Evan Schuman's StorefrontBacktalk

A new filing on Wednesday (March 24) from TJX had the chain refusing to offer the specifics behind its loss claims in an attempt to fight a federal subpoena. Attorneys on both sides raise some legitimate questions about how to fairly calculate the cost of a breach. Is it limited to what is taken or to what the thief attempts to take? Should the loss include what was actually—and successfully—accessed, or should it assume that when a card with a $10,000 limit is taken, a $10,000 loss—regardless of what the thief did—should be recorded? If class-action lawsuits are filed (and they will be filed), should the cost of lawyers and courthouse travel be included? What about payment for additional security? And perhaps a new POS system that includes that better security?Read more...

Long before the term customer relationship management was bastardized to secretly mean salesforce automation, many companies had the vision of an IT system that would help them manage and maximize the relationship they have with their customers. The idea of being relevant is a complex equation that means a lot of different things to a lot of different people. Because no one really knows the secret formula to being relevant, Michaud's goal as an IT leader is to create systems that will help his business partners answer questions they don't yet know to ask.Read more...

PCI Columnist Walter Conway opines that he hates to do a bunch of work and get nothing for it. "That's too much like paying for dinner and then not sticking around to finish dessert. Often, merchants prepare a thoughtful risk assessment and then file it away (a.k.a., 'shelfware') until their QSA returns the next year, at which time it gets dusted off, reviewed and, hopefully, updated. If that describes your situation, you could be missing a golden opportunity to reduce your PCI scope, lower your risk and cut your cost of PCI compliance."Read more...

ABI Research is predicting that overall retail tech spending will grow to nearly $21 billion in 2014, an almost 50 percent increase from last year. The global integrated POS new sales segment alone will likely be at $6.56 billion this year, growing to $7.2 billion next year and $8.5 billion by 2014, said ABI Research Director Larry Fisher.

In North America, those integrated POS figures will be $3.3 billion this year, barely rising to $3.6 billion next year and inching up a bit more to hit $4.3 billion by 2014. The slower growth in North America is overwhelmingly because of installed base. As the sales are limited to new sales, it’s going to reflect much smaller percentage growth for an established market such as North America. …

We don’t typically share quotes from entertainers, but this retail line seemed worth it. From Bill Maher: “True love is like a salesman at Home Depot: It only comes along once or twice in a lifetime, so you gotta grab it.”…

But even setting aside the price, the technology still has several technical hurdles to clear. The current footprint is about three times larger than today's barcode and it's been testing with a read distance of anywhere from 2 centimeters to 10 centimeters whereas project leaders say that it needs to read at about a full meter—at the very least, a half-meter—to be effective.Read more...

The counter argument has been that these technologies allow retailers to redeploy people into positions where they can truly deliver customer service. The classic example: taking cashiers out of checkout lanes and instead having them carry customers' bags to their cars. Would Macy's be facing less of a backlash if, instead of quietly laying off some of those box wrappers, it prominently featured them in highly visible customer-facing situations? Consider an associate working aisles wearing a button that declares: "I was taken off giftwrap so I can help you here."Read more...

First, Procter & Gamble and other major manufacturers started direct selling, undermining their longtime retail partners. Now comes word that Visa is setting up its own virtual shop to move products. What, Brutus, the sharp, 8-inch interchange dagger wasn’t enough? You had to go for the jugular?

Visa’s E-Commerce move, called Rightcliq, is actually a rather clever CRM move to collect more data on consumers directly. “Rightcliq will enable consumers to track their purchases in one convenient location. This removes the hassle of remembering tracking numbers, digging through confirmation E-mails or having to double-check delivery dates,” a Visa statement said. “The information will all be stored in Rightcliq, giving consumers more control over their online shopping experience.” And here’s the unexpected kicker: The service will accept “other payment options, including competing brands.” Visa is setting up an E-Commerce arena in which people can make purchases on their Amex card? That says everything that needs to be said about how much Visa values those extra CRM tidbits.…

Strong mobile applications today understand the need for extreme efficiency of movements to allow for actions with as little effort as possible. That’s been the problem with mobile payment trials; they simply haven’t proven to be any faster than swiping a credit card. A new PayPal iPhone app—dubbed Send Monday—grasps this ultra-convenient attitude and attacks the nightmare of splitting checks.

By simply banging two iPhones together (gently, please. Those things are mostly glass), payment data is shared. “With bump, users can put two iPhones together and funds are quickly transferred between their PayPal accounts,” a PayPal statement said. “The Split Check feature lets users conveniently divide and quickly reimburse each other for the cost of a meal, including tip and tax, for up to 20 people. Collect Money allows users to request money from multiple people for a joint gift, team dues, concert tickets and more.” …

What would happen if we turned NFC on its head? For example, rather than the phone making a payment to the POS, it makes a payment to the restaurant's bank in the cloud. What would happen if the restaurant deducted the cost of lunch from Facebook credits? What if the guest could earn a free lunch by promoting the brand on Twitter? What if restaurants gave guests their menus on an iPad? What if that menu was customized to each diner’s likes, dislikes and allergies? What about a restaurant booth that has a video-conferencing setup that allowed to people to have lunch together without being in the same restaurant? Read more...

