Evan Schuman's StorefrontBacktalk

As is our tradition, StorefrontBacktalk shuts down for the last two weeks in December, due to the fact that y’all are far too busy (a) supporting the biggest selling weeks of the year until December 25th, (b) supporting the biggest returns-and-exchanges week of the year after December 25th and (c) closing the quarterly books until December 31st on what everyone hopes will be a bigger year than 2010.

That means our next regular weekly issue will arrive on January 5th, 2012. In the meantime, everything else will still be live (the Web sites, our Kindle version, our Twitter tweets, our mobile sites, etc.). And we’ll, as always, send out breaking news alerts if circumstances merit. …

A message from our beloved business side: As the NRF Big Show happens next month, StorefrontBacktalk has a couple of last-minute slots for anyone wanting to communicate with NRF attendees. In mid-January, as our readers leave their postmortem holiday shopping meetings with the list of everything that went wrong, every feature management wants to add and a wishlist of products to make it all, it’s a nice time message.

We will also be adding several content channels next year—including several new weekly podcast series, more monthlies, events in addition to our usual weekly and monthly newsletters, and Web sites—and if your marketing people have any interest in getting involved, we now have new opportunities. Some of these new channels were specifically created to enable smaller vendors, with much more limited resources, into our community. If your marketers want to get your brand in the middle of these discussions, please drop us a note.…

The Home Depot partner app quickly responded: At the Lowe's store three blocks away. It's becoming clear that retailers need to be thinking about—and asking—a lot more questions about in-store maps and mobile navigation.Read more...

A funny thing happened, though: "Everybody has always said that if we could do the datacenter over again, we'd make no mistakes and everything would be perfect. It would be this incredible Utopian datacenter, except that we're all making the same mistakes that we made in the datacenter originally, because you go to the cloud like the Wild West," said Thomas Kelly, Best Buy's enterprise architect for cloud services.Read more...

Quick background: JDA was not involved in this matter when the sale was made in 2000 and is only now involved because JDA bought i2 in January 2010. In June 2010, the case went to trial and a Texas jury awarded Dillard's $237 million. That's an impressive amount given that Dillard's had only paid $2.4 million for the software. JDA/i2 appealed and Wednesday's settlement happened while the appeal was still processing. Dillard's position has been that JDA lied to them during the sales process and that the $6.1 billion chain didn't receive the value the vendor had promised.Read more...

It never really made much sense that Wal-Mart would go all the way to Australia for a mobile-receipts startup—that's hardly a new idea. But a box that plugs into a POS, so it's easy to experiment on a store-by-store basis with everything from mobile receipts and coupons to plug-and-play CRM, inventory and analytics systems, sounds like it's worth the trip. And that could explain why Wal-Mart worked so hard to make most details about Grabble disappear.Read more...

Given the dominance of the key U.S. holiday next week (we mean Thanksgiving, not Black Friday), StorefrontBacktalk‘s weekly newsletter won’t publish on November 24. Everything else will still be live (the Web sites, our Kindle version, our Twitter tweets, our mobile sites, etc.), but we need a little time off to burn some turkey and over-season some stuffing.

Speaking of which, we want to tap into the knowledge of our audience with a question that has nothing to do with retail technology. One of us here at StorefrontBacktalk is going to try something new for Thanksgiving: Cooking the turkey on a gas grill. The problem is that, well, it’s me. And my Weber grill seems to have two temperature settings: 750 degrees Fahrenheit and OFF. To be precise, it has tons of settings, but those two numbers seem to be the only heat levels the beast is capable of delivering and maintaining. In a short duration grilling (say 5 to 8 minutes), it’s easy to compensate. But when dinner for a dozen people needs to cook for five hours, I’m open to any tricks to get the temperature to get down to 325 degrees and to stay there. Any suggestions? If you do have any suggestions, please E-mail me at Help Evan To Not Turn His Entree Into Sawdust Held Together By Static Electricity.…

Huber adds: "Chip-and-PIN doesn't eliminate your requirement to be PCI compliant. You still have to do that. If we adopt Europe's old technology, the card data will still pass in the clear. You still need to spend all of that money securing your point-of-sales, auditing your network and reporting on your compliance status. Well, maybe not reporting to Visa—if you meet its requirements—but there's still MasterCard, American Express and Discover."Read more...

