Evan Schuman's StorefrontBacktalk

The folks at ExactTarget discovered a few bits of space in E-Commerce land that weren’t already supporting advertisements. Such blatant examples of straight communication could not be tolerated. Their target: transactional E-mails.

Here’s how they described their plan in a message sent to reporters: “Transactional E-mails, as defined by CAN-SPAM, are those sent after a purchase, confirming a subscription or sharing product update news. In the past, transactional E-mails have been limited to IT systems that used a server to generate an automatic confirmation message. There was no marketing messaging, or up-selling possibilities included in the messages. This was a huge missed opportunity.”

Maybe. Or maybe it was intentional, as they didn’t want critical confirmation messages to be ignored or deleted. My favorite part is where they bring up the CAN-SPAM Act of 2003—which was intended to prevent unsolicited ads from being sent to consumers—as though it supports this action. …

With many trying to out-service and out-specialize Wal-Mart, grocery chains are looking to spend more than $9 billion over the next year, according to a new report from the IHL Consulting Group.

One of the big trouble spots that IHL saw for grocery chains is the lackluster performance of many loyalty programs, which IHL President Greg Buzek attributes to most retailers deploying the packages poorly. The programs are generally used more as discount programs ("come in with your card and you'll get discounts on 400 specially-marked items") than as an attempt to understand individual customer's buying habits and to make their experiences better, Buzek said.

E-tailers looking to expand their footprint in Europe are finding a vibrant growing marketing--$133 billion in sales last year, with annual 25 percent growth for each of the next five years, according to a new report from eMarketer.

But those merchants will also find a Europe that is changing, with vastly different country personalities and preferences. Europe may be moving to one consolidated currency, but its residents still use those Euros quite differently. The money may be Euros, but Germans still purchase differently than the French, Italians and the British.

In our Retail Week In Review audiocast for Aug. 8, our panel looked at: Consumer Reports story that U.S. consumers lost more than $7 billion over the two years to viruses, spyware and phishing schemes; the Black Hat conference and its demo of how easily cookies can be captured online and used to fake identification; and the security issues surrounding contactless payment, as MasterCard announced this week a sharp expansion of its PayPass contactless card program.

Panelists this week were: Mark Rasch, former head of the U.S. Justice Department’s high-tech crimes unit; Motorola’s Chris Hinsz, who is the newest member of the PCI Security Standards Council; and Dave Taylor, president of the PCI Security Vendor Alliance, whose dayjob is with Protegrity.

Site visitors can listen to the full 30-minute discussion or to panel introduction plus just the conversations about Online or Contactless Payment or Cookies.…

U.S. consumers lost more than $7 billion over the last two years to viruses, spyware, and phishing schemes, according to a report issued this week by Consumer Reports.

The magazine survey “showed that consumers face a 1 in 4 chance of succumbing to an online threat and becoming a cybervictim, a number that has slightly decreased since last year,” the story said. “The number of consumers responding to e-mail phishing scams has remained constant at eight percent. Consumer Reports projects that one million U.S. consumers lost billions of dollars over the past two years to such scams.”

The most interesting part is that the percent of consumers being scammed–at least via Phishing–has stayed roughly constant, suggesting that cyberthieves are ratcheting up their tactics at the exact same rate that consumers are becoming to their old ways. Not one of the more encouraging stats.…

McDonald’s is testing a POS unit that uses images to try and reduce the number of flawed orders.

This is indeed a concern for the fast-food leader because it has fared quite poorly in order accuracy, finishing 16th out of 25 restaurants this year and finishing 25th and 20th for accuracy the prior two years, according to this story in Chicago Business. The register, now in 10,000 of McDonald’s worldwide 32,000 restaurants, has a touch screen with large, colorful images of each menu item instead of small buttons with product abbreviations.

With an expanding menu and an increasing number of workers whose first language is not English, it will be easier to train employees with photos on the registers. McDonald’s CEO James Skinner is quoted as saying the new POS approach would improve accuracy 33 percent and allow restaurants to serve about a dozen more cars an hour.…

Amazon.com has started beta-testing an update its payment offering, tweaking its redirect service to be more competitive against PayPal and GoogleCheckout, according to this story in the Seattle Post-Intelligencer.

The Amazon Flexible Payment Services was launched Friday as a beta test, and it is the first one built specifically for software developers, the company said. The program allows developers to send and receive money, create specific instructions on how payments can be made, aggregate micro-transactions such as a penny into larger transactions and view account balances. Amazon.com receives a fee for every transaction, the story said, but the Seattle-based company has a sliding scale based on whether payments occur through credit cards, bank drafts or from transfers within Amazon accounts. …

It’s taken a bit longer than other parts of the economy, but the restaurant industry is finally embracing online sales and discovering some advantages that have not been issues for other segments. Increased order accuracy and faster meals are among the advantages digital diners have discovered.

