Evan Schuman's StorefrontBacktalk

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...

Wincor Nixdorf on Monday announced a reseller deal with Hypercom, where Wincor will sell Hypercom’s multi-lane Optimum payment terminals to its U.S. customers.

A statement from both firms said they “anticipate expanding the offering to global markets and will cooperate closely on joint sales and marketing.”…

I hate to take a brief respite from this retail technology excitement, but when I saw this popular Web video–supposedly depicting Darth Vader’s younger brother as a retail manager–I had to share.…

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.…

A new study of retail kiosks found a very short lifespan, but it’s mostly due to new technology and a retailer’s desire to upgrade. But since that is a trend unlikely to change in the next few years, it’s something for a kiosk-purchasing retailer to remember when negotiating price and calculating both a Return On Investment and Total Cost of Ownership.

The average kiosk replacement time was 2.3 years, the lowest of the retail packages examined. including loss prevention equipment (3 years), CRM/Loyalty (2.7 years), Labor Scheduling (2.6 years), Inventory (3 years) and POS Backoffice (2.4 years), according to the IHL Consulting Group report. By an even greater margin, the kiosks examined were much younger, typically 1.8 years old compared with the other products, which ranged from POS at 5.5 years old to Loss Prevention, at 3.6 years old.…

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...

Here’s a discomforting statistic. Despite the sales pitches of payment processing companies telling retailers to avoid errors and costly credit card problems by outsourcing those efforts, new data finds that about 60 percent of data compromises are because of third-party processing errors and only about 40 percent are merchant mistakes.

The figures, released this week by Ambiron TrustWave, a Chicago-headquartered PCI security audit compliance firm. “POS developers, integrators and IT firms are not following PCI DSS and are leaving merchants at risk,” according to a slide Ambiron prepared for a conference. “The Majority of the compromises were caused by a fault in the service provided by a third-party to a merchant.”…

One problem that has come with E-Commerce’s love affair with multimedia is tracking royalties. Even assuming that all electronic storefronts are honestly and completely reporting music and video revenue, the huge array of different formats and specs make the process difficult at best for content creators. With multimedia sales now becoming a key part of the mobile experience, the data-incompatibility issues are likely to grow.

In this industry, though, wherever there’s a problem, there’s someone around trying to make money off of the problem and perhaps whittle the problem down in the process. A vendor called RoyaltyShare next week will launch a service for aggregating and monitoring digital sales data and will also announce deals with a few mid-sized independent record labels. The company is run by Bob Kohn, who had co-founded the eMusic music download site and had also been a vice chairman of Borland Software. Product details were scarce, other than it being Web-based and that it is tweaked to grab sales data sites including iTunes, Napster, eMusic and Rhapsody.…

As E-Commerce turns almost all retailers into global companies, it’s interesting to note that Visa and MasterCard have agreed to pay a total of $336 million to settle a class-action lawsuit alleging the credit card firms shortchanged American consumers in foreign currency transactions, according to an AFP story.

The story said the comanies had been accused of adding surcharges to credit and debit card transactions. As credit card transaction fees account for a growing percentage of retail costs, companies will need to rely on technology to accurately track exchange rates. The habit of some E-tailers to sit on and combine smaller transactions to save on credit card charges makes this even more challenging. Should the exchange rate apply to the instant the purchase was made or the moment it was submitted to the credit card processing agent?…

In what's been called the self-checkout diet plan, retailers are learning the unintended consequences of self-checkout systems, as they see sales of candy, Hollywood tabloids, batteries and other checkout lane impulse items plummet.

A very small part of the answer for this phenomena is that retailers are typically opting to not put such impulse items next to self-checkout systems, said Greg Buzek, president of the IHL retail consulting firm, which has just completed a self-checkout study. The core of the problem is simply the way consumers interact with self-checkout systems. Typically, they have to pay much more attention to choosing a lane and to watching their products and scanning them, thereby leaving almost no time for browsing magazines or otherwise being tempted. 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...

Visa on Friday changed its retail security requirement structure, which will—because of a change in definition of what a qualifying transaction is--have the impact of forcing more retailers to use its more stringent security procedures.