With so many chains offering pharmacy services, the debates provide a glimpse into how mobile strategies can slam into privacy rules and, sometimes, technology simply can't get around that. Tim Bell is the director for pharmacy managed care and systems at the 460-store chain operating in Florida, Alabama, Louisiana, Georgia and Mississippi. Bell said the issue is that the best approach for sending a quick alert (such as "Your Prescription for Lipitor is due for renewing. Should we renew?") and accepting ("Renew") is the least secure: text messaging.Read more...

The virtual store is not new. In a much publicized trial this summer, Tesco re-created almost all of the merchandise from one of its stores as a series of high-res photographs with QR codes on the walls of a South Korean subway. But the Debenhams' effort takes it farther than any other retailer. At least consumers arriving at that subway would see pictures of products and could guess what to do. In the Debenhams' trial, consumers were directed to very prominent street corners in London (Trafalgar Square), Manchester (Albert Square), Birmingham (Centenary Square), Cardiff (Cardiff Castle) and Glasgow (George Square). They then loaded a mobile app onto their phones. If the geolocation of the phones matched what the app had been programmed to look for, it would display a ghostly image of a dress.Read more...

Google is finally beginning to tighten the screws on users of its Google Maps. Well, sort of. On October 26, the search giant said that, starting Jan. 1, 2012, it will begin charging $4 per 1,000 views through its Maps API—but only for Web sites that exceed 25,000 map-views in a single day. Because Google is only counting the initial map access in that 25,000, it should be pretty easy for retailers to calculate whether this change will cost them anything at all.

For many retailers using Google Maps just on “find a store” pages, that pricing pretty much wipes out any incentive to jump ship to Microsoft’s or Yahoo’s map offerings—changing and testing the code would probably cost more than paying the overage fee on a few busy days. (If you’re a heavier user, because you have Google Maps in logistics or other geotracking applications, you may want to consider your options.) The actual pain may be trivial this time around, but it’s still a reminder that free Internet services probably won’t stay free forever—even from Google, which really wants retailers to be its new best friends.…

"At the scan, we get a certain amount of metadata as a result of the scan itself—operating system, carrier, cell tower being used, etc. We get all of that," said Scanbuy CEO Mike Wehrs. "We know what that app has scanned in the past." Indeed, Wehrs argues, the app can secure data from the QR code plus the phone plus online data accessed from a retailer's loyalty card database. "If the app integrates with their CRM files, it can give a completely customized experience."Read more...

That crucial point, buried in Yegge's 4,800-word rant: Google (just like most retail chains) has built a company on top of a collection of applications. Amazon (where Yegge worked for six years) has built its enormous E-Commerce success because it is not just a bundle of retail applications. It's a platform that lets customers interact, outside retailers sell and other third parties connect. But Amazon didn't start that way. And how it made the transition should have retail chains thinking hard about whether that's the right approach for them, too.Read more...

Shoplifters and employees who steal are classic in-store loss-prevention problems, but fully one-fifth of shrink is due to administrative errors and supplier fraud—things that LP isn’t designed for but that conventional IT should be a lot better at dealing with. According to the annual “Global Retail Theft Barometer” report out this week from the Centre for Retail Research in the U.K., about 20 percent of shrink worldwide is due to administrative errors (including “pricing mistakes, accounting errors and process failures,” the report says) and fraud or errors by suppliers.

That’s a huge chunk of loss that should be fixable with nothing but better automation. The other 80 percent is predictably split between external and internal theft, though that split varies widely: In the U.S. it’s 36 percent shoplifters and 44 percent employees, while worldwide that’s flipped: 43 percent shoplifting and 35 percent internal theft. But using IT to cut administrative-error shrink has at least one big advantage over Loss Prevention: Those errors aren’t working hard to hide themselves. And if you can use better systems to cut admin-error shrink in half, that’s roughly as good as catching a quarter of your shoplifters.…

The vendor behind the trial, a U.K. firm called Path Intelligence, pledged that "no mobile phone usernames or numbers could be accessed" and that "all we do is log the movement of a phone around an area and aggregate this to provide trend data for businesses." But what if that phone-tracking data is linked with security cameras and/or POS systems? What if a mall representative called one of its retail residents and said, "We're now tracking a woman who has spent $980 in the last hour and she has just walked into your store. For a $300 fee, I'll tell you exactly where she's standing right now. Deal?"Read more...

