Evan Schuman's StorefrontBacktalk

(For those who watch our coverage closely, we said last week that we were upgrading this particular food fight from bizarre to surreal. This week, it gets kicked up to borderline psychotic. If Heartland and VeriFone get any worse, we're going to have to hit an unabridged thesaurus somewhere.) On Wednesday (Nov. 11), Heartland issued a statement saying that on Monday (Nov. 9), a federal judge "granted Heartland Payment Systems’ application for an order to show cause against VeriFone Holdings Inc." The headline on this release said "Federal Court Grants Heartland Payment Systems’ Application For An Order To Show Cause Against VeriFone." Sounds like Heartland won that hearing, right? Not quite. Not at all, in fact. Heartland was asking U.S. District Court Judge Mary Cooper to issue a temporary restraining order against VeriFone and the judge refused.Read more...

The 63-year-old Willett has been at Best Buy since early 2004 and is leaving with the title of CEO, Best Buy International. He had served as corporate CIO, a title he held along with the CEO International title until Neville Roberts assumed the CIO title in late May 2009. But the way the retirement—slated to go into effect December 31—was announced was unusual.Read more...

A couple of years ago, Near Field Communication was seen in some influential corners—such as at consumer goods giant Procter & Gamble—as the ultimate victor in the fight between NFC and 2D barcodes. Many saw NFC as the better technology, with 2D barcodes being used as a placeholder until NFC was ready. But in the last couple of years, neither technology has gotten very far in the U.S. Few phone manufacturers included the feature and even fewer developers tried to design for it.Read more...

It might be the ultimate in retail technology: A way to make huge profits by selling things that do not need to be acquired, stocked or shipped. But these items—perhaps a diamond-lined collar for a virtual pet or a special power in a shared game—are becoming big money. Virtual goods sales are projected to hit $5 billion this year, according to The New York Times.

But virtual goods are hardly free. The paper of record said the revenue was “all for things that, aside from perhaps a few hours of work by an artist and a programmer, cost nothing to produce.” Would they have said the same thing about a bestselling—albeit basic—applet? What is software other than the work of artists and programmers? The more important thing about virtual gifts, though, is what they say about the gift buyers. As Winston Churchill’s Web designer said, “Never before have so many spent so much on so little.” Is this pent up demand for immediacy? Entertainment? Is it a sign that consumers are now ready to embrace micropayments? Regardless, $5 billion is nothing to virtually sneeze at.…

With all of the recent fuss about PCI requirements and how to protect payment cards, many companies have opted to take a far too narrow view of data protection. The PCI rules are absolutely designed to only apply to payment cards. But the same common-sense security guidelines will also dramatically help the security of CRM databases, personnel files, E-mail servers, payroll details and even the full contents of your Web site.

In this week’s Guest Column on the new McAfee security blog, a reader describes a run-in with a nervous customer who had lost a ton of data because he hadn’t been doing a backup. Why? It didn’t include payment data, so he ignored all of the PCI guidelines he was following elsewhere in the system. So what was so important about this non-PCI-oriented data? “It’s the flight maintenance records for our entire fleet of aircraft.”…

The easy path is to be very lenient. Offer access to anyone receiving the E-mail announcing the event. If that person posts the URL and perhaps the password—for that one event—on Facebook, Twitter and LinkedIn accounts, let it happen. So the audience is somewhat diluted. If those others buy stuff while attending the event, what’s the harm? The intent of an invite-only event, however, is to be able to control the attendees, perhaps to reward excellent customers. More likely, though, the invite-only approach is to lure a very lucrative small subset of your audience to a virtual gathering where you can flood those people with highly targeted promotions. Maybe a key supplier wants to pay you for access to that subgroup?Read more...

Many of the Supreme Court justices expressed significant skepticism about whether the current system should be maintained. Questioning one attorney about a financial approach patent, Justice Anthony Kennedy raised a Congressional intent argument. "In your view, clearly those would be patentable: the explanation of how to compile an actuarial table and apply it to risk. It's difficult for me to think that Congress would have wanted to give only one person the capacity to issue insurance." The newest member of the court, Justice Sonia Sotomayor, asked how far process patents could go. "How do we limit it to something that is reasonable? Why not patent the method of speed dating?" Read more...

The problem is only getting worse. First, technology vendors are creating new features and functionality much faster than they are retiring them. As a result, the catalog of things that most IT people need to know is constantly growing. Second, as technology advances and becomes more complex, so do the explanations behind it. But Michaud offers suggestions, including IT telling business units answers to the questions they don't know to ask. Read more...

