Evan Schuman's StorefrontBacktalk

To use a chess analogy, many e-tailers today see the strength of their multimedia entertainment offerings as akin to controlling the center of the board. On top of recent moves by Sears, Blockbuster and Netflix, Napster on Tuesday (May 20) announced what it dubbed the world’s largest music download site, with some 6 million selections.

Napster’s all-MP3 launch reflects an interesting E-Commerce trend. Although pure entertainment plays like Napster, Netflix and Blockbuster will likely be content with the healthy profits of downloadable multimedia (Blockbuster will likely be thrilled with any profit, but that’s another story), it’s the Sears and Amazons of the world that see entertainment as a way to lure in younger consumers, to set up much more expensive purchases down the road. But unlike similar historic strategies, the entertainment downloads are anything but loss-leaders.…

The RFID market has a healthy future, looking at a 15 percent compound annual growth rate over the next five years, hitting $9.7 billion by 2013, according to a report issued Tuesday (May 20) by ABI Research.

These figures highlight an RFID market that is growing “robustly,” said ABI research director Michael Liard, pointing to recent commitments from Wal-Mart’s Sam’s Club and the German retail giant Metro AG as key factors. …

Sears is in a fascinating online position. On the one hand, the $50 billion 3,800-store-chain says its online numbers are soaring, with the number of unique visitors in February 2008 reportedly rising 20 percent in that month. But Sears.com has also run into quite a few speedbumps. Read more...

A tech blogger noticed something strange when trying to purchase a Linux laptop on BestBuy.com. The system’s automatic recommendations for that Linux-based laptop included Windows versions of Microsoft Office and Norton Antivirus.

Rich Menga, who reported the item for a PCMech.com story, commented better than I could: “Hey, Best Buy. It’s a distinct possibility that Microsoft Office Home and Student 2007 for Windows and Norton AntiVirus 2008 for Windows won’t run correctly on an EeePC with Linux. Just a hunch.”…

Some British convenience stores are trialing a facial biometric program to try and improve the accuracy of guessing the age of customers for age-restricted alcohol purchases. The systems “capture facial measurements that will be checked against a database of profiles of known offenders,” according to this story in ComputerWeekly.

The story quotes an exec with a POS firm involved as saying that the capabilities are relatively recent. “Until now, combining the many technologies has been virtually impossible, but we have jointly come up with a way of automatically reviewing moving clips that are constantly changing,” said Charlie Willetts, managing director of Charton, “and they are now able to use this as part of a bespoke facial recognition system.”…

Tesco’s experiment with an all-self-checkout store in the U.S. is delivering surprisingly favorable customer satisfaction stats. Internal Tesco customer surveys for its Fresh & Easy stores are finding some 90 percent of its customers saying they were either “satisfied or very satisfied” with the checkout experience while another 27 percent say that “it doesn’t matter” what format the checkouts take, according to this story in The Retail Bulletin. The story said Tesco’s survey showed that only 13 percent of respondents prefer a conventional staffed checkout.

“Helping the Fresh & Easy situation is the fact that bananas are the only product available loose (because they are too variable in size and react badly to shrink-wrapping) whereas everything else is packaged and barcoded, thereby reducing the potential for problems at checkout and for the intervention of staff,” the story said. “This reduction in the need for staff assistance has been achieved through the ongoing development of self-service technology with (Tesco) citing the introduction of more advanced barcode look-up tables that are indexed on the most popular products sold in each store and improved standard deviation on the weight measured versus the weight expected of items.”…

Controversial RFID vendor Verichip on May 15 announced that it is selling much of the company, wants to sell the rest of it and that the company has parted ways with its CEO, Scott Silverman.

Verichip and its onetime parent company, Applied Digital, generated a lot of negative publicity for RFID with its efforts to push implantable RFID chips, including some especially controversial statements that Silverman made about RFID chips being implanted in non-citizen guest workers. The company’s sale of its XMark unit to The Stanley Works for $45 million will remove the vast majority of the company’s revenue. (RFID Update just ran an excellent look at whether such implantable RFID efforts are viable anymore.) …

Robert Russo, general manager of the PCI Council and a man who never met an acronym he didn't like (when we chatted, he tried turning QA into a verb—and he frighteningly got darn close), is trying to play down the significance of the new version, describing the modifications as "minor changes." Read more...

"As a result of a defect in the software program for the packet sniffer, the packet sniffer automatically deactivated whenever the compromised (Dave & Buster's) POS servers rebooted in the normal course of the operation of the servers," the indictment said. "Therefore, in order for the packet sniffers to capture data from the compromised D&B POS servers on an ongoing basis, the defendants had to regularly reactivate the packet sniffers." This group might even have had a hand in the TJX incident. Read more...

That which keeps consumers satisfied seems to be part of an E-Commerce site’s culture, as top (and bottom) players tend to show little movement, year to year. The latest results from measurement firm ForeSee Results seem to reinforce that.