The guidelines, which are generally filled with commonsense security restrictions, offer nothing about timing, schedules or when retailers can—or should—include the new requirements in RFPs. The closest the guidelines get to referencing existing hardware is a brief comment that such components can be reused in newly approved systems. It does, however, detail fees.Read more...

For example: Where should the QR codes be placed? Should it be near the bottom of the screen? Well, what if the consumer time-shifts with a DVR or Tivo? A part of the code could be overridden by screen buttons. Place it in a glossy magazine? Good choice, but you have to steer clear of the page side toward any glued (perfect-bound) gutter or else consumers won't be able to get a full scan of the image.Read more...

But the limited four-day experiment also demonstrated the many QR drawbacks that retailers have to struggle with. A reporter for Forbes, for example, tried making a purchase during the event through a QR code and found that her couch was 10 feet away from the screen but that she had to get up to scan the code from five feet away. People who successfully navigated the QR code got to an ordinary Web site page. No discount, no special reward. And how long would the code be displayed? Then there's the learning curve.Read more...

To put this into context, PCI has unquestionably improved retail security in the U.S. and few have suggested a concrete alternative approach that wouldn't bring with it even worse problems. Like the criminal courts, a system can be very far from perfection and still be the best of all alternatives. It's also true that when security choices are made, some vendors are not going to be happy with the new rules. Even with all of that said, the directness and intensity of the speech by Magtek CEO Mimi Hart is worthy of note.Read more...

The good news: The security hole can be closed by upgrading E-Commerce sites to a version of the security protocol that has been available since 2006. The bad news: Most E-Commerce Web sites and most Web browsers are still using the version with the security hole. The security-guru consensus: The sky isn't falling yet, and browser makers may be able to implement a tweak that blocks the threat without a new security protocol.Read more...

The "now it's out-of-stock, now it's back in stock" problem isn't new to either in-store or E-Commerce, and it's one that retailers usually try to handle as quietly as possible with ever-smarter inventory systems. But that will probably never work, because real-time inventory stops working very well when an item is about to go out of stock. Unfortunately, giving online customers more information about a looming out-of-stock situation could actually encourage them to buy less—and may not keep them any happier.Read more...

Domino's enjoyed a piping hot multi-hour site outage that day, shortly after it launched a Facebook promotion—which was also shut down—to give away 100,000 pizzas in a new gourmet-style pizza line dubbed Artisan Pizza. The chain isn't saying exactly what happened to cause its outage, but it is saying that customers—presumably ultra-intent on winning the free pizzas—did something unfair. Ostensibly, it was some sort of denial-of-service variation where they would flood the servers with responses, thereby getting lots of entries in and denying others the ability to do the same. Domino's is declining to say precisely what it thinks was done. But the chain still apologized for it on Facebook on Wednesday (Sept. 21).Read more...

That compounded the problems of "Missoni Tuesday," which a Target spokesman said saw "greater item demand than we do on a typical Black Friday." But the crush of customers, and the fact that so many items sold out, masked a serious issue: Even though Target.com made buckets of money that day, the result left a bad taste in the mouths of many Target customers—and the site's nonconformist challenges are still there.Read more...

This is a very clever project, but I have to wonder whether it has any practical value. There is something ultra-sensitive about a bathroom mirror. Yeah, there's that naked thing and the video-streaming thing that may not play well together. When I think of all of the potentially creepy implementations of RFID, mobile geolocations and facial recognition, I think an interactive video-capable mirror using Microsoft Kinect has got to rank right up there.Read more...

Why such delays? First, the Council wants retailers to contract only for P2PE applications that appear on a Council list of applications validated to be PCI compliant. The problem? That list doesn't yet exist, and the list's creation is "targeted for Spring 2012," according to a draft copy of the Council's document. A second reason for the delay is PCI training of assessors. The Council isn't promising to identify the testing procedures until "the end of 2011" and "training opportunities" (which we assume means classes) won't be detailed until "Spring 2012." The report will say that the guidelines—even if perfectly followed—won't offer a path for a retailer to be considered out-of-scope. The best that a chain can hope for, according to the document, will be "reduced scope." But nowhere does the document say what exactly that would and wouldn't include.Read more...