Evan Schuman's StorefrontBacktalk

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? …

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.…

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. …

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.…

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...

In what one executive of the $9 billion 26,000-restaurant Subway chain dubbed "the single largest integrated cash card program in the world," the new card handles payment, instant loyalty rewards and highly-targeted promotions that can be tracked by customer.

The program takes a very basic mag-striped giftcard and, through a unique 16-digit identification number, takes the card through Point Of Sale (POS) through to CRM. "It's a very sophisticated CRM program," said Marina O'Rourke, Subway's director of retail technology. "It has the ability to target consumer behavior and reward and entice that behavior. It can look at cardholders in a geographic area. We can drill down to the store level. We want to understand if we can change behavior by offering, let's say, a free cookie." Read more...

American Eagle Outfitters is learning a PR lesson, even though it appears they never did anything wrong. Apparently, about four years ago, the retailer was given an RFID presentation by a systems integrator called CompEx Inc. Included in the demo was an animated presentation on how effectively and secretly RFID could gather consumer data.

That presentation found its way to the privacy web site of Katherine Albrecht, a noted RFID opponent and author. To read the full story,
please click here.…

A new mobile payment system–called PayCash Mobile, from Cyphermint–will make its appearance at Regal Cinema and Barnes and Noble.com soon, according to Cyphermint CEO Joe Barboza. The new system will charge retailers about 2 percent of a transaction and will use a cellphone number and a PIN to authenticate transactions that are then paid for with a traditional credit card.

The benefit of this system compared with others from rivals such as MobilLime, Barboza said, is that it processes payments in a matter of seconds compared with hours for MobileLime.…

This week’s audiocast panel discussion of the StorefrontBacktalk retail technology week that was …. was decidedly global in topics. This week’s group of retail technology analysts that sat down late Thursday was Patti Freeman Evans from Jupiter Research, Sucharita Mulpuru from Forrester Research and Paula Rosenblum from the Retail Systems Alert Group. StorefrontBacktalk’s Editor Evan Schuman moderated.

The group opened with a hard look at the German Metro Group’s Item-Level RFID plans and whether Wal-Mart can survive as a retailer outside (and, as one panelist argued, inside) the U.S.

The group also discussed retail attempts at mobile marketing, focusing on the Subway chain’s experimentations with cellphones, which raised issues of how far ahead of the U.S. much of Asia and Europe are and how that should impact retailer’s global IT strategy.

The panel also jumped into a report expected next week from Jupiter Research that looked at how e-tailers—including Netflix–are making some surprising decisions about incorporating user-generated product reviews.…

With a year of charges under its moneybelt, JP Morgan Chase on Monday released first-year statistics for its contactless Blink cards, trying to bolster the argument that the cards deliver better than traditional magstripe cards and cash.

The stats gathered from the seven million contactless Chase cards issued do indeed show strong improvements over older options, but there is some question about how much of those improved numbers are because consumers liked the contactless cards better than the alternatives or because of the cards' novelty. If those statistics hold or improve in the next year or two, as the contactless payment's gee-whiz factor fades, that may be much more meaningful. Read more...

Another group of retail technology analysts sat down Thursday late afternoon to look at the retail technology week that was. This week’s panel independent retail technology consultant John Fontanella—veteran analyst with the Aberdeen Group and AMR Research—along with returning guests IHL President Greg Buzek and the Retail Systems Alert Group’s Paula Rosenblum. StorefrontBacktalk‘s Editor Evan Schuman moderated. This week’s topics were Alien’s delayed IPO and the problematic ROI picture of kiosks. If some disappointing earnings and a few economic darkclouds are any indication, the retail tech sector may be in for a serious downturn. If so, what segments will fare well and which will likely get bloodied?

A few vendors have been pushing digital watermark technology—somewhat equivalent to a 21st Century microdot—as a clever way to bridge the physical store and online worlds, without the need for keyboard interactions. The cellphone becomes the remote control. Is this where much of retailing is headed? Will it work? What are the practical implications for customer service?

