Evan Schuman's StorefrontBacktalk

In RFID these days, evidence is mounting that pricing consistency has yet to happen. In a report released Wednesday, European RFID analyst firm IDTechEx concluded that pricing logic has failed to visit many RFID facilities.

"Lately, some RFID tags have been sold at high profit and others literally given away. Yet more have been sold at a considerable loss by operations of doubtful viability and all this conspires to make it seem that there is no obvious price-volume sensitivity curve for RFID tags," the report said. Read more...

Google's stock got slapped around again on Wall Street on Wednesday, after what initially appeared to be an isolated report of a search marketshare drop turned out to be not so isolated. Google shares lost about 1.3 percent of their value.

Google started off the week with a report from Piper Jaffray that that Google Checkout is not winning over a lot of retailers, mostly because those retailers don't want to surrender that much customer information to Google. This follows a report that Levi.com had officially abandoned Google Checkout. Read more...

As if to stress the fragility of large E-Commerce in handling large loads with the upcoming holiday season, Amazon.com “experienced an outage of its main U.S. Web site for at least an hour and a half” on Monday, according to the Bloomberg News Service.

“We’re sorry!” the Amazon.com home page said Monday from at least 2:08 p.m. until 3:45 p.m, according to Bloomberg. “An error occurred when we tried to process your request. Rest assured, we’re already working on the problem and expect to resolve it shortly.” Amazon.com spokeswoman Patty Smith declined to say how long the service was down except to say it was for “a short period.”

Keynote Systems confirmed the Amazon outage, although it clocked it at closer to two hours. “The outage was detected in more 50 cities worldwide. The problem seemed to be a Web server/application issue,” said Keynote spokesman Dan Berkowitz. “The physical server was on online, but the application was not or had a significant backend problem. Keynote considers this to be a fairly significant outage.”…

Two AOL employees were fired and its chief technology officer has left the company following a privacy breach in which the Internet search terms of more than 650,000 subscribers were publicly released, according to an Associated Press story Monday afternoon. Maureen Govern, the technology chief, will be replaced on an interim basis by John McKinley, who had held that position before becoming AOL’s president for digital services.

The researcher who released the data and that employee’s direct supervisor were fired. The person, who spoke on condition of anonymity because release of personnel information was not authorized, would not say whether Govern’s departure was voluntary. Although AOL had substituted numeric IDs for the subscribers’ real user names, the company acknowledged the search queries themselves may contain personally identifiable data, the AP story said.

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In an apparently unreleated move, Web traffic analysis firm Comscore Networks released a report showing that "Google's share declined 1 percent from the previous month [June], ending its impressive 11-month run of consecutive gains." That news sent Google shares down, losing 1.58 percent of its value by mid-day. Read more...

Ecometry, which owns Blue Martini multi-channel software, and supply chain vendor GERS Retail Systems have agreed to merge and relaunch under the brand Escalate Retail, the companies announced on Monday. The terms of the deal, funded by Bay area private equity firm Gold Gate Capital, were not disclosed. The combined firm will be run by CEO Stewart Bloom, President John Marrah, and CFO Michael Larkin, with headquarters in both San Diego and Delray Beach, the statement said.

The companies said the combined Escalate Retail will have more than 650 retail clients across North America and Europe, including Home Depot, Williams Sonoma, Nordstrom, Hot Topic, Sainsbury, Harry Rosen, Louis Vuitton, Blue Fly, Z Gallerie, Brooks Brothers, Saks, Lamps Plus, Sony and Raymour & Flanigan.…

Two new reports show that retailers are getting better at answer customer's E-mail, but this summer's load handling statistics predict a very crashy Christmas.

A small part of the reason behind those load balancing problems is constantly increasing traffic and whether equipment upgrades and additions have kept up—Keynote Systems reported more major E-Commerce site outages in 2006 compared with 2005—but a more significant issue is increasing site sophistication. As retailers add to their sites more advanced services—such as push to talk and multimedia demonstrations—it is causing more drag on their systems than they might realize. Read more...

This week’s audiocast looked at a key payment system issue: the feds cracking down on giftcards. We also explored some of the hotter topics this week in RFID, including the enviable positioning of Impinj. In Online, we explored the implications of Amazon’s patent to suggest gifts based on—among other things—religion and sexual orientation.

This week’s panel featured return visits from IDC‘s Pete Abell, former federal prosecutor Mark Rasch and the Retail Systems Alert Group‘s Paula Rosenblum. The newcomer to StorefrontBacktalk’s Week In Review this week was Bruce Cundiff, a former payments analyst for Jupiter Research and today a senior analyst with Javelin Strategy. …

Here’s a terrific case study–courtesy of The Washington Post–about what happened when the FBI paid $170 million to SAIC and it simply didn’t work.

