Evan Schuman's StorefrontBacktalk

We did some Kosmix searching and didn't conclude we were in the presence of social media gods. We searched for "refrigerators," which is a fairly well-understood term. Indeed, Kosmix quickly offered that "A refrigerator is a large box-like appliance, usually ranging from 200 to 400 pounds in weight, used to cool and store fresh foods and beverages." So far, so good. But then it listed a wide range of tweets that used the word "refrigerator" but clearly were not referencing the cooling device.Read more...

Actually, Sony's response to the breach was half right. As soon as it learned it had been attacked, Sony took down the game network, so thieves couldn't use stolen passwords and the company's forensics people could search for evidence uninterrupted. What Sony got wrong was waiting a week before announcing the breach and issuing the payment-card warning. In fact, Sony could have given its customers a heads-up almost immediately—and without making a public announcement.Read more...

Retailers can deal with social media in three ways. The first choice is that they can create their own area where they try and attract shoppers and say tons of great stuff about themselves. Let's call that the Commercial approach. Second, they can get lots of people to visit big, established social sites (Twitter, Facebook, YouTube, etc.), where they can casually say lots of nice stuff about the retailer. This would be the Viral approach. The third way is to shut-up and studiously watch what everyone is saying, from every corner of social media. That's the Winning approach—and it's what Wal-Mart seems to be doing with its acquisition—because the first chain that masters hearing what those folk are all saying will have the keys to the most profitable merchandising and marketing decisions ever.Read more...

Gonzalez doesn't allege that any government employee ever asked—or authorized—him to do any of the break-ins for which he pled guilty. His position is more generic, that he needed to do these types of break-ins to maintain his skills so he would be of continued use to the government. In other words, he broke into those retail networks because he's a patriot.Read more...

Contractual obligations would have almost certainly prohibited Epsilon from trying such an effort, unless you think that Best Buy would have had no objection to letting Amazon and Target know which customers they share. But the thieves, however, have no such obligation—not that they would likely care about legal niceties such as contracts and criminal laws. Read more...

StorefrontBacktalk will launch its Premium Edition on April 18, just four days from now, on Monday. The reason we’re mentioning this again is to remind everyone that we are offering special 50 percent off pre-launch pricing. In other words, the exact same Premium service on April 18 will cost half as much on April 17. If you want to still have full access to all of our top stories (and all of the other goodies that come with the Premium subscription), doing it now is the cost-effective move.

Our site license options are also half-off during the pre-launch period (which has barely four days left). Our fear is that many readers will not focus on this until April 18, when they start running into firewalls when they try to read key stories and columns. And when they then subscribe, they won’t be able to take advantage of the pre-launch deals. The pre-launch deals were created specifically to give our long-time readers a break, so we want to make sure we do everything we can to remind everyone before it’s too late. To take advantage of our pre-launch deal, please click here.…

Retailers looking to tie into the vast social network community are certainly connecting with Facebook, Twitter and YouTube in every way possible. Facebook’s popularity is well known, but the most recent numbers from a Harvard University poll put some of the social utility’s numbers into a ludicrous area. For example, the survey found Facebook accounts belonging to literally 90 percent of four-year college students and 80 percent of all 18- to 29-year-olds. That compares with 31 percent and 24 percent, respectively, for Twitter accounts.

Think about it. The idea that 90 percent of any group—especially one as diverse as college students—would sign up for one company’s online service is pretty staggering. We’re not sure whether that’s more impressive than 80 percent of the absurdly diverse 18- to 29-year-olds, but both are staggering. And we haven’t seen any service cornering the market in a lot of years. For good or bad, it’s a little refreshing. …

If the accusations are true, then the network engineer certainly engaged in decidedly naughty behavior. But in terms of engaging in proper security procedures—especially if there was any payment-card data lurking in those servers—there's plenty of black coal to go around. Gucci's IT staff was "tricked" into activating a VPN token for a non-existent employee? That must have been some trick. How difficult is it to look up an employee and verify with a known manager that he/she needs that access and, by the way, actually exists?Read more...

The CIO at apparel chain Ann Taylor—Mike Sajor, who was recently promoted from serving as the chain's CTO—argued that the very nature of mobile devices will force a lot of good things. But as much as it will help retailers, it will also force their hands.Read more...