Are there topics or panelists you’d like us to consider for next week? Please don’t be shy.…

We're starting to hear about more digital watermark applications, where the image-capturing (camera) and communication capabilities of cellphones make them ideal tools to connect printed material with Web sites. We reported last month about NeoMedia and its digital watermark flavor called iPOS (Interactive Point of Sale). This week saw an Oregon company called Digimarc roll out its version in a series of cafes in Japan.

The two approaches illustrate the versatility of this hybrid, which literally is multi-channel as it bridges a customer experience from a purely brick-and-mortar activity--such as looking at a poster in a promotion display--to online. But it does it with virtually (no pun intended) no physical activity on the part of the customer. Read more...

The $9 billion Subway chain of more than 26,000 sandwhich restaurants is going to be ringing customers up with its six grams of fat or less messages in August, as one of its franchisees experiments with mobile marketing.

The franchise has struck a deal with mobile payment vendor MobileLime "to market to preferred customers in real-time by offering alerts and discount coupons to cell phones," according to a MobileLime source.Read more...

At the end of every week, StorefrontBacktalk.com will assemble some of the industry’s top consultants, analysts and IT executives to discuss that week’s retail tech developments. We inaugurated our StorefrontBacktalk Week In Review on July 21.

The July 21 panel included Pete Abell from IDC, Paula Rosenblum from the Retail Systems Alert Group, Greg Buzek of IHL and Mark Rasch, a former federal prosecutor who today serves as VP for Solutionary.

The panel–moderated by StorefrontBacktalk Editor Evan Schuman–ripped into a wide range of topics. Listen to Rasch, Rosenblum, Buzek and Abell discuss the new PCI changes announced by Visa or Rosenblum, Rasch and Buzek debate how multi-channel will likely do this holiday shopping season. Abell tackled HP’s RFID-rival Memory Spot alone while Rasch, Buzek and Rosenblum ganged up on self-checkout trends, including a fascinating discussion about self-checkout obliterating impulse purchases. Rosenblum and Buzek also argued about workforce management technology, concluding that the larger companies are–much more than they initially thought–avoiding workforce technology.

Please listen and shout your feedback to us.…

Vendor-initiated surveys have a remarkable history of establishing that the vendor’s service or product is every bit as wonderful as the vendor’s always said. Given the tremendous discretion involved in phrasing the questions, choosing who is being asked and how the answers are analyzed, self-serving vendor research shouldn’t change a lot of minds.

That said, MasterCard PayPass on Tuesday released “internal MasterCard data”–some of it dating back to last September–that showed the average ticket being about $20 and that consumers used credit cards about 18 percent more once they became contactless. “Though PayPass technology can also be used for transactions exceeding $25 (at which point a signature or PIN is required for verification), roughly 75 percent of all PayPass transactions were for purchases below $25 and approximately 45 percent of all PayPass transactions were for purchases below $10.”

To the extent that the point is that consumers are carrying less cash than a year ago, they clearly are. But a lot of that involves cultural changes, making it not clear how much of that 18 percent increase would have happened anyway.…

Symbol Technologies and Intermec today officially ended their 16-month-old lawsuit that had Symbol accusing Intermec of infringing various Symbol bar code scanning and wireless patents. Without announcing the terms, the companies issued a joint statement that they “have reached an agreement that settles all outstanding intellectual property (IP) disputes between the two companies.”

“Under the settlement agreement, Intermec and Symbol have cross-licensed certain patents, have entered into four-year covenants not to sue with respect to remaining patents, and have released patent infringement damage claims that may have existed on the settlement date or may arise before the covenants expire,” the statement said. Last September, the pair had settled the RFID portion of the dispute, with today’s announcement resolving the non-RFID wireless portion.…

Hewlett-Packard unveiled a memory chip the size of a tomato seed on Monday in its Palo Alto laboratories. The tiny chip, called the Memory Spot, can be attached unobtrusively to any object and carry media or data. HP is positioning the chips as a direct alternative to RFID.

