Evan Schuman's StorefrontBacktalk

The 176-store grocery Meijer chain is testing RFID-based smartcarts in two stores near Detroit, trying to learn how it takes for customers to complete a shopping trip.

A Detroit News story reports that the retailer also wants to know if carts are in one of four locations: in the corral, in the shopping area, near checkout or in the parking lot. The chain, which operates in Michigan, Ohio, Indiana, Illinois and Kentucky, wants to see if the data will be reliable and will allow managers to juggle cashiers to keep lines to fewer than seven customers. Initial plans are to not track customers as they move throughout the store, but the AeroScout smartcarts are able to do that.

The paper said Meijer is also preparing to do in-store Wi_Fi Internet access and self-checkout lane trials.…

Staples’ Canadian operation, Staples Business Depot, has been experimenting with RFID and has seen some sharp efficiency improvements, but is finding getting a clean financial ROI difficult.

“At the end of the day, we know additional cost is going to be passed down to us” from suppliers, Joe Soares, Staples’ director of retail processes, said Thursday at the RFID Journal Live Canada conference, according to a report in IT Business. “To get (suppliers) on board, there is a substantial infrastructure investment” needed. “It’s iffy as to whether we can get ROI.”

Staples’ Canadian operation started its RFID pilot in August 2003, working with PriceWaterhouseCoopers and Bell Canada. But the story quoted Ashroft as saying there was a brief halt to the project because of personnel changes, which turned out to be a good thing because it delayed the project long enough to deploy Gen2 technology. The group had aimed for 99.9 percent accuracy in RFID read rates and ended up with 97.41 percent once the pilot concluded, the story said. “Read rates were drastically improved overall, however. Before the trial, it took 17.75 minutes to register items on a pallet; using RFID scanners, it took an average of 2.7 minutes.”…

A six-month trial with 500 participants—lead by 7-Eleven, Nokia and MasterCard—has been launched in Dallas. The NFC-enabled phones using MasterCard’s PayPass will process 7-Eleven customer transactions, but with less dependence on the card issuer.

The trial will use over-the-air NFC payment provisioning using Giesecke & Devrient’s new chip management approach. “Previous trials have relied on card issuers managing the provision of each handset before handing them over to each trial participant — a method that would be a barrier to the wide scale adoption of NFC payments,” said a recent ABI Research advisory.

The payment process itself—let alone the security and device issues—have made such trials challenging. “This trial tests a trusted third party model, placing G&D’s new offering in the middle ground between issuer and operator,” said ABI Research senior analyst Jonathan Collins. “Success could help provide a blueprint for other (mobile virtual network operators) and major wireless operators to start to test and deploy NFC themselves.”…

A recent report that raised serious scientific questions about how secure the new contactless credit cards are could ultimately depress online sales, as consumers might doubt overall credit card security protections.

Jupiter Research retail analyst Patti Freeman Evans told the rest of the panel that the problems with contactless security perceptions could impact a lot more than merely those contactless cards. It could easily impact E-Commerce sales as it plays off of the existing consumer fears that it's easy to get ripped off online because security is so lax. "This just feeds into all of the fears that people were having about this kind of technology and it undermines the credibility of the credit card security systems overall," Evans said, adding that fraud concerns are "the biggest inhibitor to people transacting online. This just fuels the fire of consumer fears that they already have."Read more...

When a group of university-based scientists decided to test the security of contactless credit cards, even they were unprepared for how remarkably non-secure they’d be. That was the backup for the highlight of this week’s StorefrontBacktalk Week In Review show, featuring panelists Patti Freeman Evans, from Jupiter Research, Paula Rosenblum, from the Retail Systems Alert Group, Greg Buzek from IHL, former federal prosecutor/security expert Mark Rasch and Jessica Bryan from Gomez, along with special guest Kevin Fu, Computer Science Professor at the University of Massachusetts and the chief author of the contactless payment report. StorefrontBacktalk Editor Evan Schuman moderated.

To hear what the panel thought and to listen to the arguments, please click here.…

With an eye on ever-increasingly small payment devices, a Los Angeles company Thursday introduced what it dubbed the world’s smallest card-based contactless payment fob, measuring in at 28.5 mm by 23.6 mm (1.125″ x 0.93″).

The company, Oberthur Card Systems, said that the sub-card–named VersaFOB–is snapped out of a full size card at the end of the production process and then inserted into a key-chain casing. MasterCard Worldwide has approved the mechanism as a PayPass product, Oberthur said.

