Evan Schuman's StorefrontBacktalk

When Amazon.com has server problems, it shares them with other key retail players, including Target.com and Borders.com. At least that's the E-Commerce lesson those three retailers—and perhaps others—are learning this week. All three retailers began seeing a sharp drop in server response times starting Wed., at about 9 AM, according to sources familiar with their servers. The three are connected because, to varying degrees, Amazon is hosting chunks of the E-Commerce sites of both Borders and Target.

How sharp were the drops? Amazon's uptime is typically one of the best, hovering between 98 percent and 99 percent, the sources said. Starting Sept. 20 at about 9 AM, it plummeted into the 80s and by the night of Sept. 21, it had dropped to 73 percent. But early Sept. 22, it had dropped to 60 percent before the problem was apparently fixed at about 4:30 AM Sept. 22. The drop in response time for Borders and Target fit "the exact same pattern," starting at the same time and increasing and decreasing at the same rate, one source who examined the data said. Read more...

When a federal judge in California agreed that a lawsuit from the National Federation for the Blind can proceed against Target, E-Commerce executives should have breathed a collective sigh of relief.

The lawsuit essentially argues that Target's online operation violated the American with Disabilities Act because it is not designed to easily accessible to blind users. Target's defense has been that the ADA does not explicitly talk about Web sites so, Target reasons, it's not covered. That argument is wrong for so many reasons. For the moment, let's set aside that the argument is wrong legally (the California judge already dealt with that one). From Target's perspective, it's more relevant that the answer is wrong from a marketing, customer service and an IT and design perspective. Read more...

Oracle’s latest earnings report is strong, but is also pointedly trying to “rub rival SAP AG’s nose in the fact that Oracle’s applications business is growing faster,” in this wonderful piece in Computer Business Review Online. The bottom line: Oracle’s acquisition strategy seems to paying much better dividends than SAP’s.…

RFID tags are secure for only a handful of very specific situations, according to a new report from Forrester Research. “RFID is not mature enough yet to protect your company secrets,” the report said. “This technology will inevitably bring changes to business processes, but adopters need to anticipate the potential threats that can arise with new changes and know the limitations of their RFID systems.”

Forrester says that risks include the lack of ability to see modified data on a RFID tag, passive tags lacking confidentiality protection and an attacker’s ability to send their own signals and block others.…

After Yahoo announced today that it would scale back its third-quarter financial expectations because of weak recent Web ad sales, Google and Ebay joined Yahoo in a shared stock-fall ride. Let’s set aside for the moment that Wall Street’s “what have you done for me lately?” financial analysis is not the way to run an E-Commerce company. But there does tend to a lack of there there with much in E-Commerce today.

Yes, online ads are much easier to measure. But consumers are clicking less and less and advertisers are starting to question how strong a sales lead a clicker is anyway. Advertisers are absolutely pulling dollars away from print and putting it online. But will the online ROI keep them for the long term? I have serious doubts. (But, please, while you’re debating that point, click on a bunch of our Google ads. I love being proven wrong.)…

Motorola has taken over RFID and barcode vendor Symbol Technologies for almost $4 billion in cash, which came to about $15/share.

Wall Street saw this as good news for Symbol and not-so-great-news for Motorola, as Motorola shares dropped 50 cents in afternoon trade on the New York Stock Exchange, while Symbol shares increased 3 cents at $14.70 on the NYSE. But its stock price had already soared about 15 percent on Monday when it absorbed rumors that it might be purchased.

Motorola CEO Ed Zander issued a statement that the positions Motorola well for a digital future: “Everything is going digital and everything digital is going mobile. This is especially evident in the way businesses are run today. Motorola and Symbol share the same vision of a digital, mobile world for enterprises that matches the world people enjoy at home and at play.”…

The question of whether smartcarts are truly smart investments got a brief exploration in a recent AP story, that spoke of the struggle of smartcarts to make money, but that seemed to miss the point. Ultimately, yes, Smartcarts are intended to boost profits and sales and I believe they will, assuming the CRM-friendly data they generate is put to shrewd use.

In the short-term, though, they have a much more urgent goal: stop the customers from going elsewhere. They are there to show customers that grocery stores can indeed make shopping efficient and fun again. But like any other sophisticated piece of retail technology, they won’t work if they’re not integrated into the store. A store that throws them out there with just a bunch of videos in the screen–as depicted in the story–deserves to lose its investment.…

The CIO of the nation's largest movie theater chain struggles with how to push 500 popcorn-popping patrons through the refreshment stand before their movies start. For David King, CIO of the $2.7 billion Regal Entertainment Group with theaters in 40 states, the challenge is a combination of arithmetic and consumer incentives.

Beyond staggering movie start times and trying to get people to arrive earlier, King's non-technology options are limited. Among some of the options is stealing some ideas from sports arenas. "We're even going to be experimenting with some things that are ballpark-like where people will take orders in the auditoriums and have food and refreshments delivered to them," King said. "In a variation on that, we're looking at something called hawking, which is like the guys who walk up and down aisles in a ballpark with Cokes and a tray that has a strap around their neck and they sell Cokes out of the tray to the patrons." Read more...

