Evan Schuman's StorefrontBacktalk

Multi-channel ISV Junction Solutions purchased a $4 million POS vendor called ISS Retail this week. Junction CEO Brian Carpizo wouldn’t say precisely how much the company paid to purchase ISS, but he said that the company recently received $7.5 million in financing and that it’s reasonable to conclude that the purchase—consisting of cash, stock and non-cash items such as seller notes–was funded with that money.

The two firms were initially preparing an OEM relationship but concerns developed that Junction would “invest millions” into ISS and ISS could then fall into the hands of a competitor, Carpizo said. The OEM talks then quickly morphed into an acquisition negotiation.

Next week, Junction will announce that it is also acquiring a California E-Commerce software company called ThePage.com, for an undisclosed amount. …

Staples, the $16 billion 1,800-store chain of office supply stores, is deploying about 8,000 Fujitsu POS terminals plus an unspecified wireless handhelds for inventory and line-busting, according to a joint statement issued on Wednesday.

The 3-year technology and services deal includes TeamPoS 2000 and TeamPoS 3000 POS terminals plus iPAD handheld wireless terminals and is part of a particularly long relationship (more than 20 years) between Staples and Fujitsu.

Fujitsu will also continue to stage, manage and install all in-store computer configurations, including hardware upgrades and replacement, as well as product procurement, the statement said. Fujitsu also will maintain multi-vendor technology devices, provide tactical help desk support and include services such as wiring, refurbishment and disposal.The terms of the deal were not disclosed. …

TJX is learning that the trickling out of bad news is a great way to keep a negative story alive and to send distrust as high as possible. Remember that mid-December unauthorized access that it didn’t report until mid-January? Turns out it had taken place almost seven months earlier, back in May 2006. I guess they wanted to make sure the thieves had plenty of time before the public was alerted.

“We had said in our press release that we had discovered the breach in mid-December but we did not put in when it occurred,” TJX spokeswoman Debra McConnell was quoted as saying in a Computerworld story.

Meanwhile, in Pennsylvania, regulators there have decided that the credit card theft was, ironically, too big to require consumer disclosure. “Under a new state law that took effect in June, businesses are required to notify Pennsylvania consumers by letter, telephone or e-mail if sensitive personal data is lost or stolen, exposing them to the risk of identity theft,” reported the Pittsburgh Post-Gazette. “But the AG’s office, which enforces the statute, said yesterday that personal notice is not required if more than 175,000 consumers are involved or if the cost of notification would exceed $100,000.”…

Technology and customization are wonderful things and when a grocery chain can use the Web to professionally pipe out personalized messages in cake frosting and then have it shipped–all without any human effort–it’s a potentially incredible thing.

Let’s stress the word potentially, as this picture of a cake that was delivered by the Wegman’s grocery chain makes deliciously clear.

Automation is good, but common sense is nice, too. The computer system decided the bracketed HTML commands were part of the message. Some of those instructions were proprietary to Microsoft, but it doesn’t look like vanilla HTML would have sliced any easier. Guess when it comes to saving personnel costs with automation and improving customer service, retailers can’t have their cake and eat it, too.…

Two days after confirming that driver’s license data was intercepted during a major intrusion last month, TJX officials have been directly accused of retaining “unnecessary” personal data, possibly in violation of PCI rules.

“We think it’s a little odd that (TJX) would characterize themselves as victims when it appears that they may have been capturing data that is unnecessary,” said Daniel J. Forte, president of the Massachusetts Bankers Association. Forte’s group is lobbying for a state law change that would force retailers who are recklessly lax in their security procedures to pay for the cost of repairs.

“When a bank must issue new cards due to a retailer’s data breach, it can add up to a significant expense considering that thousands of cards could be involved. MasterCard, and now Visa, has in place a process for banks to make claims for the cost of re-issuing cards. However, there is no guarantee that the full amount will be reimbursed,” Forte said. “Additionally, there is the fraud issue. If a fraud does take place, MasterCard and Visa have a zero liability policy in place for the benefit of consumers, which is good. However, the cost is borne by the bank even if the retailer is responsible for a major violation of the card association rules resulting in fraud. Does this make sense?”…

When TJX Companies Inc.—the $16 billion global retail chain that owns T.J. Maxx and Marshall's, among many other brands—disclosed this week that it had "suffered an unauthorized intrusion into its computer systems" in December, it seemed to be forthcoming.