The idea is that the device can be housed in whatever form a company would want, giving them flexibility in how the device would be used. “Until now, most contactless payment fobs have required custom equipment and unique processes to produce,” said Oberthur President Philippe Tartavull. “Regardless of the final shape of the VersaFOB, it is based on a regular-sized card body and can be personalized and mass produced using industry standard practices. This enables Oberthur Card Systems to manage production costs and lower the barriers to entry from a cost perspective.”…

Accusations that RFID-based contactless credit cards can be easily read by thieves are nothing new, but this time, a group of scientists at the Univ. of Mass. has gone quite far to try and prove it.

The group tested about 20 samples from various contactless credit cards and concluded that "the cardholder's name and often credit card number and expiration are leaked in plaintext to unauthenticated readers" and "our homemade device costing around $150 effectively clones one type of skimmed cards." Perhaps of greatest concern is the report's conclusion that "RFID-enabled credit cards are susceptible in various degrees to a range of other traditional RFID attacks such as skimming and relaying." To read the full story,

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...

"Can you hear me now, Mate? You can't? IBM must be testing RFID again." Alas, the Australian Tennis Open has little love for Big Blue and neither do Australian Vodafone users.

Seems that IBM was preparing a major demonstration, to show that RFID is now accurate, reliable and can function without causing interference. Unfortunately, IBM had to pull the plug on the demo because .... well .... it was causing too interference. To read the full story,

As retailers and consumer goods manufacturers struggle with achieving the supply-chain nirvana of complete item-level tagging, $60 billion aerospace giant Boeing has gotten item-level RFID to soar, with two thousand high-memory passive tags in every plane of an upcoming line.

Boeing's item-level RFID efforts are intriguing because of their scope, but also because of the extreme environmental and frequency hardships they must endure. Beyond the expected vibrations, altitude, air pressure and humidity impact of routinely flying that far above the clouds, the tags must be able to handle temperatures that range from 40 degrees (Fahrenheit) below zero and they were tested to 1,200 degrees above zero, which is what the exhaust nozzle right outside a jet engine experiences. The wireless unit must be nonflammable and be accessible to frequency ranges between 860 MHz and 960 MHz, so it can communicate with devices from any country that using UHF RFID readers. They also must last about 20 years.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...

Saw a note this morning listing winners for the Organic Semiconductor Industry Awards and, for some pyschotic reason, I felt the need to suggest that the Whole Foods chain would be an ideal sponsor for this event.

Maybe they could serve Alf alpha sprouts and organic tofu and maybe Ben & Jerry’s ice cream for dessert? We could get this whole no preservatives, no pesticides, no barcodes theme going. (Plextronics apparently won the start-up of the year award, for which I thank them because it gave me an excuse to run this silly item.)…

Hitachi on Monday announced what it is billing as the industry’s first WiFi active RFID tag for wireless LAN position detection and management of people entering and leaving buildings.

According to a report in the Japan Corporate News wire service, Hitachi’s new offering will also include an emergency message capability that reportedly “allows users to send a message to the control center, automatically informing disaster relief officials of their whereabouts.” The Air Location II Tag-w, which will be released on October 3 at 21,000 yen, will be displayed at CEATEC Japan 2006 from October 3-7.…

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 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.…

A New Zealand company is pushing a digital signage/RFID system that fills an aisle with smells to reinforce marketing messages. In the Regency duty free shop at Auckland International Airport, for example, digital images of vodka company Absolut’s raspberry vodka were reinforced by—yep—a strong raspberry smell. The system isolates the smells for specific customers and can spray as many as 2,000 different fragrances into different parts of the store at different times, according to a report in the Sunday Star-Times in New Zealand.

“What we’re getting into now is really something more than digital signage,” said OpenEye chief executive Gareth Croy. “It’s more the digital experience” with one-on-one electronic messaging. “You pick up a bottle of Johnnie Walker Green Label and put in your shopping basket. Suddenly, the digital sign near you tells you you can buy two bottles of Johnnie Walker on special for $100. Visual images then reinforce the message.” If a customer uses an infant-carrying pram, OpenEye has the security camera track the customer’s movements and co-ordinates digital signs and audible messages pushing the hottest items for babies. As for smells, options include vanilla for women, leather for men, chocolate for all and cut grass for gardening issues.…

Kimberly-Clark is reportedly taking its RFID testing into the United Kingdom with a series of trials with Tesco, according to a BrandRepublic story. The typical loading dock and conveyor setup builds on trials the Huggies-maker has already been doing with Wal-Mart, Target and Albertsons in the U.S..…

RFID tags are secure for only a handful of very specific situations, according to a new report from Forrester Research. “RFID is not mature enough yet to protect your company secrets,” the report said. “This technology will inevitably bring changes to business processes, but adopters need to anticipate the potential threats that can arise with new changes and know the limitations of their RFID systems.”

Forrester says that risks include the lack of ability to see modified data on a RFID tag, passive tags lacking confidentiality protection and an attacker’s ability to send their own signals and block others.…

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.…

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.…