Several of the top sites this year (Netflix, QVC, Amazon, DrsFosterSmith, Shutterfly and Newegg) changed only a few percentage points—and often less—from last year’s numbers. The percentage change for those at the bottom of the list (PCMall, PCConnection, Efollet, Bidz and Home Depot) is even smaller. ForeSee CEO Larry Freed said that a score of 80 percent or higher is “a really good score,” in the 70s “is in the average realm today” and anything below the 70s needs some serious work. Netflix came in at 86 percent, QVC at 84 percent and Amazon at 83 percent, while Home Depot and Bidz were both 69 percent, Efollet was at 68 percent and PCMall (the lowest) was at 67 percent.…

These leaders also tend to be more successful at getting business units and other departments to share the cost of PCI compliance with IT. Read more...

For e-tailers who still think that Web video may be a fad, consider this stat: In March 2008, U.S. Internet users watched 11.5 billion online videos. That’s a 13 percent gain from the prior month and a 64 percent gain from the identical month the prior year, according to Comscore.

In March, Google Sites once again ranked as the top U.S. video property with more than 4.3 billion videos viewed (38 percent share of all videos), gaining 2.6 share points versus the previous month. YouTube.com accounted for 98 percent of all videos viewed at Google Sites. Fox Interactive Media ranked second with 477 million videos (4.2 percent), followed by Yahoo Sites with 328 million (2.9 percent) and Viacom Digital with 249 million (2.2 percent).…

Thanks in no small part to soaring traffic on YouTube, Google for the first time took the top slot in American consumer reach in April 2008, besting Yahoo.

But it took that top slot just barely, reaching 141 million Americans in April. Yahoo ranked second with 140.6 million visitors, followed by Microsoft Sites with 121.2 million visitors. …

When TJX announced a MasterCard agreement last month to pay $24 million for data breach costs stemming from the industry’s worst payment card data breach, it was contingent on at least 90 percent of the banks agreeing.

No surprise, but TJX made that acceptance rate with room to spare, coming in at 99.5 percent, the retailer announced May 14. …

NeoCatena Networks has in the wings a product designed to stop fraudulent or bad tag data from getting into the system from the supply chain.

Applying Internet-level security to RFID is something that has not gone very far, according to this RFID Update story about the anticipated rollout. NeoCatena Networks is developing RF-Wall, an appliance to be installed between RFID readers or controllers and middleware servers, edge servers or host applications in networked RFID systems. The product acts as a firewall that authenticates RFID tags prior to allowing their data to pass into enterprise systems and also scans input to detect and block malware. RF-Wall works by using the unique tag ID to create a digital signature.…

Retailers focused on contactless payment might want to circle July 24, 2008, on their calendar. That is when the U.S. Federal Trade Commission will hold a hearing in Seattle “to explore the growth of contactless payment systems and the implications for consumer protection policy.”

Here are the details of the FTC’s hearing along with a link to submit comments electronically. There are lots of legitimate pros and cons on this issue, but the panel should at least understand the merchant’s perspective.…

Guess this is what the cliche-afflicted would call a “sign of the times.” Macys is killing the Bloomingdale’s catalog while Amazon.com is selling copies of Bloomingdale’s 1886 catalog for $12. (Can you imagine the number of out-of-stocks in that thing?)

Current Bloomie’s owner Macys is killing the classic catalog “by early 2009” to focus more on its Web site and “reduce redundancies” (corporatespeak for pinkslip panic). A Macys statement even came up with a politically correct reason to zap the catalog: “Eliminating the paper catalog is also consistent with our sustainability and environmental policies of communicating more with customers electronically and less in paper.”…

California authorities have arrested two men in connection with another retail card-reader switch scam, an effort that police say brought in about $225,000 from 222 victims who swiped their debit cards at a regional grocery chain.

The arrests were in connection with the debit-card thefts at California grocery chain Lunardi’s, where police say the pair swapped out part of the card-reader with a skimmer, according to this San Jose Mercury News story. It was unclear whether the data was collected by piggybacking on the store’s network, wirelessly or if thieves retrieved the data by re-swapping the machines later. The Lunardi’s store that was hit is based in Los Gatos. The paper also reported that a nearby Los Gatos Arco gas station suffered a very similar debit-card breach a couple of weeks earlier.…

To state the obvious: It's getting consumers to use them. I say it's obvious, but one wouldn't guess that based on what the vendors were saying this week. Read more...

Las Vegas was hosting the 2008 Food Marketing Institute and Marketechnics show, which felt like self-checkout central this week. Read more...

The story began on May 8 when a woman visited a Baltimore Home Depot to buy a few odds and ends, including plants, pots and tile sealer. Read more...

Theodore Karantsalis had filed the lawsuit for several reasons, but one was to prove that consumers would fare far better—faster, easier and more money—in small claims court than as one of many in some class-action litigation. Read more...

Not only was Twitter's 37 hours and 16 minutes of downtime the worst in the group, it was almost double the amount of downtime from the second worst-performing site (Reunion.com, with 18 hours and 55 minutes of downtime). But even Twitter's numbers amounted to an uptime that sounded good: 98.72 percent. Pingdom's Peter Alguacil said those percentages can be misleading. Read more...

One of the concerns is that companies have already spent money on encryption. The most popular reason for not implementing tokenization is that companies have already implemented data encryption and key management systems costing hundreds of thousands of dollars, and either they did not feel they needed tokenization or they were unwilling to be perceived by upper management as "changing course" by recommending the removal of the data they just spent all this money to protect. Read more...