“It has some of the characteristics of RFID but it’s very different because it’s orders of magnitude different in bandwidth,” said Howard Taub, vice president and associate director of HP Laboratories, told PCMagazine. “It’s like comparing a monkey and a human. There are some similarities but the capabilities are very different.” The Memory Spot has a 10 megabits-per-second data-transfer rate and can store up to 4 megabits of data, although the demonstration chips stored only 256 kilobits. The chip has an integrated antenna, which is why it is so much smaller than an RFID chip, which gets most of its size from the separately attached antennae. It receives power through inductive coupling from a special read-write device that extracts data from the memory on the chip. RFIDUpdate had an excellent analysis on Memory Spot versus Gen2 while PC Magazine did a good write-up of the announcement itself.…

Broadcom has introduced an RFID chip that won’t transmit sensitive information until it authenticates with a fingerprint reader. Citing applications included physical access and contactless payment, the semiconductor player rolled out the BCM5890 in a partnership with biometrics company Privaris, according to a report in RFIDUpdate. “A key feature is that the approved fingerprint information is stored on the fob, so the authentication is all done ‘on-board’ and the system does not need to transmit the scanned fingerprint to a remote database for verification,” the story said. To read the full RFID Update story, please click here.…

Giftcards are quickly becoming an extremely popular retail payment option, but the traditional analog cards suffer from a lack of security when used for E-Commerce. One company has a two-factor—and possibly three-factor—way of dealing with that.

Imx Solutions said the products are initially being used by Sears, Kmart and CompUSA along with television’s Ultimate Shopping Network (USN). The giftcard is a mini-CD that uses a company-issued–and hidden–password plus it takes a page from the one-time-password-issuing devices because it has a series of encrypted codes on it that needs to match up with a list of encrypted codes on an Imx server and the correct code “changes twice a minute.” To read the full story, please click here.…

Bob DeRodes, CIO for The Home Depot, has some non-traditional plans for the $81.5 billion home improvement chain, including routing calls to store personnel working in the aisles. “We are piloting a system now so that when a consumer calls in, rather than going to a store call center, the call gets transmitted to the right associate who is on the floor helping customers in between calls,” DeRodes was quoted as saying in RISNews magazine.

“We also now have carts in the aisles using .NET and wireless for an automated new process for shelf labels and inventory checks” and closed-circuit TV “has cut losses at the back door. Run with our POS system, it has slashed shrink at checkout. Play back of accidents has showed how to make safety changes and has helped to identify false claims.” The chain is also toying with using customers’ personal PDAs as a networking tool. “It’s not ready yet, but imagine the impact of customers using PDAs that they already own and know how to use to find what they want or to compare products.” To read the full story in RISNews, please click here.…

As contactless payment devices become more adopted by consumers, retailers need to be ready to handle them and, rightly or wrongly, take the blame for associated problems. Popgadget just did a fascinating look at Citibank’s latest RFID PayPass card. It references a Gearlog post about the pros and cons of such a device, along with a hacker’s take on contactless card security.

Little of this is new, as we reported a year ago Shell Canada’s experiments about contactess payment security. But as these cards start to come into common usage, it’s not a bad idea to look at the latest threats and be prepared to deal with the complaints. Trust me: they’ll come. It’s still worth doing, but the easier a system is to use, the more problematic its security profile will be.…

Limitations with radio frequency identification (RFID) technology have delayed a nationwide rollout at supermarket giant Tesco by several years, according to a report in VNU’s Computing. Tesco had planned to install RFID tags and readers in 1,400 shops and 30 distribution centres by the middle of this year, but has so far completed just 40 stores and one depot.

Instead of tagging individual products, it will now permanently tag transport items such as cages and trolleys and install the technology over several years. The supermarket says it has struggled with radio frequency standards, a high concentration of readers in the warehouse that affect performance, slow read speeds and low tag quality. To read the full story in Computing, please click here.…