” the news report said. “Video iPod users consume video 11 percent of the time.”

Does this mean that consumers are not interested in Web video? Not necessarily. First, laptop and PC screens are much more suitable to video, as least for first-generation efforts. Secondly, those numbers aren’t so bad for this new a media format. If it hasn’t materially changed in one year, then there may be trouble in videoland.…

Just in time for the holidays, those wacky partying people at the National Retail Federation introduced on Tuesday their latest data-exchange XML schema, with the backing of some key retailers–including Blockbuster, Circuit City, RadioShack and Target–and suppliers, including Reebok and IBM.

The new standard replaces the previously-released Digital Asset Management (DAM) schema, according to a statement from the NRF’s Association for Retail Technology Standards (ARTS). The schema’s goal is to more efficiently create and manage images and text used to present products to consumers everywhere from shelf-edge and digital signs to catalogs, E-Commerce sites and kiosks.…

Is a standard cellphone format for contactless payment in the offing? Unlikely, but some major players are going to make a lot of noise trying. Sony and NXP Semiconductors (formerly Philips Semiconductors) on Monday announced that they will work together to–by mid-year 2007–“plan, develop, produce and market a secure chip that will include both Mifare and Felica operating systems and applications, as well as other contactless card operating systems and applications.”

That’s quite an undertaking. The pair officially got the backing of the GSM Association, a major telco organization representing 14 mobile network operators: Bouygues Telecom, China Mobile, Cingular Wireless, KPN, Mobilkom Austria, Orange, SFR, SK Telecom, Telefonica Móviles España, Telenor, TeliaSonera, TIM, Vodafone and 3. The Sony/NXP objective, according to a joint statement the companies issued, is to combine what they will create with an NFC chip to create a universal contactless IC platform for cellphones.

To be fair, these kinds of relationships are essential for truly interoperable mobile payments systems to be deployed. But the hurdles on doing something like globally are huge. Then again, so are the incentives.…

There are some things on this planet that are simply not predictable, but we mortals try anyway. Into that category goes an announcement on Monday from CyberSource that they have calculated what the busiest online shopping day will be this year: Mon., Dec. 18th.

The vendor said they crunched the date by looking at both historical shopping patterns and the mail delivery schedule.

“A rule of thumb has emerged about holiday peak shopping days: they typically happen on the Monday occurring closest to Christmas where there is at least a week available for shipping. We expect that to be the case this year—Monday, December 18th. CyberMonday, the Monday after Thanksgiving, is a good eCommerce shopping day, but beyond that it’s just hype. It represents no sort of sales plateau. If anything, it’s about the halfway mark for holiday sales,” said Doug Schwegman, CyberSource director of market and customer intelligence. “”If the peak does occur earlier this year, say Monday, December 11th, this will mean the early shopping incentives have prevailed over the procrastinators,” said Schwegman. “But I believe the rule will hold up. eCommerce is all about convenience.”…

StorefrontBacktalk was asked to pen a column about the impact of the cellphone on today's retailers for the Retail Systems Alert Group.

We argued that those devices are taking on lives on their own in a myriad of ways, from using their photo lens to read barcodes on advertisements to acting as a portable POS to an integrated loyalty card and coupon-generator. To read the full column,

Gift card sales are projected to $24.81 billion this holiday season, according to a survey done by the National Retail Federation and published Friday, and the NRF reports that as the largest gift card sales projection they’ve ever given. Indeed, that’s $6 billion more than they reported just last year. That survey also projects that “average consumers” will spend significantly more on gift cards than they did last year–$116.51 vs. $88.03 in 2005.

Is it just me or does this take away almost all of the holiday magic of gift-giving? Isn’t the whole point that the gift-giver thinks about the recipient enough to select the ideal item? Well, there’s one consumer benefit: No needs to wonder about how much you spent.…

Praying that the “if we build it, they will come” cliché is true, MasterCard PayPass confirmed Thursday that it is adding some 5,000 additional self-service POS terminals—including a lot of vending machines—to its contactless repertoire, in Philadelphia, New York City, Dallas, Chicago, Las Vegas, San Francisco, Los Angeles, Boston, Washington D.C., Denver, Seattle, Miami and Orlando.