Retailers have always longed for consumers’ phone numbers, but consumers know that a phone number is very hard to take back once given. Unless customers change their number, they’re giving merchants access for a very long time. With mobile growth today and the ability to also text, never has the divide been more pronounced: retailers want to collect this info more and consumers are resisting giving it out more.

A startup called KipCall might—just might—have a possible way around this impasse, where it uses a Facebook API to hide consumers’ numbers and gives them a way of shutting out retailers the instant they feel like it. When consumers want to be left alone by a chain, they simply “unfriend” that merchant and the retailer has no way to reestablish contact. If this approach works—and it’s a fairly big if—it might greatly help retailers get phone contact information, because consumers would have less reason to fear handing over their number. There’s one catch: If the consumer opts to purchase anything from that retailer directly from a mobile device, there’s a good chance the customer’s actual phone number will be seen, thereby undercutting the whole exercise. Still, it’s a creative way to deal with this impasse.…

"A big thing to think about is how you are going to train your in-store personnel and educate them on the mobile strategy and the mobile app. We found many customers walking into restaurants, asking our personnel how to use the iPhone app. That can get lost in the mix," Concors said. "How are you going to redirect those consumers to the right level of support when those things come about? There's no way you are going to train all your personnel how to troubleshoot an iPhone app. In 99.99 percent of cases, there's no problem with the app itself. It's because the person doesn't understand or there's a problem with their phone or there's a problem with the network. If there's a problem with the app, we will see it across the board."Read more...

On Tuesday (March 22), payment processor First Data rolled out a mobile service that nicely illustrates the problem. A program dubbed mVoucher (for mobile vouchers) is a service to support gift cards, prepaid value cards and coupons for mobile users. Why couldn't most large retailers do it themselves, given that the functionality here is not overly complex? The answer is that they can. So why might they not? Simply put: the POS fear, when mobile is involved. It's an interesting twist on the age-old FUD (Fear Uncertainty and Doubt) selling tactic. But in this case, the vendor isn't spreading FUD about its products. It's relying on retailers already having FUD about connecting mobile with POS, creating an opportunity for an outsourced service that might not have otherwise existed.Read more...

Disruption just isn’t what it used to be. On Monday (March 21) consulting giant Deloitte issued a report on what it calls 10 “disruptive and emerging technologies” that will be a big deal to big companies over the next 18 months. The list includes cloud computing, software as a service (SaaS), visualization, analytics, social computing, mobile applications, ERP—wait, these are disruptive and emerging? Some of them emerged and did their disrupting decades ago. At this point, they’re about as disruptive as a cash register or a credit card.

It’s always hard for consultants to strike a balance, looking for the sweet spot in technology and trends that all their potential customers haven’t already adopted but are far enough past bleeding-edge status that they’re not a wild-eyed gamble. This time, Deloitte missed that sweet spot by about five years—this list isn’t even interesting. But we’ll be watching closely for next year’s report to see if that newfangled E-mail thing makes Deloitte’s list.…

Retailers looking to leverage social media are quickly learning that it’s a powerful tool—and it’s sometimes far too powerful. That’s a lesson Groupon learned in January, when it tried launching a new service in Japan. For those who need another reminder, a 16-year-old girl in Australia is only too happy to oblige. Seems that the girl posted an invite to her 16th birthday party on Facebook (with her address) and didn’t properly set the privacy settings.

It went viral, and almost 200,000 people said they would show up at her house. The party was canceled (which is a shame, given that the family apparently didn’t calculate the potential eBay revenue from selling all of those gifts), but it’s a critical reminder for retail. If a promotion goes viral, what seemed like a great idea can quickly morph into a disaster. Think Sorcerer’s Apprentice: social media is the magic spell and your impressively unhappy customers are the water. And those angry customers—facing hand-scribbled out of stock signs, huge lines and terrible customer service— will likely not forget. They won’t be bringing gifts, either.…

VeriFone did this all to attack a much smaller rival called Square, which it repeatedly identified by name. The ironies continue. VeriFone posted a special page for this content, including a domain name referencing its rival, Square: http://www.sq-skim.com/. A key part of that page was a YouTube icon that would play the video. But YouTube quickly took down the video, breaking the link.Read more...

