Evan Schuman's StorefrontBacktalk

In further proof that consumers make very different transactions when they think they’re being observed by other shoppers, one regional convenience store chain is finding sharply increased revenue—and profits—from sandwich sales when orders are placed privately.

Taking things one step beyond the anecdotal evidence that E-Commerce can more easily sell items that are less environmentally friendly than can in-store, one regional convenience store chain has discovered that when consumers make sandwich orders privately at a kiosk (away from prying fellow shopper eyes and ears), they tend to be much more generous with calorically intense (and profit plentiful) add-ons and related sides, including extra meat and cheese. Instead of having customers order the sandwiches at the counter—out loud, to a clerk, in front of everyone—they now do it privately at a kiosk and then take a printout of their order to the cashier, who makes the customized item, bags it and hands it to the customer. This approach is faster for the associate, more private for the consumer and more profitable for the chain. Who said privacy can’t be profitable?…

But the $561 million chain Wet Seal, which has 504 stores in 47 states, Washington, D.C., and Puerto Rico, kept its identity secret. No more, though, and that’s the way Woodlock wanted it.Read more...

Another bizarre note: the psychiatrist—without comment—quoted Gonzalez about how fit he appeared. "At one point, [Gonzalez] explained that he could no longer do the 5,000 pushups he once did regularly and probably could do only 600." Hold on a second. Didn't the good doctor detect even a faint whiff of BS? Presumably, the claim meant "in one continuous session" or it doesn't mean much. The Guinness world record for pushups in an hour is 3,877; it was set in Indonesia in 1988.Read more...

A new filing on Wednesday (March 24) from TJX had the chain refusing to offer the specifics behind its loss claims in an attempt to fight a federal subpoena. Attorneys on both sides raise some legitimate questions about how to fairly calculate the cost of a breach. Is it limited to what is taken or to what the thief attempts to take? Should the loss include what was actually—and successfully—accessed, or should it assume that when a card with a $10,000 limit is taken, a $10,000 loss—regardless of what the thief did—should be recorded? If class-action lawsuits are filed (and they will be filed), should the cost of lawyers and courthouse travel be included? What about payment for additional security? And perhaps a new POS system that includes that better security?Read more...

PCI Columnist Walter Conway opines that he hates to do a bunch of work and get nothing for it. "That's too much like paying for dinner and then not sticking around to finish dessert. Often, merchants prepare a thoughtful risk assessment and then file it away (a.k.a., 'shelfware') until their QSA returns the next year, at which time it gets dusted off, reviewed and, hopefully, updated. If that describes your situation, you could be missing a golden opportunity to reduce your PCI scope, lower your risk and cut your cost of PCI compliance."Read more...

ABI Research is predicting that overall retail tech spending will grow to nearly $21 billion in 2014, an almost 50 percent increase from last year. The global integrated POS new sales segment alone will likely be at $6.56 billion this year, growing to $7.2 billion next year and $8.5 billion by 2014, said ABI Research Director Larry Fisher.

In North America, those integrated POS figures will be $3.3 billion this year, barely rising to $3.6 billion next year and inching up a bit more to hit $4.3 billion by 2014. The slower growth in North America is overwhelmingly because of installed base. As the sales are limited to new sales, it’s going to reflect much smaller percentage growth for an established market such as North America. …

First, Procter & Gamble and other major manufacturers started direct selling, undermining their longtime retail partners. Now comes word that Visa is setting up its own virtual shop to move products. What, Brutus, the sharp, 8-inch interchange dagger wasn’t enough? You had to go for the jugular?

Visa’s E-Commerce move, called Rightcliq, is actually a rather clever CRM move to collect more data on consumers directly. “Rightcliq will enable consumers to track their purchases in one convenient location. This removes the hassle of remembering tracking numbers, digging through confirmation E-mails or having to double-check delivery dates,” a Visa statement said. “The information will all be stored in Rightcliq, giving consumers more control over their online shopping experience.” And here’s the unexpected kicker: The service will accept “other payment options, including competing brands.” Visa is setting up an E-Commerce arena in which people can make purchases on their Amex card? That says everything that needs to be said about how much Visa values those extra CRM tidbits.…

Strong mobile applications today understand the need for extreme efficiency of movements to allow for actions with as little effort as possible. That’s been the problem with mobile payment trials; they simply haven’t proven to be any faster than swiping a credit card. A new PayPal iPhone app—dubbed Send Monday—grasps this ultra-convenient attitude and attacks the nightmare of splitting checks.

