Evan Schuman's StorefrontBacktalk

Using RFID to coordinate sales floor promotional displays with ad campaigns has yielded a 54 percent increase in sales at Germany’s $68 billion Metro Group. The sales increase figure was one of several pro-RFID numbers mentioned in an October 27 speech by Metro’s IT office chief, Gerd Wolfram, according to RFID Journal.

Wolfram reportedly said Metro, the world’s fifth largest retailer, found that using RFID-tagged pallets for inventory tracking brought a “significant reduction of shipping mistakes and resulting compensation claims,” in addition to a 15 percent cut in truck unload time and halving the time it takes to verify proper item delivery. Metro, using products from Checkpoint, is about to experiment with using item-level RFID tags as the sole method of theft deterrence in stores. …

But retailers pursuing such a strategy might quickly discover that, with payment, when one door closes another opens—and it's likely a trapdoor beneath your feet. For example, a secure route to bank accounts may indeed sidestep most—if not all—card fees for those mobile transactions. But it would also remove the liability shield that the brands' zero-liability programs offer.Read more...

Among the complaints: No guidance, the standards are designed for a bygone era of technology, the standards are anything but standardized, why should banks have to not comply with PCI?, compliance gamemanship and "We Don’t Need No Stinkin’ Credit Card Data."Read more...

In Friday's hearing, the government for the first time put a number next to the DSW breach, saying that the $1.5 billion apparel chain operating 300 stores in 37 states (in addition to supplying footwear to 367 leased locations) lost more than one million card numbers in the breach. The government also said that OfficeMax—the $8.3 billion office supplies chain with 939 stores in the United States and 83 in Mexico—played a crucial role, with Assistant Boston U.S. Attorney Stephen Heymann saying that OfficeMax's "then vulnerable encryption of PINs enabled Gonzalez (and a colleague) to sell the conspirators' bounty for particularly large profits." The only new data morsel about TJX to emerge was a Heymann estimate that TJX alone "suffered close to $200 million in losses and associated expenses."Read more...

But what does any of this have to do with M-Commerce? A lot. If they finally get around all of the technical and logistical hurdles of M-Commerce, they will be trying to get millions of consumers to interact with their sites—via their phones—and see product lists, read reviews, watch multimedia demonstrations, interact with social sites, download PDF instruction manuals and even ask their peers for feedback on their shopping choices before consummating those purchases. That's all great, but—if successful—will it turn the Home Depots, Walmarts and Targets of the world into examples of what may become known as "The AT&T Factor"?Read more...

In the trial—conducted over 13 weeks and published Monday (Aug. 24)—looked at a non-item-level store (the control store) and one item-level store and the same limited product area (denim jeans) were examined for both.Read more...

In the world of retail CRM programs, warehouse chains such as Costco, BJ’s and Wal-Mart’s Sam’s Club occupy a very specialized niche: they can boast that their customers use their loyalty cards just about 100 percent of the time, allowing for near-perfect purchase histories for all customers. Of course, requiring that the membership/loyalty card be displayed to get into the store and to make any purchases certainly doesn’t hurt. But it’s equally noteworthy how little those chains have pushed those extraordinary purchase history databases. Sam’s Club has now made such a move, claiming to be the first warehouse club chain to offer automatic paperless coupons. These chains have typically provided deeper-than-normal discounts, but they make it up with membership fees and, much more importantly, volume purchases.

That’s not merely buying huge quantities of products, but packaging the products to force consumers to buy larger quantities at any one time. If the consumer can use 100 bars of soap, they can enjoy that financial benefit. “There are no coupons to clip and no rebate forms to complete and mail,” said a Sam’s Club statement. “Members will receive customized offers tailored to them and discounts will be automatically taken at the register using their existing membership cards.”…

This begs the question: How does an IT department successfully deliver retail technology that meets the needs of both a franchisor and the chain? Both sides need to change the way they think about large-scale IT projects. StorefrontBacktalk's new Franchise IT Columnist Todd Michaud contends that this is a lesson that shouldn't be ignored by non-franchise chains, too, as today's reality of Web-enabled, mobile-fueled, social-network-infested high-turnover low-margin is forcing everyone to play by very different rules or to die not trying.Read more...

Linda Dillman, who was the retail IT universe’s most powerful executive for years as the Wal-Mart CIO, went relatively quiet in 2006 when she was removed as CIO and given the title of EVP for benefits and risk management at the world’s largest retail chain. Dillman resurfaced Wednesday (Aug. 5) when she left the $401 Billion Wal-Mart executive VP gig to take a Senior VP role with the $118.4 billion Hewlett-Packard.