The vendor said the client wasn’t making reasonable demands and it was too chicken to point it out. This is truly a story that IT execs and vendors should both read.…

Please forgive this non-tech item, but the irony of this one is too delicious to ignore. Wal-Mart wanted to improve its image among various urban areas that have been resisting its stores so it hired civil rights legend–and former Atlanta mayor and former U.S. representatives to the United Nations–to smooth the way as chairman of Working Families for Wal-Mart.

Seems that Mr. Young took his eyes off the finer points of diplomacy recently and told The Los Angeles Sentinel. that Wal-Mart “should” displace mom-and-pop stores in urban neighborhoods. “You see those are the people who have been overcharging us,” he said of the owners of the small stores, “and they sold out and moved to Florida. I think they’ve ripped off our communities enough. First it was Jews, then it was Koreans and now it’s Arabs.”

Young quickly resigned and apologized. Maybe Wal-Mart should see if Mel Gibson has some free time? Read an excellent look at this situation in today’s New York Times.…

The 600-store $1.2 billion Beall’s outlet chain did a shootout with Oracle and SAP to replace some inhouse and legacy packages and SAP won, according to comments attributed to CIO Joe Iannello in a Computerworld story.

Iannello said Beall’s plans to use most of the modules in the integrated SAP for Retail software, including the point-of-sale, back-end ERP, finance, human capital management, merchandise management, supply chain and master data management applications.…

Federal regulators on Monday clamped down on bank-issued giftcards, forcing the banks to much more prominently disclose expiration dates and any inactivity fees. Industry observers expect federal authorities to soon extend such rules to retailer-issued giftcards.

These rules could actually help retailers as few retailers want to make a lot of money from keeping unspent giftcard dollars. First, the tax and related business issues make the money less profitable but the much concern is that a gift card's objective is to encourage more consumer spending and merchant loyalty. A card that dies with cash on it represents dollars not spent, up sell opportunities lost (where a consumer uses a $25 giftcard to pay for part of a $50 product) and likely yields a very unhappy customer. Read more...

PayPal’s efforts to move beyond merely being the payment tool for Ebay got a big boost on Wednesday when Barnes & Noble.com said it would accept PayPal. The move could also help Barnes & Noble.com attract a younger demographic, which tends to be more comfortable with alternative payment methods and that sometimes have less easy access to traditional credit cards. That’s a good thing for retailers given the much lower payment fees associated with PayPal.

The news is not that big a deal for Barnes as retail partners of PayPal don’t typically see a huge revenue increase, but it certainly helps PayPal establish itself beyond Ebay, said Bruce Cundiff, a senior analyst for Javelin Strategy & Research and a former Jupiter Research analyst. PayPal is “certainly trying to focus on off-Ebay volume. I’ve heard that between 75 percent and 80 percent of PayPay revenue is still Ebay,” Cundiff said. “They’re really been trying to balance that out for a number of years.”…

Falling within the continuing trend department, 1,500-store chain Bath & Body Works has agreed to start a mobile marketing campaign. Bath & Body adds its name to a laundry list of retailers who have recently started toying with cellphone sales, including McDonalds–which is preparing to allow customers to place orders while standing outside one of their restaurants–and Subway, which is starting to test sending coupons to customer’s cellphones.

Bath & Body is working with Cellfire, which is a free downloadable application that provides coupons from local and national retailers within the user’s geographic region.…

The Spychips people—some privacy advocates who are not fond of RFID efforts—have unearthed another several-year-old RFID demo video, this one apparently designed for the U.S. Transportation Security Administration (TSA). These videos are amusing for two reasons. First, they show how quickly technology evolves and how state-of-the-art from just a few years ago can look positively ho-hum today. And secondly, it shows how far the political climate—in terms of how much security controls Americans will tolerate—has changed.

My favorite part of this video, however, are the many Cold War era Soviet-sounding typos, just to add to the Natasha-Boris theme of the demo itself. “Now we know where he want to fly,” “The ID number is now readed,” “passagers profil” and “would you like to print you boarding pass?”…

Symbol Technologies on Tuesday cut a marketing partnership with Vue Technology with the stated goal of advancing their item-level RFID sales efforts. Some industry analysts greeted the news that the pair, which have been working with BestBuy on item-level efforts, will be working together on various projects as good news.

IDTechEx’s Peter Harrop said that although the agreement may indeed be little more than a marketing news release, “they will be working on state-of-the-art efforts and the industry badly needs this to be done” by somebody. IDC’s Pete Abell offered a similar take, that it’s a good move because it reduces one area of potential fingerpointing and provides the always-popular “one-throat-to-choke for the infrastructure” for item-level RFID.…

As gasoline prices continue to soar to ludicrous heights and consumers get more comfortable with E-Commerce, some retailers are starting to question what to push—and play down—this holiday season. For example, the popular shop-online-pickup-in-store and buy-online-and-return-at-the-store both end up forcing the consumer to use up that precious gas. Do these kind of approaches merit being thought through again?