By simply banging two iPhones together (gently, please. Those things are mostly glass), payment data is shared. “With bump, users can put two iPhones together and funds are quickly transferred between their PayPal accounts,” a PayPal statement said. “The Split Check feature lets users conveniently divide and quickly reimburse each other for the cost of a meal, including tip and tax, for up to 20 people. Collect Money allows users to request money from multiple people for a joint gift, team dues, concert tickets and more.” …

What would happen if we turned NFC on its head? For example, rather than the phone making a payment to the POS, it makes a payment to the restaurant's bank in the cloud. What would happen if the restaurant deducted the cost of lunch from Facebook credits? What if the guest could earn a free lunch by promoting the brand on Twitter? What if restaurants gave guests their menus on an iPad? What if that menu was customized to each diner’s likes, dislikes and allergies? What about a restaurant booth that has a video-conferencing setup that allowed to people to have lunch together without being in the same restaurant? Read more...

And he answers: Once your scope is addressed, you can tackle the other PCI questions--like separation of duties, encryption, key management, governance and the ability to conduct forensic investigation. You also will need to include due diligence of your cloud provider in your procedures for engaging a new service provider (Requirement 12.8). Personally, I’d like to know who else is sharing “my” cloud. Read more...

A new report from IHL concludes that “after contracting 9 percent in 2009, the Europe/Middle East/Africa region is in the process of seeing growth return to the POS market for the first time in two years.” IHL thought that Russia’s situation was especially illustrative. Following an 18 percent plummet in POS shipments last year, “Russia’s economy has stabilized and shipments should grow 6 percent in 2010 and once again see double-digit growth in 2011. If oil prices increase to more than $100 per barrel, the shipments will increase further,” said IHL President Greg Buzek.

“For most markets such as UK, France and Germany, the pullback of the last two years means there is pent-up demand because equipment has been kept longer than it normally would. The region did not see the same level of store closures and contraction that we saw in North America, due to employment laws that preclude closing stores in many countries, and that limits the used market for POS. So everything out there simply got older. Thus the pullback of the last two years increases the growth chances moving forward,” Buzek said. “Instability in Greece, financial issues in Dubai—which had been seeing strong growth—tight capital markets and the prospect of conflict between Israel and Iran remain drags on the region’s growth, but 2010 will grow. UK, Germany, France and Scandinavia will each see growth for the first time in 3 years. And preparations for the World Cup are driving adoption rates in South Africa.”…

Last Thursday (March 11), Google made a major—albeit extremely preliminary—move into local inventory search through a deal with a handful of major chains: Best Buy, Sears, Williams Sonoma, Pottery Barn and the Vitamin Shoppe. But instead of working out this process internally and then bringing in retailers—or the reverse, with retailers figuring it out first—Google's objective is to run the earliest stage tests with various chains "so we're both learning how to do this in parallel," said Paul Lee, Google Product Search's business product manager.Read more...

The power of a mobile coupon program is not just in the convenience of the always-with-you device format. It's in the customizable nature of it and the related upsell and CRM implications. Why wouldn't Target offer consumers the ability to pick and choose—from their desktop machine—from a huge selection of offers? Those choices would provide valuable targeting information on an individual shopper basis. And if Target's decision is indeed to offer one blanket list of mobile opportunities, why not use existing CRM data to target certain offers to specific customer segments? Plus, why update those offers only once a month?Read more...

The Nokia 6212 used in the trial has a list price of $240; trial participants paid $110. But if the consumers made 12 purchases, they got to keep the phone for free. With six purchases, the phone's cost dropped to $55. Some 86 percent of participants made more than 12 purchases and, therefore, got the phones for free. The report dubbed the 18 percent who made exactly 12 transactions "gamers, customers who want to participate at exactly no cost to themselves."Read more...

"Real buyer and seller E-mail addresses will be hidden by our systems. All sellers and buyers will be assigned an Amazon E-mail alias," said an Amazon statement. "This will enable both parties to continue communicating as they do today with standard E-mail providers (such as Yahoo, Hotmail, etc.). However, that communication will happen via their new E-mail aliases instead of their real E-mail addresses. All communication will be stored and available for review in case of disputes." This move is very interesting. From a brand-building perspective, there are few things better than sitting back and creating a huge room for tons of your customers to gather and talk about you.Read more...