The core change is including all transactions when determining what level a retailer should be. Before, the criteria was limited to online purchases. "The most significant modification involves the Level 2 merchant category, which previously only applied to merchants processing between 150,000 and 6 million Visa e-commerce transactions per year," a Visa statement said. "Level 2 has now been broadened to include all acceptance channels and applies to any merchant processing 1 million to 6 million Visa transactions per year."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.…

Coupons are a time-honored retail tradition, but like secret Black Friday promotions and regional pricing, there is a good argument that they may no longer make sense. There are many Web sites today that are designed to empower consumers, often ostensibly against the interest of big business, whether those are major retailers, government agencies or large publishers.

Some of the more interesting ones help consumers get around mandatory free site registration—such as www.bugmenot.com--or get to a human voice when locked inside a voice-system hell (www.gethuman.com).Read more...

Just what retail IT execs need in the middle of a July heatwave: reminders that the holiday shopping season is waiting around the corner, like a heavily-armed drunk street gang. (Sorry. Heat waves in New Jersey have a way of souring a guy.)

What brings up this merry thought is a statement from Keynote Systems, the Web performance tracking people. Torturously reminding everyone that Black Friday is only 130 days away, Keynote said it was doubling the capacity of its main load testing service, LoadPro. They’ve added three new cities for testing: Seattle, Denver and Miami, for a total of ten locations across five Tier-1 backbones, as well as increasing network bandwidth capacity by almost 60 percent. What Keynote is doing is fine and necessary, but did they have to spoil a perfectly good summer and announce it now?

To listen to top industry analysts discuss the upcoming holiday season and what it will likely mean for multi-channel marketing efforts, please click here.…

Retailers with larger brick-and-mortar operations are going to be facing more demanding PCI security requirements this Fall because of a change in how Visa USA wants to group retailers, according to a report in Digital Transactions. Among the changes could be more internal audits.

The new tier definitions come as the card networks are making other changes to tighten data security. Visa is preparing to make a set of security recommendations for point-of-sale software, known as the Payment Application Best Practices rules, a requirement for merchants and software developers. To read the full story, please click here.…

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.…

With high-turnover being as much a part of an industrial kitchen as cracked pepper, the Chief Financial Officer (and acting CIO) of the Fuddrucker chain of restaurants often looks for ways to get control of his training budget.

CFO Matt Pannek thinks he may have found a tasty answer in a couple of hundred multimedia kiosks, which will be churning out their multimedia informational entrees in the chain's kitchens and bakeries. The IBM Anyplace kiosks cost Fuddruckers $3.5 million "just for the hardware," but it's complicated because the chain also purchased from IBM about 130 POS units and they also upgraded the monitors in addition to purchasing the roughly 175 kiosks, Pannek said. Still, the CFO for the privately-held Austin, TX-headquartered chain with annual revenue of between $300 million and $500 million said that he expects the project to "pay for itself within 18 months."Read more...

Despite the traditional mantra that item-level tagging makes sense when the price drops below 5-cents and preferably 1-cent, a major global consulting firm found the average price was 40 cents, compared with an average 18-cent price for pallet and case tags.

The IDTechEx analysis said that much of that can be explained because of the need for much more robust and larger memory tags for tracking parts and equipment that some of those early testers—such as aviation leaders Rolls Royce and Lockheed Martin–required. To read the full story, please click here.…

A beverage company is now selling RFID attachments for bottles, which analyzes the bottle's tilt angle and duration to calculate how much liquor is being poured and whether the bartender is sticking to the recipe.

On a busy Saturday night, a good bartender makes a lot of money for the bar's owner, but an overly generous bartender—or one fond of pouring free drinks for friends--can cost the bar's owner even more.Read more...

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.…

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.…

Considering the glacial pace that is the world of global standards bodies, it's not surprising that developers need to think far ahead. But as the politically-complicated RFID community has just started getting used to RFID's Gen2, some are already prepping for Gen3. That's making some in the industry feelings a little skittish--or perhaps nauseous.

"Some people are so committed to RFID Gen2" that talk of Gen3 "is like garlic to a vampire," said Kevin Ashton, a VP at ThingMagic and co-founder of MIT's Auto-ID Center. Read more...