Evan Schuman's StorefrontBacktalk

A report due out Tuesday from the IHL Consulting Group sees grocers aggressively moving to upgrade to self-checkout systems, even before they replace or upgrade the aging point-of-sale systems they are based on. But another retail technology report—released Monday by the Aberdeen Group—has a very different self-checkout take, calling retail self-checkout "an absolute failure."

The reports on their own do not directlty contradict each other, in that the IHL report simply says a lot of retailers will move to self-checkout and the Aberdeen report doesn't dispute the intended purchases, but merely the wisdom of it. To read the full story,

There’s just something about being a $338 billion retail chain that casts huge significance over even trivial moves. When the world’s largest retailer moves into pharamacy sales, it quickly becomes the largest pharmacy. It starts to do some grocery and it quickly dominates a third of all grocery sales.

So it is with Wal-Mart’s in-house video system. It’s just a system to broadcast ads to store visitors, but as IHL Consulting Group President Greg Buzek has said, “it has a bigger audience than any TV show.” This week, that “tv show” moved into the next phase, with an order for 100,000 flat panel screens, designed to deliver product messaging for specific aisles via eye-level plasma screens. Wal-Mart’s IPTV network will run transmit over–logically enough–IP connections. Wal-Mart, which is working on the in-store media network with Premier Retail Networks, is considering future capabilities that might be linked into customers’ actions, said PRN VP Genet Garamendi.…

One of retail's most important IT executives--Circuit City CIO Mike Jones--has left the $11.6 billion chain, with the chief IT job going to his VP of business applications.

Jones had a very creative and visionary perspective for the chain and a company statement left unclear the circumstances of his departure, although the vaguely ominous phrase "to pursue other interests" was used. The statement said Jones will relinquish his CIO role "immediately" but added that "he will remain at the company until mid-November to transition his duties to his replacement."Read more...

The changes for this holiday’s shopping season—both online and offline—were the highlights of this week’s StorefrontBacktalk Week In Review show, featuring panelists Patti Freeman Evans, from Jupiter Research, Cathy Hotka, from Cathy Hotka & Associates, Richard Mader from the National Retail Federation and former federal prosecutor Mark Rasch. StorefrontBacktalk Editor Evan Schuman moderated.

Jupiter’s Evans anticipates more sophisticated search capabilities as the most interesting development expected, along with earlier purchasing. The panel also explored whether more indirect issues—such as interest rates and gasoline prices—influence shopping behavior. The panel also explored whether new standards proposed by the National Retail Federation to make it easier for e-tailers to send data to price-comparison sites will also make it harder for retailers to hide selling identical products for higher prices. To listen to the pricing and standards discussion, please click here. To listen to the E-Commerce prediction discussion, please click here. To listen to the shopping influences discussion, please click here.…

We now have closure to a story we reported in April about a Texas man who smashed in a Wal-Mart self-checkout man when it froze. The punching consumer—46-year-old Joel Wallace Hansen of Euless, Texas—pleaded guilty this week to disorderly conduct and was fined $286 and ordered to pay $1,000 for restitution, according to a report in the Star-Telegram.

“Our office position was that we attempt to get some type of restitution and that the defendant be held accountable for his actions” Tarrant County Assistant District Attorney Al Lazarus told the daily newspaper. “We accomplished that.”…

PayPal expanded its global reach Thursday, adding ten new currencies: the Czech Koruna, Danish Krone, Hong Kong Dollar, Hungarian Forint, New Zealand Dollar, Norwegian Krone, Polish Zloty, Singapore Dollar, Swedish Krona, and Swiss Franc. PayPal had already supported U.S. Dollars, Australian Dollars, Euros, Pounds Sterling, Canadian Dollars, Japanese Yen and Chinese RMB.

PayPal also announced that residents in 48 new markets can now use PayPal in their local markets to send money online. These new markets include Indonesia, the Philippines, Croatia, Fiji, Vietnam and Jordan. PayPal currently has 114 million accounts globally. In the second quarter of 2006, PayPal’s total payment volume — or the total value of transactions — was $8.9 billion.…

A major tradegroup on Tuesday unveiled new E-Commerce product format guidelines, which might help consumers more accurately compare products. But first, retailers have to reverse their proprietary ways. The new standard data exchange formats were introduced by the Association for Retail Technical Standards (ARTS), which is a part of the National Retail Federation (NRF).

The intent of the new rules was clearly to help lighten the processing burdens of retailers as they submit product details to various product-comparison Web sites. But a possible unintended consequence of the move is that it might help those product-comparison sites more easily identify which products are identical. For years, product-comparison sites have complained that retailers deliberately make such comparisons difficult. Read more...

An upcoming retailer/supplier trainwreck collission over store localization, Amazon's abandonment of key features of its A9 search engine, whether a new giftcard service will change retail approaches and the privacy controversy surrounding Hitachi's new RFID tag. Those were the topics for this week's StorefrontBacktalk Week In Review audiocast.