In this interesting New York Times piece, the story looks at generic long-standing complaints about restaurant take-out orders, including long hold times and errors with order description and delivery addresses.

Communication difficulties with phones in noisy restaurants—made worse with language problems and entry-level employees—had allowed errors and delays to wipe out the convenience pitch. These were all issues that found an effective ally in online. And the only demographic that made a huge difference was a fast-growing one: consumers with broadband. …

We looked at the top security topics of the week on Friday, in an audiocast with Avivah Litan, Gartner’s security analyst, and Chris Hinsz, the newest member of the PCI Security Standards Council, who happens to hail from Motorola. Readers can listen to the entire 30-minute audiocast or check out just the segments that interest them most: An analysis of the latest Visa PCI statistics, with thoughts on improving the credit cards themselves and the key reasons why forbidden data is still being retained; How TJX is faring after the disclosure of the retail industry’s largest data breach; The latest information about the insider security threat and how the records stolen from Fidelity National Information Services and Certegy is now at 8.5 million records, which is a lot more than was originally revealed.…

When the world's largest retailer struggles with a database issue, the numbers can be a bit daunting. It's datawarehouse, for example, is larger than 4 Petabytes. That's more than 4,096 TBytes, give or take a few million bits.

The chain has more than 6,000 stores, with some having almost a half-million SKUs each. You think your Excel spreadsheets are bad? Wal-Mart's database tables have literally 100 billion rows. The retailer's POS systems have to ring up some 276 million items—a day.

This peek into the IT operations of this $345 billion retail empire comes courtesy of a phone interview with Wal-Mart Chief Technology Officer Nancy Stewart.

Ingrian Networks this week introduced a "60-Day Program For Compliance," that puts together PCI consulting and software "in order to bring customers into compliance in 60 days or less." Yes, Virginia, there is a devil.

In this case, the devil is in the details (as well as in an executive office at Ingrian). The Ingrian statement implies, suggests and does everything possible to suggest that it will deliver compliance "within 60 days or less." Never mind that it's reckless to make such a comment without knowing the particulars of the retailer's system and the problems that have to be remedied.

Retail security managers are nervous and some may fall for this pitch and not ask, "Does this claim make sense? Does it pass the laugh test?"

The E-Commerce spend in the U.S. for this year's second quarter jumped 19 percent, to $47.5 billion, compared with last year's identical quarter, according to a statement released this week from ComScore.

In a different E-Commerce report this week, Keynote Systems found Amazon and BestBuy as the strongest in online customer experience while CircuitCity took the top slot for site reliability and Staples got kudos for site responsiveness.

Keynote traditionally doesn't release the names of the sites that fared the worst, but the sites that were examined but not mentioned in the top slots were Buy.com, Costco, Office Depot, Sears, Target and Wal-Mart.

As the big Sept. 30 deadline for retailers to comply with credit card security rules, Visa and others ponder the carrot-and-stick argument.

A few days ago—on July 31—it was the deadline for some 6 million of the nation's smallest retailers to report whether they're compliant with PCI standards. It's an interesting group called Level 4.

Although it's the group that includes the smallest merchants in the U.S., many of them are not that small. It could include a retailer that makes 999,999 Visa transactions a year, including as many as 19,999 E-Commerce transactions. So it's important to remember that this group isn't solely mom-and-pop hardware stores and Oliver's Bait Shop.

Last month’s report of a LAN administrator at Fidelity National Information Services who stole 2.3 million customer records may have understated the situation, with a new SEC filing placing the number of names taken at 8.5 million.

According to a report of the filing in SecureComputing, “some of the stolen records only contained names, addresses, telephone numbers and birth dates, but about 5.7 million contained checking account numbers and 1.5 million included credit card numbers.”…

When Visa on Monday released its latest PCI compliance statistics, it showed small but steady progress, with slight increases in most areas. But it also showed that there is still a small handful of major retailers who are still retaining prohibited credit card information.

Visa stressed in its statement that the vast majority (96 percent) of Level 1 merchants—a category including virtually all of the nation's largest retailers—have written to Visa that "they are not storing sensitive account data" including credit card security codes and PINs. But given that Visa has said that there are 328 Level 1 merchants in the U.S., that four percent suggests that about 13 major retail chains aren't even claiming that they've stopped retaining that data.

For those who still argue that TJX is being bloodied by their data breach problems, here’s the latest tidbit, with a major financial firm increasining its stock price target for TJX, “encouraged by the discount retailer’s strong business trends and defensive business model.”

The Credit Suisse boost came when analyst Paul Lejuez raised his price target by $3 to $35, implying an upside of around 8 percent from Friday’s $27.31 closing price, according to this Forbes.com story. “With strong current business trends, a myriad of initiatives to continue to improve productivity and reduce the expense structure, and a defensive business model, TJX (nyse: TJX – news – people ) is well-positioned to beat expectations and outperform the group,” Lejuez wrote in a client note.…

Under the heading of "be careful what conclusions you draw," was chatting the other day with Greg Buzek, president of the IHL consulting group and one of the smartest retail observers working today, about self-checkout trends. Had written recently about IHL's self-checkout report and had questioned the Greg's suggestion that consumers love self-checkout.