MasterCard dubbed the deployment “the largest rollout to date of contactless technology in self service point of sale and vending machines.” That would be a more impactful claim if we were seeing tons of companies stampeding to get into that space. …

Macys.com announced on Thursday that it’s revising its merchandising and financial analytics set with more software from SAS.

Kent Anderson, president of the Federated Department Stores division, said the online face of a major brick-and-mortar chain has very different needs that it’s physical counterpart: “Macys.com stocks warehouses, not stores,” he said.…

An interesting report was published Tuesday by CyberSource, in the form of its annual E-Commerce fraud report. Beyond touting some $3 billion in fraud in the U.S. this year—a 7 percent increase compared with 2005—the report talked about 1.4 percent of retail revenue lost to fraud this year, a slight decrease from the 1.6 percent reported the year earlier.

What's interesting is not the percent drop (a 0.2 percent change is not likely statistically significant) but this claim in the news release accompanying the report's release: "Approximately one percent of accepted orders ultimately turn out to be fraudulent, but merchants also reject four percent of their incoming orders due to suspicion of fraud—some valid orders are almost certainly being left on the table."Read more...

Recent RFID trials are showing mixed results for RFID, with UK retail leader Marks & Spencer declaring its 42-store test a success and preparing to add 80 more test stores next year while Cardinal Health said RFID has "real promise" but a "great deal of additional work needs to be undertaken" before it's practical.

The Marks & Spencer trial is interesting because of the $14-billion M&S chain's history as a longtime RFID proponent. item-level RFID tagging will hit an additional 80 stories in the spring of 2007 and will be limited to apparel that has an especially wide variety of sizes, with the possibility of "extending RFID tagging to other clothing departments from the autumn of next year."Read more...

A consulting firm’s recent report that credit card interchange fees are weighed against retail interests may help push alternative payment methods. That might put pressure on the credit card players to soften their fee requirements.

The report from the Chicago-based Diamond technology consulting firm found, for example, that some 44 percent of interchange costs are used to fund credit card rewards programs even though “merchants get nothing out of these programs because they are competitive tools for issuers. Merchants likewise pay about 3 percent of their interchange dollars for association branding costs. Meanwhile, processing— the original reason for interchange—comprises only 13 percent of interchange costs. Given the merchants’ lack of perceived value for what they pay, the situation is clearly unstable.”

The report holds out hope for contactless payment options, cellphone payment and other alternative vendors including PayPal, Debitman and PayByTouch.…

The City of Brotherly Love may be among the first places to have taxis accepting contactless credit cards. The freeway-fond Philly financial falderol comes courtesy of a deal between the Philadelphia Parking Authority, MasterCard, VeriFone and Taxitronics and promises to equip some 1,600 cabs with “networked fleet management capabilities and consumer services including wireless credit and debit payment transactions, navigation, scheduling, trip logs, lost & found tracking, and panic button alerts,” according to a joint statement the group issued.

Because transactions worth less than $25 will require no signature, VeriFone said that it estimates the system will cut about 45 seconds off the transaction time in taxis when compared to cash and 15 seconds when compared to swiping a traditional payment card.…

Retailers experimenting with fingerprint identify verification have seen ample anecdotal and survey evidence suggesting consumer resistance to the idea. A new survey from Harris Interactive (funded by Diebold, a vendor with a strong interest in the results) announced Tuesday has a hint of good news for fingerprint fans, with 72 percent of 2,000 consumer respondents last month saying that fingerprint-scanning ATMs would give them “a positive or very positive feeling toward their bank.”

There are, however, reasons to be suspicious of such data. First, beyond the vendor-involvement in the research, the company’s statement said the 72 percent was for all biometrics. The wording of the question did indeed ask about biometrics, but the question only offered one example and that example was fingerprinting. If the consumer didn’t know what biometrics meant–and not that many do–they would likely answer it solely relating to fingerprints (as opposed to facial recognition, retina scan, voiceprint, etc.).

That all said, it’s an unusual survey that shows such a strong consumer preference for fingerprint scans. Might be a trend worth watching.…

Traffic monitoring firm Hitwise reported Monday that traffic to the nations’ 100 largest E-Commerce sites increased 6.2 percent for the week ending November 11, 2006 compared with last year’s identical period.