The new portable POS units being introduced by Apple in its retail stores will accept cash by wirelessly popping open money drawers sprinkled throughout the establishment, according to Apple Insider, which has several wonderful close-up shots of the new devices. The units will allow Apple to (finally) toss out the window the embarrassing Windows CE-based portable POS units it has used since at least 2005 in its otherwise Apple-to-the-core stores.

The units combine iPod touch features with a magnetic stripe reader, advanced barcode scanner and Apple-written software to speed plastic and cash transactions. The portable units “consist of a hard plastic, two-piece slip-on shell with a grip texture. The magstripe reader is tucked onto the back of the shell, and the barcode scanner is installed within the top of the device. Hidden inside the shell is a rechargeable battery to power the card reader and scanner. A set of four tiny lights on the back indicate the unit’s state of battery charge,” the report said.…

Basking in the instant efficiency of E-mail and other forms of digital communication, we tech-savvy types often look down our noses at “snailmail.” But E-mail can’t deliver a pair of shoes. And, as an ongoing mail strike in the U.K. is reminding us, even the most Web-proficient retailers stand to suffer when wrenches are thrown into the easily-taken-for-granted cogs of the good old postal services. The strike by the Royal Mail union, whose members deliver letters and packages throughout the U.K., began October 22 and it has E-Commerce operators wringing their hands as the holiday shipping frenzy is about to begin.

The nail biting began even before the strike began. A survey by Interactive Retail in Media Group reportedly found that 85 percent of E-tailers believed even the threat of a postal strike would discourage their customers from placing holiday orders. At least one retailer, TJX, decided to be proactive. On its U.K.-only E-Commerce site, TKMaxx.com, the $19 billion seller of off-price clothes had this to say: “Postal strike? Phah! For the same price as our Royal Mail standard delivery, TK Maxx is upgrading this service to our DHL courier partner for the duration of the postal dispute.”…

That was bizarre. But when Heartland issued a statement that directly—almost word for word—contradicted its own legal filings, the situation took an Alice In Wonderland twist that makes retail tech worth covering.Read more...

In our ongoing saga of retail security “reality versus perception” discussions (Note: Always bet on perception. Reality is a nice guy who, in all fairness, is a loser), the question of whether data breaches are becoming less common keeps cropping up. The answer is straightforward: No, of course they’re not becoming less common. But the explanation is more complicated, mostly involving the subtle distinction between the number of “data breach reports” declining and the number of actual data breaches declining.

And a lot of the issues involve retailers getting better at not reporting breaches along with cyberthieves getting better at hiding their tracks. To paraphrase an old movie title, what if we held a massive data breach but nobody ever discovered it? Would it statistically not count? We explore these issues in this week’s Guest Column on the new McAfee security blog. …

In theory, this will reveal if that retailer is charging way too much. It's an option that E-tailers love; they see themselves making lots of sales off of greedy physical stores, especially because the sites typically have lower overhead expenses and, as a result, can sometimes charge a lot less. But that's the opposite of what seems to be happening. Read more...

It also allows consumers to have different addresses (home, work, the in-law residence where the holidays will be spent, etc.) associated with different phrases and potentially different payment methods (the corporate credit card for office deliveries, a personal card for home, etc.). But Amazon's vision for PayPhrase goes beyond online; it includes mobile and, especially, in-store options, said Matt Williams, the general manager for Amazon PayPhrase. "We want [PayPhrase] to be used anywhere they want to pay, anywhere a customer happens to be," Williams said.Read more...

For time immemorial, or at least for a decade, E-tailers have been using everything from alchemy to algorithms to try and master search engine optimization (SEO). The oft-elusive goal: to have the almighty Google find their sites and place them high on prospective spenders’ search results pages. Now, as blogger Paul Gillen perfectly points out, the Don’t Be Evil Gods have changed the rules. With its experimental new program, called Social Search, Google is including–high on the precious first page of the results it fetches–items culled from the searcher’s social network sphere.

Say John wants to buy a Gateway computer and does the regular Google search for the model he likes. With the new Google program, a Facebook rant by John’s trusted college buddy Joe about how, say, Best Buy weaseled its way out of matching a competitor’s price for a Gateway might show up right next to an expensively SEO-fertilized Best Buy listing. Granted, the Google Social Search listings appear at the bottom of the first page, but there are retailers and vendors that would kill for that chunk of real estate. …

Forrester Research, predicting an 8 percent increase in online retail sales this holiday season compared with the recession-devastated so-called holiday season of 2008, says E-Commerce sites should brace for traffic surges. The reason? Their offline counterparts will be frustrating shoppers with product unavailability because of cautionary inventory reductions. In its “Online Holiday Retail Forecast,” Forrester said E-Commerce players “internalized lessons from last year’s holiday season” and are “focusing on margins as opposed to chasing sales” this time around. These new strategies will include maintaining leaner inventories as a means of more closely aligning purchasing to demand “to prevent last year’s unbridled discounting.”