Greg mentioned that beyond retail segment breakdown (grocery versus home supply, for example), a critical self-checkout area to consider is geography.

JCPenney has been experimenting with ways to bring online depth into its brick-and-mortars, with some healthy (107 percent sales boost) initial increases in test stores, according to this DMNews,com story.

The pilot–which was launched late last year in 40 stores–is interesting in that it matches some attractive numbers with bringing online into offline, but it’s unclear if the “this is different” newness factor was isolated. If it wasn’t, the sales bump might be more a result of the trial than what the chain would see in the longterm. Also, this appears to be true multi-channel–as opposed to the desirable merged channel–as the systems don’t appear to talk to each other. Still, it’s an encouraging step.…

The retail tendency to believe in one-size-fits-all simplicity is a failing. One needs look no further than PCI security enforcement, Web traffic analytics and retail self-checkout to see that.

But a new self-checkout study forces the issue. The study finds a tremendous success rate with self-checkout--which is fair and valid--but it didn't even consider the extreme differences between different kinds of retailers. Consider the differences between grocery chains--where self-checkout tends to be detested by consumers, who barely tolerate it--and home supply chains, where it is honestly embraced.

Google this week launched a new cookie program, aimed at appeasing privacy advocates. The search giant changed the cookies' expiration date from 2038 to two years after the consumer's last visit to Google.
At first glance, it sounded like an accommodating change. In reality, it's far from clear whether it truly gives privacy groups anything. First, giving up the 2038 date was easy, given that it's highly likely the Google cookie of today (or of a few years ago) will be entirely irrelevant to the Web user of 2038.

Gomez decided to look at the Web performance of the major presidential candidates. That's fair, but it then suggested a linkage between page response rates and the donations that candidate can bring in.

"While there is more to solidifying a candidate's relationship with web-savvy voters than just the speed of the campaign web site, it surely is one element that affects the impression a voter receives about each candidate," the Gomez statement said. "Gomez believes it also can affect the success of a candidate's online fundraising."

What's wrong with that picture? I can just some of the larger lobbying firms saying, "This one has the best shot at victory and is open to our position, but his homepage's refresh is so 20th Century. We'll pass."

Just to prove that it can be done, a pair of Swedish networking specialists have crafted a 40 gigabits-per-second fiber-optic connection for a Stockholm residence. To put that into context, that’s almost 14 times faster than the ceiling speed for a T3.

The speed is reached using a new modulation technique that allows the sending of data between two routers placed up to 1,240 miles apart, without any transponders in between, said Hafsteinn Jonsson, head of the Karlstad city network unit, according to this Yahoo News story.

To the extent that such speeds ever become practical, this could start to push the limits of hard-disk desktop space, let alone the amount of RAM needed to manage such a vast data pipe. That said, it still sounds like a fun connection to have in one’s basement.…

Contrary to some concerns that recent Wal-Mart silence about RFID means the retail giant was backing off, the Arkansas-headquartered firm is actually proceeding aggressively—and quietly, according to the latest monthly RFID report from financial management firm Robert W. Baird & Co..

“Most industry participants, and certainly most external observers, believe Wal-Mart has curtailed their RFID efforts, particularly given little in the way of new communication from the retail giant. However, we believe the primary reason for the lack of communication is the transfer of RFID responsibility to logistic operations within Wal-Mart from IT,” the report for July said. “Such a transition, along with the continued implementation of readers, is likely requiring some digestion. We view this transition as a natural progression, and are encouraged that Wal-Mart views RFID importantly enough to make it the responsibility of their day-to-day operators. We further understand that Wal-Mart has recently sent a series of letters inquiring of some vendors their lack of compliance, suggesting that their external communication efforts are targeted.”…

Two Rochester Institute of Technology students have launched a clothing site for the visually impaired, featuring sound and text instead of images, apparel recommendations based on a questionaire and clothing arrives with braille tags attached with descriptions and washing instructions.

The pair are relying entirely on designer donations to supply their inventory, but will be charging full price in an effort to stop sighted buyers from taking advantage of any deals, according to this TechCrunch story.…

Are the brick-and-mortars that have materialized, hanging from the EBay empire, long for this world? This interesting AuctionBytes.com story out of London suggests they may have some hurdles.

The story details one company’s decision to shut down its EBay drop-off stores and will focus on home collection efforts. “The company’s main demographic are busy professionals who don’t necessarily have time to visit Auctioning4u’s shops and prefer the company’s handy home collection service; they want collections from their homes and business at times and dates of their choosing.” Interesting read.…