And he answers: Once your scope is addressed, you can tackle the other PCI questions--like separation of duties, encryption, key management, governance and the ability to conduct forensic investigation. You also will need to include due diligence of your cloud provider in your procedures for engaging a new service provider (Requirement 12.8). Personally, I’d like to know who else is sharing “my” cloud. Read more...

Gap’s site crashed for about 3.5 hours on Wednesday (March 17) and apparently took fellow Gap brands—including Old Navy, Banana Republic and Piperlime—down with it. The cause of the crash, which kept the site down from about 3 PM to about 6:30 PM (New York time), was not immediately known, said Gap Spokesperson Daniel Rubin.

Site performance tracking firm Pingdom was the first to report the trouble, a problem quickly confirmed by another Web performance firm, Gomez. “The error messages seem to indicate that the problem is very serious,” said Matt Poepsel, Gomez’s VP of Performance Strategies.…

The conventional belief among retail marketers is that Gen-Y consumers (especially teenaged girls) have zero sense of privacy and that they will—and do—share every aspect of their lives with anyone online. Well, if a new study out of Europe is to be believed, those girls may be a bit more private than their personaes would imply. It suggests that the teens will indeed share anything, but only with a relatively small circle of friends.

The report comes from Euro RSCG: “Although the average teen girl might have more than 100 friends on Facebook, she focuses on sharing key information with the one or two people closest to her,” the report said. “When they find a good deal, teen girls want to share it—but they’re more interested in tipping off a friend than in broadcasting the information. Shopping with just her best friend or sister, a teen girl will spend 23 percent more than when shopping with two or more friends. Shopping with a boy, she will spend less than half of what she spends with her close friend or sister. And shopping with her mother, who provides access to a larger budget and is also a key member of her intimate circle, she will spend triple the amount she spends with a group of friends.”…

The Centers For Disease Control have to tackle some wonderfully difficult detective assignments, including a recent case where they had to find out why people were getting sick from salami. (It turned out to be some pepper used as a seasoning.) The government operation is now formally tapping into loyalty card CRM databases from retail chains for help.

Some chains—such as Costco—have been using their CRM databases to alert customers to recalls for years. But the CDC hadn’t done so, at least not in an organized fashion. Now they are, according to this Associated Press story. “Through interviews and questionnaires, investigators suspected some kind of Italian meat was the culprit, but people couldn’t remember what brand they bought, CDC epidemiologist Casey Barton Behravesh said,” according to the AP story. “So the CDC asked supermarkets for certain buying information on seven victims in Washington state, focusing on suspect products rather than everything the customers had bought, Behravesh said. ‘We didn’t care about the brand of toilet paper people were buying,’ she said.”…

A new report from IHL concludes that “after contracting 9 percent in 2009, the Europe/Middle East/Africa region is in the process of seeing growth return to the POS market for the first time in two years.” IHL thought that Russia’s situation was especially illustrative. Following an 18 percent plummet in POS shipments last year, “Russia’s economy has stabilized and shipments should grow 6 percent in 2010 and once again see double-digit growth in 2011. If oil prices increase to more than $100 per barrel, the shipments will increase further,” said IHL President Greg Buzek.

“For most markets such as UK, France and Germany, the pullback of the last two years means there is pent-up demand because equipment has been kept longer than it normally would. The region did not see the same level of store closures and contraction that we saw in North America, due to employment laws that preclude closing stores in many countries, and that limits the used market for POS. So everything out there simply got older. Thus the pullback of the last two years increases the growth chances moving forward,” Buzek said. “Instability in Greece, financial issues in Dubai—which had been seeing strong growth—tight capital markets and the prospect of conflict between Israel and Iran remain drags on the region’s growth, but 2010 will grow. UK, Germany, France and Scandinavia will each see growth for the first time in 3 years. And preparations for the World Cup are driving adoption rates in South Africa.”…

Last Thursday (March 11), Google made a major—albeit extremely preliminary—move into local inventory search through a deal with a handful of major chains: Best Buy, Sears, Williams Sonoma, Pottery Barn and the Vitamin Shoppe. But instead of working out this process internally and then bringing in retailers—or the reverse, with retailers figuring it out first—Google's objective is to run the earliest stage tests with various chains "so we're both learning how to do this in parallel," said Paul Lee, Google Product Search's business product manager.Read more...