Although true item-level RFID is still years away, ABI Research is still confident that RFID sales will hit $5.4 billion this year. And it projects that number will reach $8.3 billion by 2014. The tagged segments expected to lead the way include real-time location systems, baggage handling, animal ID and a smidgen of item-level use in high-end fashion and other similar high-priced retail offerings.

“Other key opportunities include electronic vehicle registration, continued penetration of RFID-enabled e-ID/e-government documents—including health cards—and continued expansion of library systems. Also worth watching: slowed but continued progress in retail CPG supply chain management and multiple flavors of asset management that leverage RFID technologies, including specialty passive UHF tags,” said ABI’s practice director, Michael Liard. “Modernizing applications for RFID will grow more rapidly than their traditional predecessors such as access control, automobile immobilization, electronic toll collection and others that account for slightly more than 61 percent of the total market today. These applications are expected to grow 6 percent compounded annually from 2010 through 2014. In contrast, modernizing applications—animal ID, asset management, baggage handling, cargo tracking and security, POS-contactless payment, RTLS, supply chain management and ticketing—are forecast to grow roughly 19 percent in the same time period.”…

Failing to comply with Requirement 0 may be due to inertia or ignorance or both. Regardless of the reason, the result is excessive and unnecessary spending on people, process and technology, together with a lot of frustration. Read more...

Think video store, convenience chain, 24-hour restaurant and gas station. Hacking away out of boredom is a very different profile from someone looking to harm the chain or even steal something to sell later.Read more...

But one group of cyberthieves in Utah—as yet uncaught—has hit about 200 gas stations in that state with a toothy tweak: Bluetooth-y, to be precise. By arming their skimmer with a Bluetooth transmitter, the stolen card data was beamed out indiscriminately to anyone nearby—make that very nearby—who happened to choose to listen for it. When such a device is found by law enforcement, it reveals nothing to point to the thieves' location—past or present—and nothing to even indicate how long it's been there. The devices in the Utah case had no local storage whatsoever, police said; they simply grabbed the data and instantly beamed it away.Read more...

Amazon has steadfastly pushed back against state tax efforts, primarily by canceling affiliate relationships in states that try to hit up its affiliates for sales taxes. The states feel they can take this approach because, although Amazon might have no physical presence or storefronts, the same isn't true for affiliates.Read more...

"The product now doesn't disappear from your mind after it’s sold. It actually just begins a different lifecycle," said Larissa Hall, the Best Buy general manager in charge of the consumer end of Best Buy's new venture. "Why let eBay have all the fun? You don’t throw away a car when you're done with it. Even a broken DVD player is worth something."Read more...

Such a system obviously can’t be unleashed on the Internet. Consumers will not tolerate a system that is difficult to use. For chains, the challenges often come from tracking data in one way while marketing/selling it in another. Add to that the complexity of each franchisee having unique, local store marketing offers and the responsibility for its own pricing, and what seems very simple can quickly become very complex.Read more...

What is the business case for using an Internal Audit instead of a QSA? Could the training—whether for a Level 1 or a Level 2 merchant—be used to build on or supplement a QSA? That is, will the Merchant QSA training be most useful to merchants as a valuable accessory rather than an entirely new PCI wardrobe?Read more...

The settlement against five-year-old ControlScan said that "contrary to the statements" ControlScan made to retailers, the company "in many instances conducted little or no verification of the privacy and/or security protections for consumer information provided by companies displaying its Business Background Reviewed, Registered Member, Privacy Protected and Privacy Reviewed seals. Instead, in many instances, ControlScan provided the Registered Member seal to a company that failed to qualify for the Verified Secure seal because an electronic scan of its Web site identified an actual or potential severe vulnerability on the Web site and permitted the company to display the seal indefinitely while taking no action to assess whether the company was working to resolve any vulnerability identified by the Web site scan."Read more...

This problem is likely going to get much worse as the efficiencies of cloud computing tempt companies to place the contents of server after server on the cloud for faster and easier access. Easier access is certainly right, but for whom? But cloud computing is not the only new target for security holes. Mobile computing and especially M-Commerce have an even greater potential for issues. Beyond the inherent breach possibilities with anything wireless, retailers are going to feel the need to push more functionality onto these consumer devices.Read more...