The move itself certainly made sense. The retailer tried moving non-customer traffic—such as search engine bots and agents trying to track a variety of Web performance elements—to some slightly slower servers, with the intent of making the experience much faster for paying customers. And if a bot for Bing, Yahoo or Google get its data a little bit more slowly, no harm done. That was the theory. But slowing down performance for a Google spider, for instance, will in turn cause Google to assume your site is slower and that could impact a retailer's ranking on the search giant. It also caused some companies that track—and report publicly—Web performance to see the retailer's Web presence as slow or, in this case, down completely.Read more...

So how closely can a consumer's location be determined? In the AT&T effort, the telco is not using GPS and is limiting itself to cell tower triangulation. Depending on the area, that can range from 200 meters to as much as a three-mile radius. The nature of the alerts are such that they really shouldn't be used when someone is driving or in any other form of transportation (although it would be fun to try in the subway, watching as hundreds of ads appear and disappear).Read more...

That spells trouble for many large retail chains that have been asking California customers for their Zip codes for years. But ironically, this problem may already be history. Today, every time a customer does an online or mobile transaction, a retailer automatically gets detailed information on who the customer is. With loyalty programs and other CRM initiatives, customers voluntarily offer up detailed information on who they are. As a practical matter, retail chains were going to stop doing this soon anyway; the clock just ran out on it a little early.Read more...

The majority—if not the vast majority— of recent StorefrontBacktalk stories will still be available to read for free. So will our highly moderated discussion forums, which won't waste your time with spam and vendor pitches. But readers who aren't Premium subscribers will only be able to see the very beginning of Premium stories and columns—and they won't have any access at all to the Premium forums, private discussion groups, monthly reports or the archives of StorefrontBacktalk stories that are more than 30 days old.Read more...

The Council is in a very difficult position (between a ROC and a hard token place?), especially because it must give as much attention to political issues as it does to technological ones. In this case, the politics are not of the Washington, D.C., sort, but of the industry. Specifically, how to deal with the concerns of the many mobile application developers whose apps now cannot even be considered for PCI validation, especially when they complain of their rivals, who happened to have slipped in but PCI closed the evaluation door. Should the few already approved applications be delisted, so that all mobile applications can be evaluated at the same time, using the exact same criteria? Is that the fair approach?Read more...

It's called Beyond The Story because our discussion forums thus far have been limited to comments on individual stories. And we policed those comments strictly, making sure that they were indeed about the story they were attached to and that they were non-promotional, non-offensive and respectful. (Well, as respectful as IT professionals debating RFID, PCI, CRM and Mobile are likely to get. We don't seek miracles here.)Read more...

Amazon, as is its tendency, reported another record-breaking quarter. This time, it was a 36 percent revenue boost, to almost $13 billion in the quarter. Operating cash flow increased and—most critically—net income increased 8 percent, to $416 million for the quarter. For the full year, net income increased a stunning 28 percent (to $1.15 billion). It's beating just about every competitor in its segment (for the record, what retailer is not in Amazon's segment?). So what's the problem? What made Amazon's shares plunge some 7.2 percent in New York trading? It's really about Wall Street's difficulty in understanding IT investments.Read more...

For years, Macy's has had an in-store policy of free shipping for anything costing more than $50 (with the standard list of exceptions). On January 25, the chain announced with much flourish that it will now offer free shipping (with a somewhat lengthier list of exceptions, some impressively vague) for online customers if they spend more than $100. No acknowledgment that Macy's has decided online customers must pony up twice as much money before they merit the free shipping offered to in-store customers.Read more...

Groupon just launched a New Year's holiday food program in Japan. The launch went so poorly—and by that we mean that it sold so really well—that Mason had to lose face with a positively painful YouTube video for customers. He opened with an admission that "we featured a deal in Tokyo recently that we really messed up," because its supplier couldn't handle the volume of orders.Read more...

Burger King hoped to get quick legal leverage by canceling its franchise agreement with Al Cabrera, one of several franchisees who Burger King sued last year over the tardy IT upgrades. But Burger King's franchise agreement wasn't really written with IT in mind. The contract requirements for replacing obsolete equipment were written for broilers and refrigerators, not POS units. That leaves open the question of whether Cabrera's old POS units even qualify as "obsolete" under the franchise agreement—and whether Burger King can shut down the franchisee.Read more...