This week's panel featured Forrester Research's Nikki Baird, the Retail Systems Alert Group's Steve Rowen and Ken Morris of The Lakewest Group, along with StorefrontBacktalk Editor Evan Schuman moderating.Read more...

In an interesting wireless payment approach, the 2006 Arizona State Fair will allow consumers to pay for rides with credit and debit cards at all ticket booths on the midway. Given the temporary nature of fairs and carnivals, it seems a natural for wireless payment potential.

“Taking credit cards for rides has always been a challenge because we move the ticket booths regularly to accommodate different fair layouts, so installing the cables required to carry the transactions over a wired connection for each event has been impractical as well as expensive. In addition, we have never been able to accept debit cards,” said Kristi Walsh, Marketing Director for the Arizona State Fair. The fair will be using Hypercom Optimum M2100 wireless payment terminals. …

As the established large E-Commerce sites pour millions of dollars into security and enterprise-league hardened POS systems, cyber crooks have been giving more attention to much smaller and less well-protected merchants.

Those smaller merchants can't even necessarily protect themselves by opting to not have a Web site, as the thieves are grabbing credit card information as its transmitted over the Internet to POS servers. "In general, the smaller retailers, whether they're operating E-Commerce sites or physical stores, don't have the resources to think about security," said Gartner Group retail security analyst Avivah Litan.Read more...

BestBuy was the retail maverick about two years ago, when it rolled out its customer loyalty program that charged customers $10. It worked to the tune of some 7 million takers, many of whom spent 130 percent more than typical BestBuy customers. Beyond the $70 million in additional direct revenue, those cardholders on average spent 130 percent more than typical BestBuy customers.

This week, though, BestBuy gave up the fight, opting to give up the $70 million in hopes of getting a far larger percentage of its customers to start using the card and being tracked.…

The marquee names of the participants in lockstep agreement couldn't have been more impressive: Wal-Mart, P&G, Kellogg's, Coca Cola, Miller Brewing, Disney, Walgreens and more. They were all coming together to support a method for tracking aisle traffic for the purpose of properly pricing promotion fees. But according to a panel of retail technology experts this week, they couldn't be more wrong.

The dramatic infrared sensor announcement will offer no true advantages over the old-fashioned mechanical counters and is a puzzling move, said Paula Rosenblum of the Retail Systems Alert Group.Read more...

The folks at Visa and PayByTouch just want everyone to know that they’re doing fine. Visa on Thursday issued a statement identifying a handful of retailers–7-Eleven., Clearview Cinemas, Dairy Queen, Domino’s Pizza, and Sonic Drive-In, to be precise–who have agreed to use the card’s No Signature Required Program, for transactions costing less than $25. That campaign is aimed at cash-intensive retailers.

The day before, it was PayByTouch’s turn to reassure people that it was still around by announcing its three-millionth consumer customer. That is a good indication that biometrics is gaining a little acceptance out there, but signing up to get whatever incentives are being offered is one thing. The frequency of use is another. …

A new price-comparison site went beta this week. On its own, that’s certainly not worthy of note as new such sites crop up fairly often. But this site—called www.pronto.com–is making two interesting claims. First, it’s billing itself as world’s most comprehensive comparison-shopping site, backing that up with a further claim of 45 million products from 50,000 retailers. But the second claim is that it will display results with no influence from ads or purchased placement.

Traditional comparison sites today only show products that retailers want to be shown, while Pronto claims to show all, just as the very initial meta-sites did, in the early days of the Web. “Many top retailers advertise less than one-third of their inventory on leading comparison shopping sites and consumers pay the price for this lack of comprehensiveness,” said Pronto CEO Dan Marriott. “Most people don’t want to shop in a store where two thirds of the retail space is empty so why would they do so on the Web?”…

A fascinating story in ComputerWeekly reports on British retail powerhouse Marks & Spencer and their efforts to increase the number of products being tracked at the item-level from 25 million to 49 million.

Staff in 42 stores use Bluetooth retail handheld devices to scan garments in a weekly stock check. Every tagged garment in a store can be read in 90 minutes.…

There must be something slightly surreal in creating a company whose products only function well when another company does its job poorly. Then again, if it makes a buck and helps its customers, what’s wrong with that? I mention this in light of a statement issued Monday by a Colorado company that helps EBay customers do better in the sea of EBay bureaucracy.

If EBay kept its systems clean and simple, then Colorado Springs-based Internet Business Skills wouldn’t have a chance. Therefore, they have a very bright future. The company bills itself as “the only company providing analytical intelligence to eBay sellers in order to reduce fees” and I think it’s a safe bet that their description is accurate. The product–Pyrolytics 2.0–analyzes inventory, keywords and price to help customers reduce listing and marketing fees.…

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...