The former Wal-Mart CIO will report into Randy Mott, the HP CIO. It’s unusual for a retail IT exec to join a vendor and not take a title promotion, especially when the vendor is smaller than the retailer. Then again, when you work at Wal-Mart, every company is a smaller company. And Palo Alto has a few advantages that Arkansas can’t match (but cost of living isn’t one of them). Besides, Mott himself had performed a similar dance, leaving Wal-Mart, where he had served as CIO, to join Dell and then HP. …

It would be nice to be able to remotely—and automatically—lock or unlock all doors throughout a retail chain at designated times, potentially leveraging RFID and wireless network access. Nice, that is, for bad guys who want easy access to your warehouse and other secure areas. At least that’s the premise of one researcher who cracked an electronic access system at the network control level and opened a door with a spoofed command sent over the network. As a nice touch, he also bypassed the audit log so the system wouldn’t see that someone opened the door.

What enabled it all was a system programmer who used predictable TCP sequence numbering, according to this nicely done story in Wired. “The problem occurs between the door controller and the server, which communicates with a persistent TCP session with ‘very, very predictable sequence numbering.’ Essentially, it increments by 40 for each new command,” the story said. “This means an attacker on the network can, while conducting a man-in-the-middle attack, intercept a ‘door unlock’ command and easily guess the next sequence number. Then, any time he wants to open a targeted door, he can sniff a packet to determine the current sequence number and send an ‘unlock’ command into the session with the next sequence number and the IP address of the administrator, fooling the system into thinking it’s a legitimate command. The command could remotely unlock one door or all the doors on an entire facility.”…

In another sign of movement in the contactless payment space, the 450-store Sports Authority chain has now agreed to accept contactless payment, which is on top of this month’s agreement from Home Depot that it would also accept contactless payment. But it’s also the same month when Best Buy said that they might stop accepting Visa contactless payment.

MasterCard has been offering key retailers generous checks to cover the cost of contactless deployment—and then some—to try and drive acceptance. Many retailers—Home Depot and Subway in particular–have agreed to accept contactless payment (and the bribery checks associated with it) but are unusually non-supportive of it. Even the convenience claim has been challenged by some chains that have agreed to deploy. Not clear how much benefit contactless will receive with a list of reluctant deployers, but that will become clear with the next (non-incentivized) layer of deploying retailers. The interchange fee issue—from Visa debit, which charges retailers more if a transaction is done contactlessly—is also damping down retail enthusiasm. As for consumer enthusiasm for contactless, that’s also been in very short supply.…

This technique of analyzing the light-reflection has a few potential advantages, such as bokodes are much more difficult to fabricate, meaning it will be much more difficult for thieves to use consumer-grade printers to make fake stickers or to print bogus codes on product containers. Also, it can trump RFID tags in a few ways, both for security and supply-chain efficiency.Read more...

"Our goal is to have it be completely comprehensive, for both online and offline," said Zoe Strickland, the Wal-Mart VP who serves as the chain's Chief Privacy Officer. "We need to govern all the different ways that we collect and use information. Privacy is not just about using the Web site. It's everything that happens when you're interacting with the company." The new policy opens the doors to consumers being able to examine their full customer files. Or does it? Read more...

Germany’s Metro Group, the world’s fifth-largest retailer with $96 billion in annual revenue and about 2,200 stores, has co-created a new kind of UHF-RFID tag that is reportedly delivering “nearly 100 percent read rates despite being attached to pallets loaded with goods containing metal and fluids.” Metro is using the new Avery Dennison AD-843 tag to track pallets sent from its warehouses to all of its food stores in Germany and to “at least 90 in France,” Gerd Wolfram, managing director of MGI Metro Group Information Technology, is quoted as saying to RFID Journal.

“As the pallets are loaded onto trucks, Sirit or Intermec RFID interrogators capture their tag ID numbers—reading them even in instances where a tag is obstructed by cases of goods—and send those ID numbers, along with a date and time stamp, to software running on Metro Group’s server,” the story said. “The software, designed and integrated by MGI Metro Group Information Technology, includes a database of pallet RFID tag ID numbers linked to the bar-code serial numbers of the products loaded on those pallets, enabling the software to interpret the RFID data and track when a pallet was shipped.”…

Ironically, the same contactless albatross is behind both moves: Visa's pricing policy that charges a lot more for contactless debit transactions, compared with MasterCard. Home Depot's move will quietly start happening in about a month, as it will start to distribute more than 20,000 contactless readers, more than enough to outfit lanes in all of its 2,238 stores.Read more...