Recent changes to credit card security rules reflect a maturing of the payment rules, with wireless monitoring requirements made much more strict while file software integrity monitoring frequency and the encryption demand have both been softened.

"This is a bow to reality," said Mark Rasch, a former federal prosecutor who now specializes in retail security issues. "The first version was more of a Utopian of what Visa and MasterCard thought were workable standards based on what people should do. This is a minor tweaking based upon what people are doing." Read more...

This week’s show included a special guest, David King, CIO of the Regal Entertainment Group, which is the nation’s largest movie theater chain, bringing in about $2.7 billion a year from theaters in 40 states. King lead a spirited discussion about the new PCI changes and how his chain is viewing them, including a new wireless requirement. On the RFID front, the panel looked at the new Gen2 support promised from both Wal-Mart and the Metro Group as well as what may be truly behind it. Metro’s experiment with physically separating payment from checkout also prompted a debate of whether two lanes would be seen as being slower even though it’s faster.

Other than CIO King, our panel this week featured the Retail Systems Alert Group’s Paula Rosenblum, IDC’s Pete Abell, Chris Noell from TruComply and former federal prosecutor and security consultant Mark Rasch. StorefrontBacktalk Editor Evan Schuman moderated.…

McDonald’s in Japan is letting cellphone-touting consumers instantly see the nutrition information–such as it is–for all of their fastfood, courtesy of a barcode printed in the food’s wrapper. According to a Cellsuite news story, the wrappers have QR codes printed on the labels, taking users to a site that will detail the calories and fat of the product.

The piece says this should save McDonald’s costly printing runs to keep the data current, but I’m not so sure that information would change that often, unless the product itself is tweaked. But it also says this could reinforce McDonald’s image for selling healthier food. Although the openness is to be applauded, I’m wondering if it might have the opposite result. When I’m eating a quarter-pounder, the nutrition specs are the last thing I want to see.…

The German-based retail giant The Metro Group this summer started quietly experimenting with a radical change in supermarket layout and procedure: physically separating where groceries get scanned and where customers make their payments.
The move is designed to both cut costs and accelerate customers through the checkout process, said Gerd Wolfram, the groups' chief technical officer and the managing director of Metro Group Information Technology. Read more...

Two huge global retailers—Wal-Mart and the Germany-based Metro Group—pledged Tuesday to only support Gen2 systems from now on, in a move that one RFID analyst said was intended to do some damage control because of an RFID "pullback" from another global retailer, U.K.-based Tesco.

Wal-Mart opened the day by issuing a statement from CIO Rollin Ford promising that "all Wal-Mart installations moving forward would only read Gen 2 tags. As the remaining pallets and cases with Gen 1 tags make their way through the distribution network, Wal-Mart will convert all of its systems to only read Gen 2 tags." Read more...

Look for Symbol Technologies next week to introduce a mobile Gen2 RFID reader that is designed to be integrated into forklifts, pallet jacks and stretch wrappers. The unit—to be dubbed the RD5000—runs on Windows CE 5.0 and can use Bluetooth. At a cost of about $8,000, though, it’s a tad bit pricey. The vendor will also claim that it saves battery life because it uses sensors to detect the device’s proximity to tagged items, shutting down when motionless or out of tag range.

“Previous RFID deployment strategies have depended heavily on the predictable movement of goods, with RFID readers installed at ‘choke points’ such as dock doors,” said Anthony Bartolo, vice president and general manager of Symbol’s Wireless Infrastructure and RFID Divisions. “By RFID-enabling material handling equipment, organizations gain increased visibility to items in the supply chain all the way to the shelf or staging area.”…

Our panel this week whipped up some sweet insights into Starbucks’ headaches with an electronic coupon that they had intended to be strictly localized but the Web had other plans. It also jumped into the renewed interest from some major retailers into using closed-circuit video feeds for a lot more than catching thieves, including CRM and preventing child abductions.

Our panel this week featured IHL President Greg Buzek, the Retail Systems Alert Group‘s Steve Rowen, Forrester Research‘s Sucharita Mulpuru and The Lakewest Group‘s Sunita Gupta. StorefrontBacktalk Editor Evan Schuman moderated.…

Watch for a mini pricewar with electronic labels to start at this month’s Demo conference when an outfit called W5 Networks says it will be the first to drop below $5/label, with a $3.50/label introduction. The company is also claiming to be “the first to provide retailers with feature-rich promotional capabilities (such as club card pricing and buy one get one free), which has also been a barrier to replacing paper labels with electronic ones.”

The company has a former retail CIO (former Ross Stores CIO Richard White) at its helm along with cash from US Venture Partners and Thomas Weisel Venture Partners. Board members include the former chairman of Safeway Stores, Pete McGowan, who is also the owner of the San Francisco Giants.…

Plenty of options is typically seen as a good thing, unless the screen involved is the size of a cellphone monitor. But which options are displayed and which are hidden? A Santa Clara, CA, cellphone software firm has been awarded a patent on its method of allowing the cellphone itself to make that selection based on the buying pattern of the consumer.