After all, the chain issued what appeared to be . But a closer reading of the statement raises quite a few questions.Read more...

The retail technology world of 2007 is absolutely in transition and nowhere is that more clear than here at the industry's largest gathering, the National Retail Federation's tradeshow and conference.

There are primarily two transitions. The first is an in-store transition, from a world where technology was virtually all behind-the-scenes as far as consumers were concerned to one where the bits-and-bytes are what the industry coyle dubs customer-facing.Read more...

While working the NRF show this week, a theme that emerged in almost every conversation was the online/offline struggle and I usually asked how much of that CIO's chain's revenue was virtual as opposed to physical.

That's where one particular CIO—who put his own chain's online revenue significantly south of the industry standard of about 5-6 percent—offered a wonderful insight. When asked what the percent would likely be when his company would take online-offline integration seriously, he said, "The day that neither myself nor my CFO has a clue what the percent breakdowns are, that will be the day we've got it right. As long as my numbers are sufficiently segregated that I can easily identify what's online and what isn't, we'll still have a long way to go."Read more...

The world of retail technology has learned to always take notice when the Metro Group–a massive German retailer–starts to take anything seriously. So when Metro this week confirmed that it had invited Checkpoint Systems to join its ambituous 36-dock door trial of Gen2 RFID, it raised some eyebrows. Checkpoint’s official role is hardware integrator for the trial.

Each of 36 adjacent dock doors at the Metro distribution center was equipped with a Gen2 RFID reader, according to a story in RFID Update. At the same time, pallet loaded with about 60 tagged Procter & Gamble goods was passed through each portal and onto a docked truck at full operational speed, meaning each pallet was in the RFID read field for between one and one and a half seconds, the story said. A joint statement put the accuracy at a “98.6-percent-plus read rate simultaneously from multiple pallets as they were wheeled through the dock doors.”

“The results represent a significant milestone in European RFID operational deployment,” said Dr. Gerd Wolfram, Managing Director of Metro’s Information Technology Group.…

The National Retail Federation’s CIO Council has appointed a new chairperson and vice-chairperson and tapped CIOs from Adidas and Kohl’s for the gigs.

Peter Burrows, Senior Vice President and CIO, Adidas America, was elected chairperson of the panel and Jeff Marshall, Senior Vice President and CIO, Kohl’s, was named the panel’s chief vice. (One can never have too many vices.)

Burrows, who had been serving as the panel’s first vice chair, joined Reebok in 1992. Prior to joining Kohl’s in 2005, Marshall was Senior Vice President and CIO of The Men’s Warehouse.…

A new restaurant product identification standard for POS and commercial kitchen equipment integration has been introduced by an international group of standards groups, lead by the National Retail Federation.

The groups–including the Association for Retail Technology Standards (ARTS), the National Council of Chain Restaurants, the North American Association of Food Equipment Manufacturers (NAFEM) and a Japanese not for profit foodservice support corporation called OFSC–say that they hope the improved product identification will help lower IT costs and improve food safety.

“As restaurants continue to diversify and expand their menus, it becomes more difficult for managers to keep track of information,” said Jack Whipple, President of the National Council of Chain Restaurants. The POSLog for Foodservice Technical Specification provides a set of consistent data messaging standards that enables POS data to easily flow to back-end financial systems for better sales reporting and inventory management. The standards also incorporate commercial kitchen equipment standards that monitor proper operations, maintenance and up-time, as well as food safety protocols.…

Oracle on Monday will official launch its Retail Returns Management package, which will support highly-customized returns policies, such as one allowing a frequent purchaser to return more products than a less profitable customer.

Oracle is pushing the package’s ability to track–and enforce–returns across mutliple channels, making it theoretically easier to deal with in-store returns of catalogue and online purchases, as well as those from a store in another state.

This has some strong potential as many retailers are feeling the pressure to liberalize their return policies. This suite could at least allow merchants to formalize exceptions, which might at least take away some of the sting of aggressive return policies. Also, the integrated CRM capability across multiple channnels couldn’t hurt with that elusive single-view-of-the-customer goal.…

Kroger’s, which controls about 2,473 U.S. supermarkets including Ralphs, Fred Meyer, Food 4 Less and King Soopers, has inked a deal with IBM to use Big Blue’s Store Integration Framework across its chain, the two companies confirmed Friday.