The move is part of a plan to move the state stores from IBM software over to an Oracle package and the contract anticipates--and prohibits--the kiosk company from making money from combining the payment card data and blood-alcohol levels and selling. (A little blackmail potential? If it weren't for that prohibition, it has all the potential for a nice business plan.)Read more...

"Despite the world’s largest RFID project, the $6 billion China National ID card scheme, being completed a year earlier, the global RFID market is rising 5 percent this year to $5.56 billion, in the face of the global financial meltdown which has caused some car production, for example, to plummet by 50 percent," wrote IDTechEx CEO Raghu Das.Read more...

Every couple of weeks, it seems, another state makes news for attempting to regulate, tax or otherwise control retailers and retail technology. The toughest part, for merchants, is that states usually tackle the issues with little regard to being aligned with the efforts of their colleagues in other states or for the hardships their one-of-a-kind provisions impose on retailers. The laws just keep on coming. Nevada, for example, passed a data protection law last month that goes into effect Jan. 1, 2010. In addition to forcing businesses to use encryption when data storage devices containing personal information are moved outside the company's physical or logical control, the new law also mandates compliance with the Payment Card Industry Data Security Standard (“PCI DSS”) for businesses that accept payment cards.Read more...

The move has huge potential mostly because, from the consumer's perspective, it's so non-interruptive. Consumers are already in the habit of using self-service beverage machines at fast-food facilities, so it should encounter almost no resistance. All that will be visibly different is a much greater amount of beverage choice. As long as the machine's interface is clean, that shouldn't be a problem. But if the options look—even at a glance—overly complicated or time-consuming, things could turn ugly quickly.Read more...

Victoria's Secret's new mobile experiment is more of an adjunct to its catalogue (paper and online), with the mobile app needing a catalogue number before an item can be purchased and tracked.Read more...

But when those consumers return to that Dairy Queen with those tags stuck to their wallets, their watchbands or the back of their cellphones, identical those tags shall be no more. Given the differing purchase histories of each customer, the tags will deliver sharply different discounts and offers. In effect, the tags will serve as digital coupons as well as makeshift CRM/loyalty programs.Read more...

It’s well known that temperature-detecting active RFID tags have extreme value with perishable goods transportation, but a new study delves into microclimates, which indicates subtle differences of temperature in different parts of the same pallet. The Aim Global story looks at the IT ROI implications and whether it could change the business case for active tags.

“Each link in the cold chain must have the ability to reject partial shipments based on temperature data. This could make it either more expensive for the supplier (because some goods are now being rejected that had previously been accepted) or less expensive (because whole shipments are not rejected because of a single temperature reading). In either case, there would be a financial incentive to more closely monitor temperature and other critical conditions,” the story reported. “Customer refusals or charge-backs for less-than-fresh goods might provide an incentive for processors to pressure growers/packers to tag individual cases so that improper handling at the beginning of the supply chain does not adversely affect a processor’s or distributor’s downstream revenues.”…

A Microsoft engineer is being quoted as questioning the safety of RFID tags and whether the tags could be wirelessly attacked. “Technically speaking, if a virus broadcasts itself utilizing a wireless data transfer protocol and another system accepts this transmission and transfers control to the received data, then we may have a case of an ‘airborne’ infection,” said Oleg Petrovsky, senior software development engineer at Microsoft, according to a report in Secure Computing. (Microsoft promised to comment, but didn’t respond by deadline.)

“The most plausible case scenario might include a virus that utilizes a vulnerability in the driver of a wireless device or a service using either TCP/IP or Bluetooth protocols. However, despite the growing numbers of wireless devices, including smartphones, PDAs and 2G, 2.5G, 3G and GPRM network services, so far we’ve been fortunate to not have outbreaks of this nature.”…

NEC is preparing to sell its next-generation of tag readers/writers at a price more than 90 percent lower than current pricing, according to a report in Japanese business publication The Nikkei.

“The tags are compatible with all of the six worldwide radio communications standards. NEC is ready to accept orders beginning as early as this July,” the story reported, adding that some “10,000 of the new tags will be available for approximately (the equivalent of) $100.”…

The scenario of consumers using their smartphones to barcode scan for everything from price lookups to quickly gathering more product information via the Web is nothing new. But despite all the talk, it hasn’t progressed much beyond being in a lot of hypothetical scenarios.

Is Google’s entry into the space likely to change that? U.S. and U.K. owners of mobile devices running the Google Android operating system can now download from Google a “Barcode Scanner” app that allows them to use their phones to scan UPC/ISBN codes with the phone’s digital camera. The application has been integrated into Google Product Search for Mobile. …