July Systems, which announced the patent today, argued that the system's support of realtime personalization is "key to overcoming screen size and other limitations" to help "the mass adoption of mobile video, games, music and other services." Read more...

Networked CCTV cameras are doing a lot more in retail than catching shoplifters. The latest track how consumers react to specials and can digitally find abducted children. With a system being piloted today by CVS and other large retail chains, a lost or abducted child has a lot more protection than from a mere Code Adam.

When a parent reports a missing child, the system can—within a few minutes—locate the video of when the parent and the child were last together and then see footage of exactly where the child went and with whom, even showing where the child is at that moment, assuming the child has not left the store. Read more...

MasterCard on Monday announced the first trial of its PayPass wristband, pledging to onload (excuse me, give away) the wristbands to the first 5,000 fans entering Giants Stadium for the New York Giants-Indianapolis Colts football game on Sunday. MasterCard’s people have painted the giveaway watches with the Giants’ team colors and pre-loaded them with $25, all ready to be used at the game’s concession stands.

The $25 figure was selected because it’s the magic number to avoid the customer having to give a signature and the merchant having to provide a receipt. The irony of pushing contactless for an extreme contact sport was not lost on the MasterCard folk. Maybe their next move will be to offer it to Bausch & Lomb? …

A major analyst firm will soon report that most retailers still do not have a formal incident response plan for consumer data security. The most likely reason: such a plan would tell retailers things they don't want to hear.

Why would they retail IT execs do that? They know that any reasonable data security and privacy policy would set stringent restrictions on how data can be used, how long it can be stored and how many people can have access to it. The longer such a policy is delayed, the longer the data can be used in whatever way IT and Marketing feel like using it.Read more...

Think of it as a marriage between Amazon's consumer review comments and Youtube's homemade videos. But will anyone turn little movies into big money?
Buy.com is trying to merge two of the Web's most powerful sales tools—consumer-written reviews and homemade video—into a salestool that will both tap a younger demographic and theoretically add more credibility to heretofore anonymous content. Among the initial roadblocks are that a relatively small number of people will likely take the time to record and transmit a video review (which is a lot more troublesome than typing out a few sentences of comments) and the essential review-and-approval today must be done manually (which, if the technique becomes popular, could quickly translate into a huge labor and cost challenge). Read more...

Some major retailers—including The Home Depot, CVS, Bloomingdale’s and Macy’s—have brought a new video security system in-house for evaluation, while officials at J.C. Penney have also expressed. This system is from a Cambridge, Mass., company called IntelliVid, which itself is mostly a spinoff from MIT’s artificial intelligence group.

The system itself claims some very science-fiction-sounding capabilities, such as that the software can watch customers, examine body and head movements and determine who is about to steal. The system then uses multiple closed-circuit video cameras to track the suspect through the aisles and—camera position permitting—out into the parking lot. The claims are interesting enough, but with such pedigree retailers—including Babies R Us–testing out the system, there might be something more here than a high-tech take on low-res images. (Related note: BusinessWeek just did a wonderful overview piece on retail anti-shrink techniques.)…

For your listening pleasure this week, you can hear us discuss video. (That’s probably more fun than watching us discuss audio.) Buy.com’s video reviews effort, to be precise. Will consumer-generated video content shake up E-Commerce? Also, the panel looks into why fewer than half of all retailers today even have a formal plan for dealing with consumer data security breaches as well as whether technology deployments today are often hurting retail sales.

Our late summer panel this week featured IHL President Greg Buzek, the Retail Systems Alert Group’s Steve Rowen and ABI Research’s Michael J. Liard. Special industry guest was Dave Samuel, co-president of Grouper Networks, which is now part of Sony Pictures Entertainment. StorefrontBacktalk Editor Evan Schuman moderated.…

Please click to listen in on this week’s audio discussion, as the panel rips into Google’s substantial new challenges, with both Google Checkout and marketshare, the question of whether the major E-Commerce sites are ready for the holiday rush or the holiday crash, and a European look at RFID pricing and ROI struggles.

Our inquisitive panel this week included returning panelists Paula Rosenblum from the Retail Systems Alert Group and former federal prosecutor and security expert Mark Rasch plus Safa Raschtchy, senior research analyst with Wall Street’s Piper Jaffray (who authored the initial report that questioned Google Checkout’s retailer acceptance) and Ben Rushlo, from Keynote Systems Evan Schuman, Editor at StorefrontBacktalk, moderated.…

When Amazon.com crashed for almost two hours on Monday, it might have meant little were it not for the fact that a major industry report had foreshadowed it just three days earlier. Do related problems with Wal-Mart and Google show a trend? Late last week, Internet traffic monitoring firm Keynote Systems issued a report that said many of the largest E-Commerce players will face major load-handling challenges for the holidays if they don't make major changes quickly.

To help out, Amazon generously knocked out its own servers for almost two hours on Monday. OK, OK. Amazon probably didn't crash just to help Keynote make a point. But it's timing was impeccable nonetheless. Read more...