The firms issued a vague statement that said few specifics about the plans, other than it will somehow involve more than 30,000 already-installed IBM SurePOS 700 POS units and that they are now being monitored by Tivoli Manager for Retail software.

Kroger CIO Chris Hjelm issued a brief statement that his chain intends to “significantly reduce development cycle times by using the open standards and techniques available through IBM’s framework.”…

Out of 30 top E-Commerce sites analyzed this past holiday season by web traffic tracking firm Keynote Systems, only two sites made it all the way from Black Friday through Christmas Eve without crashing: Target and Barnes&Noble.

This holiday season saw several notable E-Commerce site crashes—including Wal-Mart and Macys–but to lose its crash-free virginity label, a site needed to record only one hour’s worth of outage. Target and B&N achieved that distinction, with two others—OfficeMax and CircuitCity—getting close with just one hour of downtime apiece, said Keynote senior manager Ben Rushlo.

“A lot of these sites were unable to pull off a flawless holiday,” Rushlo said, adding that his team also looked at responsiveness, where JC Penney, Ambercrombie & Fitch, CircuitCity, OfficeDepot and Staples fared well. In general, apparel sites fared the worst, with one site—which Rushlo wouldn’t identify—showing a routine slowdown of about 70 percent.…

As key governments–especially in Latin America and Asia Pacific–start protecting against the most common forms of credit card fraud, they are pushing the thieves into other countries and making it the problem of another country’s retailers, according to a new report from market research firm Frost & Sullivan.

“There is a noticeable shift in card related fraudulent activities to
neighboring countries using less secure magnetic stripe cards for a majority of their transactions. With the United Kingdom implementing Chip
and PIN and France implementing dynamic data authentication (DDA) cards, countries such as Germany and Italy are facing the brunt of the increasing migration of fraud,” the report said. “Singapore and Indonesia are facing a significant threat from fraud escalation and are considering a move toward EMV-compliant card technology. This phenomenon is significantly feeding the demand for electronic funds transfer (EFT) at point-of-sale (POS) terminals worldwide.”…

A software package that will—without human intervention--add and remove products based on inventory and item profit margins will be introduced next week by Mercado Software.

The significance of the rollout of Mercado 4 is not in the integration between web analytics and the E-Commerce platform—which has been offered by various vendors—but in the package's ability to instantly make site changes without employees getting involved.Read more...

With a backdrop of renewed E-Commerce fraud fears, EBay’s PayPal is doubling its buyer protection effort–to $2,000–for some eBay transactions, according to a statement eBay and PayPal issued Wednesday.

The program will be offered by American and Canadian eBay sellers who qualify by “maintaining a 98 percent positive feedback rating and having at least 50 feedback points.” The program covers products that are not delivered as well as “items that are significantly not as described,” the companies said.

Effective Jan. 17, PayPal said the program should cover “more than 95 percent of items listed on eBay.com.”…

Despite cross-channel initiatives of every kind at virtually every major retailer, it seems that certain capabilities at any one company either shine offline or online, rarely both.

The best evidence of the great online/offline divide can be traced to the earliest days of the Web. As the Web was just creeping into prominence, if you had asked any hotshot market observer who would likely run the biggest online bookstore in the new medium, the answer would have been Barnes & Noble or Borders, anything but Amazon.com.Read more...

Like the constant reports that every food imaginable causes cancer or some other deadly ailment, IT managers looking for the mythical safe security approach would be best served by giving up and having a bowl of hot fudge. This is prompted by a university report out of the U.K. that chip-and-PIN terminals, which were touted as a more expensive but more secure way to validate credit and debit card purchases, are–you guessed it–not secure.

A team at the University of Cambridge “opened up one of the supposedly tamper-proof terminals, replaced its internal hardware with their own, put it back together without any external evidence of tampering and then got the machine to play Tetris,” according to a report in Computerworld.

Researcher Saar Drimer said the school’s experiments proved that all components of the PIN pads used to authenticate such transactions could be made to interact and respond to input from one another. “This means that the card reader can read information from the chip and display it on the screen. The data from the keypad, such as a PIN, can also be recorded,” Drimer was quoted as saying.…

NCR on Monday confirmed that it is splitting into two independent publicly traded companiesby spinning off its $1.5 billion Teradata data warehousing business.