“Online retail strengthened in Q3 and in the six weeks since October 1, 2006 visits to the Hitwise Retail 100 Index have been up an average of 5.7 percent, which indicates strong growth for online retailers during the 2006 holiday shopping season,” said Bill Tancer, general manager of Research at Hitwise. “Historically, Thanksgiving Day is the peak day for market share of visits to the retail category, and this year, based on our data, is poised to surpass 2005. The strongest pre-Christmas spike should come the second weekend in December.”

The top sites–in order from most visited–were Amazon, Wal-Mart, Target, Overstock, BestBuy, JC Penney, Toys R Us (U.S.), BizRate, CircuitCity, Sears, QVC, Shopping.com, Half, Shopzilla and HSN. …

Hull, England-based ADS Worldwide, an 18-year-old 235-employee vendor selling tags, labels and trim for apparel manufacturers and retailers, will be taken over by Checkpoint Systems for $8.5 million in cash, plus closing costs, Checkpoint announced Tuesday.

The acquisition is expected to add more than $20 million of revenue in 2007 and be neutral to slightly accretive to earnings per share, due to integration costs in the first year and purchase accounting, the statement said. ADS was initially focused on barcode service and more recently has been offering on-line ordering and tracking facilities.…

The CRM market is growing consistently and will probably hit $18 billion by 2010, but the biggest effort will be in getting more out of already-installed CRM packages, according to a new Forrester Research study.

“When I talk to people, most feel they haven’t used what they already bought,” Forrester analyst Bill Band was quoted saying in an insightful SearchCRM story. “They’re in that mode of getting value out of what they implemented.” Total CRM revenues in 2006 will reach $8.4 billion, up 7 percent from the year before and growth will hang steady, averaging 7 percent per year and reaching $10.9 million by 2010, the story said. …

Is Lowe’s taking advantage of HomeDepot’s customer service woes? The HomeDepot had much of its plans to pour some $350 million over the next six months to boost its sagging customer ratings, which have now fallen below its smaller arch-rival, Lowe’s. But a New York Post report today said that housing market problems are making it difficult for HomeDepot to deliver.

On the likely chopping block? Those self-checkout stations and call boxes that were to allow customers to summon associates to wait on them, the Post reported. “If the macro-economic backdrops continues to worsen, it will be difficult for Home Depot to make good on its commitment to store investment,” said David Schick, an analyst with Stifel Nicolaus.…

We all know that employees are the most likely source of theft at a traditional retail outlet. The latest trend is that identity theft– a huge retail concern with credit cards and especially the newer contactless cards–is also often homegrown.

A fascinating New York Times story today talks about family friends and relatives a likely source of such trust-abuse. The story specifically talks about ex-spouses. This is the problem with Social Security numbers and other lifelong identifications. Once breached, there’s no easy way to start anew.

The most chilling line was about a victim who complained to the District Attorney’s office that multiple checks and an old driver’s license were still missing and that her former friend could still fake her identity whenever she wanted to. The D.A. official told her: “Oh, she won’t do that again.”…

Someone has taken one of the 19 decillion beta sites that Google is running and has turned it into a retail-technology-specific search engine. They started with Google’s main list of various search products and zeroed in on the customized search engine.

That Google creation allows someone to throw in a list of sites that should be searched first before Google searches the rest of the universe. The theoretical result: Much more accurate and appropriate search answers.

The IHL Consulting Group turned it into a specialized retail technology search engine and dubbed it Sophia’s Secret Search. IHL claims to have dropped in more than 1,200 retail and hospitality sites into the engine. It’s free, so it’s worth a shot.…

When IT managers at the $2.5 billion Jack-in-the-Box fastfood chain started looking at contactless payment issues this year, it was clear that the RFID-enabled credit cards would be more than a faster way to get customers processed. It would add to the 2,000-restaurant chain's coolness factor and give young customers another reason to check out the chain. This is especially the case with the demographic that fast-food managers most want to cultivate: 18-34-year-old men.

But taking the next traditional step—limited trials in a handful of carefully-watched locations—wasn't going to make the bold statement needed. The company opted instead to immediately rollout out contactless payment to every one of the chain's restaurants—both for the 1,400 restaurants they own and about 600 that are franchised—in 17 states.Read more...