Facebook next month will add an API that will allow shoppers to automatically link to data about a favorite retailer and perhaps their purchases, the Wall Street Journal reported Tuesday (March 9). “Facebook users can already add information from a variety of sites to their news feed, the stream of stories they see when they log in. But the profile is more sacred ground and is a stronger signal of a user’s interests,” the story said.

Called the Roadmap Open Graph API, Facebook openly describes the new capability and says it is slated to be available in this year’s second quarter. That the API will be rolled out at Facebook’s developer conference next month is new but not unexpected. “The user will then have [the retailer’s site] listed in their list of connections on their profile as pages are represented today,” the Facebook description says. “Any content that [the e-tailer] publishes will show up in the stream on Facebook like it normally would. And, any time the user searches on Facebook, [that retailer] will show up prominently in search results.”…

The power of a mobile coupon program is not just in the convenience of the always-with-you device format. It's in the customizable nature of it and the related upsell and CRM implications. Why wouldn't Target offer consumers the ability to pick and choose—from their desktop machine—from a huge selection of offers? Those choices would provide valuable targeting information on an individual shopper basis. And if Target's decision is indeed to offer one blanket list of mobile opportunities, why not use existing CRM data to target certain offers to specific customer segments? Plus, why update those offers only once a month?Read more...

The Nokia 6212 used in the trial has a list price of $240; trial participants paid $110. But if the consumers made 12 purchases, they got to keep the phone for free. With six purchases, the phone's cost dropped to $55. Some 86 percent of participants made more than 12 purchases and, therefore, got the phones for free. The report dubbed the 18 percent who made exactly 12 transactions "gamers, customers who want to participate at exactly no cost to themselves."Read more...

"Real buyer and seller E-mail addresses will be hidden by our systems. All sellers and buyers will be assigned an Amazon E-mail alias," said an Amazon statement. "This will enable both parties to continue communicating as they do today with standard E-mail providers (such as Yahoo, Hotmail, etc.). However, that communication will happen via their new E-mail aliases instead of their real E-mail addresses. All communication will be stored and available for review in case of disputes." This move is very interesting. From a brand-building perspective, there are few things better than sitting back and creating a huge room for tons of your customers to gather and talk about you.Read more...

The direct-sell CG announcements are all couched in politically sensitive phrasing, with promises that it's just a short-term test to better understand mutual customers and that some of the data will be shared with retailers. Some even argue that these direct-to-consumer moves will help retailers make more money by allowing the manufacturer to better target its products. (That argument is not necessarily impressive, but making it with a straight face is.)Read more...

Although true item-level RFID is still years away, ABI Research is still confident that RFID sales will hit $5.4 billion this year. And it projects that number will reach $8.3 billion by 2014. The tagged segments expected to lead the way include real-time location systems, baggage handling, animal ID and a smidgen of item-level use in high-end fashion and other similar high-priced retail offerings.

“Other key opportunities include electronic vehicle registration, continued penetration of RFID-enabled e-ID/e-government documents—including health cards—and continued expansion of library systems. Also worth watching: slowed but continued progress in retail CPG supply chain management and multiple flavors of asset management that leverage RFID technologies, including specialty passive UHF tags,” said ABI’s practice director, Michael Liard. “Modernizing applications for RFID will grow more rapidly than their traditional predecessors such as access control, automobile immobilization, electronic toll collection and others that account for slightly more than 61 percent of the total market today. These applications are expected to grow 6 percent compounded annually from 2010 through 2014. In contrast, modernizing applications—animal ID, asset management, baggage handling, cargo tracking and security, POS-contactless payment, RTLS, supply chain management and ticketing—are forecast to grow roughly 19 percent in the same time period.”…

But we have now seen the first concrete government effort to slow down that data flow, and it comes from European Union data privacy regulators. An EU letter said that not only must Google provide more warnings to consumers before it sends cameras out to shoot street views, but that Google "should shorten the length of time for which it keeps the uncensored photographs it takes from one year to six months."Read more...

Failing to comply with Requirement 0 may be due to inertia or ignorance or both. Regardless of the reason, the result is excessive and unnecessary spending on people, process and technology, together with a lot of frustration. Read more...

After Colorado tried a creative approach to taxing E-Commerce purchases—forcing E-tailers to tell consumers how much state sales tax they owe—Amazon shot back Monday (March 8) by cutting off all its Colorado affiliates. Colorado’s governor issued a statement indicating understandable confusion, because the law doesn’t address affiliates and the Amazon move doesn’t spare them from the new requirements. The implication: that Amazon’s move was pure spite, designed to punish state businesses—and therefore the state–without helping Amazon.

Amazon’s E-mail said: “The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to ‘voluntarily’ collect Colorado sales tax—a course we won’t take.” Said Colorado Gov. Bill Ritter: “Amazon has taken a disappointing—and completely unjustified—step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process.” The battle of E-tailers Versus State Sales Taxes continues.…