The impact on retail tech may be minimal, but the company is hoping that the fewer distractions from its self-checkout and POS businesses couldn’t hurt. NCR said the distribution ratio will be determined at a future date and that the spin off is “expected to be completed in six to nine months,” subject to regulatory approvals. …

The final figures are starting to trickle in for the 2006 holiday E-Commerce season and one new report pegs the growth from last year at about 25 percent. The figures–released by ComScore–average out to a perfect 25 percent, with the full year’s E-Commerce sales increasing 24 percent (total of $102.1 billion) and the holiday season alone jumping 26 percent (to $24.6 billion). They pegged the top spending etailer days–in order–as Wed., Dec. 13, Mon., Dec. 11 and Mon., Dec. 4.

ComScore also said consumers are buying later than ever. ” The final three weeks of the holiday season (Weeks 7-9) saw a major surge in spending as the procrastinators came out in full force, driving a 31-percent increase versus the corresponding weeks in 2005. The week leading up to Christmas (week ending December 24, 2006) saw the biggest surge with a 45-percent increase versus the corresponding week a year ago, as consumers showed their faith in online retailers’ ability to ‘deliver the goods’ in time for Christmas,” the report said.

Like all surveys, it’s wise to not put too much reliance on the figures, as the methodology and accuracy is questionable. ComScore, for example, guesses at these numbers based on what it describes as a “global cross-section of more than 2 million consumers who have given comScore permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing.” But given that these results are similar to other results, they are probably worth noting.…

Score it “ignored customer” one, Dell zero. This is an uplifting–or frightening, depending on your dayjob–saga of what can happen when a customer’s problems are ignored.

The tale, which is a few weeks old now, comes to us from the Star-Ledger, the largest daily newspaper in New Jersey. The Star-Ledger’s report tells of a $2,000 laptop that was sent to Dell for repair. Dell sent back the hard-disk but lost the rest of the laptop and offered the customer a refurbished model without an extended warranty.

After 19 calls to Dell and its partners were ignored, the customer get clever: He sued Dell in small claims court and–this is the best part–he served the papers on a Dell store at a local mall. As one would expect, it was ignored and the customer quickly won a default judgment for $3,000. Dell quickly settled. It’s a story well worth reading.…

Tokyo’s famed Ginza shopping district is about to be surrounded by 10,000 RFID tags and beacons, intended to help navigate visitors to local merchants.

The Tokyo Ubiquitous Network Project seeks to install RFID, infrared and wireless transmitters provide location-related information to people carrying prototype readers developed for the trial, Ken Sakamura, a professor at the University of Tokyo and the leader of the project told the IDG News Service. It features a 3.5-in. OLED (organic light-emitting diode) touch-panel display and a host of networking interfaces. There is RFID, infrared and 429-MHz wireless for interacting with the beacons in the trial, a wireless LAN for connection to the Internet and a Bluetooth link. General trials in Ginza are scheduled to begin on Jan. 21 and will run until March.…

Major e-tailers this holiday season kept their customers happy for the most part, according to a report issued Thursday by the Gomez Retail Benchmark.

But there were still some order process response time laggards including the Gap (35.09 sec.) and OfficeMax (20.73 sec.), who were quite slow compared with J.C. Penney (6.23 sec.), CircuitCity (7.27 sec.) and Dell (7.75 sec.). The benchmark average for response time was 13.97 seconds.

On availability, the laggards were Williams-Sonoma (88.83 percent), HP (92.57 percent) and QVC (93.82 percent) and the most available sites were Target (99.86 percent), CDW (99.75 percent) and Apple (99.68 percent). The benchmark average for availability was 97.59 percent.…

Although RFID is making major adoption advances globally, different continents are using the tags in very different ways, according to a report just released by British RFID analysis firm IDTechEx.

North America, for example, leads the world in retail applications (thanks, Wal-Mart) with Europe and East Asia faring better in the Finance space and Australiasia is supreme in the books/libraries/archiving category.

“Contrary to popular opinion, this is at item level, from books to jewellery and apparel, not pallet and case, which is in the ascendant only in North America and then only in the number numbers of RFID projects, not the money spent, which has been little more than $100 million under the retail mandates,” the report said.…