Two unrelated surveys released on Tuesday—one from Harris Interactive that was paid for by vendor Newgistics and the second from BigResearch that was paid for by the National Retail Federation--beg that question.Read more...

Although RFID hurdles are certainly plentiful in the U.S. these days, China is running into an entirely different set of deployment roadblocks. Given the strategic importance of the growing Chinese market, this is an area that needs to be watched closely. ABI Research issued a report Tuesday that silence from the national government and aggressive marketing by EPCGlobal are combining to create a climate of uncertainty around the issue of RFID standards in China.

ABI Research analyst Junmei He pointed to the three most daunting issues: “Chinese manufacturers’ partners in the supply chain will require them to use RFID tags complying with international standard, EPCglobal UHF G2. At the same time, foreign clients of Chinese manufacturers, who are planning to adopt RFID, will request that shipments carry tags complying with the EPC UHF G2 standard. EPCglobal’s aggressive move in the heartland of Chinese manufacturing is now turning the EPCglobal UHF G2 standard into a de facto standard on the mainland.”

“The reality is that for the Chinese government, it is no long important when the national standard will be released. It is late already,” He said.…

Verifone on Monday confirmed that it is buying the payment systems business of the Dublin-based Trintech Group for $12.1 million in cash. Trintech said that it is divesting its payment systems business to concentrate on its transaction reconciliation software products and services.

Trintech’s board of directors has approved the sale, which is subject to customary closing conditions and is expected to close by the end of August, 2006. In a joint statement, the companies said that Trintech’s unattended and outdoor payment systems will be added to Verifone’s self-service payment, vending, and pay-at-the-pump applications.…

The field of RFID blocking devices is growing almost as rapidly as RFID deployments. A far cry from the homemade crudely-designed aluminum-foiled-lined wallets that were cropping up just nine months ago, companies now want to block unwanted radio frequencies with some style. In Japan, an outfit is selling RFID-blockers adorned with Hello Kitty designs. This would never work in the U.S., as our cats are more independent (read anti-human). “Why should I block this signal? It’s not my credit card. What’s in it for me?”…

When Impinj on Monday rolled out two new RFID chips—the Monza/ID chips with factory-programmed product identification numbers and Monaco/64, the first in a line of chips with user-programmable memory—the industry took notice.

The Seattle Times talked about how long Impinj has been sitting on top of the supply-chain RFID world and RFIDUpdate puts Impinj near the top of a list of likely RFID pureplay IPOs, now that Alien Technology has given up its IPO efforts. Inpinj has one thing going for it: it’s already reported a profitable quarter. For an RFID firm these days, that’s nothing to sneeze in your spreadsheet about.…

Vague guidelines and conflicting audit firm interpretations—coupled with retailers that fall into multiple PCI categories—are making for some unhappy retailers. The problem is less one of how the PCI guidelines are phrased and more a matter of how they are being interpreted, particularly by audit firms the retailers are hiring to prove compliance.

"The guidelines are written fairly broadly and you sit there and say, 'How do we apply them?' One audit firm will tell you, 'No, you can't do this. It's prohibited by the guidelines' and another audit firm will say, 'This is perfectly fine,'" said security consultant Mark Rasch. Read more...

This week’s audiocast looked at issues ranging from payment systems—practical problems with retail PCI deployment as well as a new POS/Loyalty card program from Subway–to a new search feature unveiled on Thursday by Amazon.com and a look at the RFID industry after Alien Technology’s failed IPO. This week’s panelists featured return visits from IDC’s Pete Abell, Solutionary senior VP and former federal prosecutor Mark Rasch and Jupiter Research’s Patti Freeman Evans. Newcomers to StorefrontBacktalk’s Week In Review this week were Cathy Hotka, senior VP for the Retail Industry Leaders Association and Jupiter‘s Edward Kountz. StorefrontBacktalk Editor Evan Schuman moderated.

The PCI discussion was a fascinating realworld look at how PCI is great on paper but much more challenging in live retail environments. No panelist kept out of that free-for-all. You really should listen to it, if for no other reason than to get better excuses for PCI hiccups.…

In a dressing room in the huge Japanese department chain Mitsukoshi, half-dressed customers scan RFID-tagged jeans and then use an IP telephone to check inventory and call for more clothes to be brought in. Workers at the $8.5 billion retail Tokyo-based chain traditionally waited outside dressing rooms, listening for instructions to bring more clothes. In the new experimental system, the workers can stock shelves while waiting for their Voice-over-IP phone to ring and for the customer to ask for something.

But those requests will most likely be quite specific. With most of Mitsukoshi's clothing already RFID-tagged, customers can scan the clothing in to quickly check inventory displayed on the RFID-reader-equipped Cisco phone's 3.38 x 4.5 in. touchscreen display. Read more...