Evan Schuman's StorefrontBacktalk

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.…

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...

The Guangshen Railway Company, which is part of the world’s largest public transport operator, has purchased 125 million RFID tickets in a deal it’s describing as one of the largest RFID purchases ever.

Guangshen’s parent operation, the Ministry of Railways of China, transports more than 3 billion people a year. The railway said in a statement that it hopes the contactless cards will help it reduce ticket fraud and “break the current price barriers for paper tickets.” The contract was awarded to Finland-based RFID vendor Confidex. The company said that Guangshen operates the strategically located railway between Guangzhou and Shenzhen, one of the most modern railways in China. When it starts delivering the tickets next month, Guangshed Railway will be the first in China to switch from the traditional barcode tickets to a contactless-only fare collection.…

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.…

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...

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. …

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?”…

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...

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?”…

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...

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...

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.…

Phones that can ring with coupons, beam payments and deliver true multimedia interactive experiences are already in the pockets of most consumers. How far will—and should--retailers go?

A free product coupon is a free product coupon, right? If it's for the same product at the same merchant and the pricing and timing are roughly the same, it shouldn't matter how that coupon is given to the merchant. Andrew Kamps, the VP of operations at a New York restaurant chain, recently learned otherwise.Read more...