But online sellers must be ready to deliver when consumers encounter empty shelves at local stores where managers, burned badly last year, failed to order enough stock for this year. The researchers found that E-Commerce sites are cranking up “engagement strategies” to slow shopping cart abandonment, will send alerts about new products or stock levels, and will offer early access to new products or promotions. Forrester paints a more conservative picture than the double-digit holiday forecast recently offered (for itself) by Amazon.com. But we figure Forrester’s 8 percent figure is reasonable for the online retail industry as a whole.…

Wal-Mart's statement confirming the incident was vague—even by Wal-Mart standards—and Walmart.com spokesperson Ravi Jariwala declined to elaborate, saying "At this point, we’ve shared all the information we have to offer." Unknown details include when the glitch started, when it stopped, the nature of the problem and how many people were impacted.Read more...

Using RFID to coordinate sales floor promotional displays with ad campaigns has yielded a 54 percent increase in sales at Germany’s $68 billion Metro Group. The sales increase figure was one of several pro-RFID numbers mentioned in an October 27 speech by Metro’s IT office chief, Gerd Wolfram, according to RFID Journal.

Wolfram reportedly said Metro, the world’s fifth largest retailer, found that using RFID-tagged pallets for inventory tracking brought a “significant reduction of shipping mistakes and resulting compensation claims,” in addition to a 15 percent cut in truck unload time and halving the time it takes to verify proper item delivery. Metro, using products from Checkpoint, is about to experiment with using item-level RFID tags as the sole method of theft deterrence in stores. …

But that's in the U.S. Things are different in India, where a new law gives the government the clout to actually block access to Web sites if doing so would help ensure public order. Whether an inability to shop online can be defined as a form of public disorder is questionable, but there's no doubt an Internet crippled by bandwidth-hogging flu sufferers could wreak havoc with E-Commerce and dent the economy.Read more...

Somehow, the system has evolved in a way that primarily protects the banks at the expense of retailers and, ultimately, customers. From a purely technological perspective, credit card transactions should cost a fraction of what they actually do. Read more...

Amazon on Thursday (Oct. 29) introduced Amazon PayPhrase, the first real acceleration of E-Commerce checkout in years, ever since one-click. But PayPhrase does one-click one better. Once set up, it allows shoppers to choose their own short phrase, which is then coupled with a password. After that, PayPhrase allows for purchases right from the product page. Amazon is pushing the very small group of retailers that have agreed to use Checkout By Amazon—including DKNY, Jockey, Patagonia, Buy.com, J&R Electronics and Car Toys—but the beauty of the rollout is that it fundamentally accelerates Amazon direct purchases by removing several key steps.

“Amazon.com customers can use their PayPhrase for express checkout wherever they see the PayPhrase button: on sites across the Web and on Amazon.com. Customers on Amazon.com simply find the item they want, type their PayPhrase into the PayPhrase button on the product’s page and click to instantly preview the total cost of their order, including shipping and tax,” said an Amazon statement. “No need to ‘Add to cart,’ ‘Proceed to checkout,’ sign in or type in credit card information. If the customer is satisfied with their order, they enter their PIN to complete the order.”…

You'll note, however, that no one is announcing deployments by major retailers or releasing detailed trial results showing that any of this stuff actually works. Vendor alliances are easy because no one has to show or do anything for them. That said, these partnerships--featuring Voltage, Heartland, Hypercom, Chase Paymentech, VeriFone and Semtek--are a start.Read more...

Back in the fall of 2002, $5.3 billion software firm Avaya purchased a brand new human resources database and payroll system. At the same time, it hired a new senior systems analyst. That analyst quickly reconsidered his decision and withdrew his acceptance of the position. Due to a problem with the database transition, the HR database removed him but the payroll system—with its new integrated direct deposit system—didn’t. Yep, payroll kept depositing checks into his account for years, giving the non-employee almost a half-million dollars.

New Jersey prosecutors have charged the almost-employee, Anthony Armatys, with theft, and he faces as many as six years in prison. Given that the checks kept getting deposited for more than four years (from October 2002 through February 2007) makes one wonder how long they would have continued had the systems analyst, according to the prosecutors, not chosen to push his luck. The Somerset County Prosecutor’s Office said that Armatys called Fidelity Investments, said he was an employee of Avaya and asked to transfer funds from his retirement savings account to his personal account. The irony is Avaya’s tagline: “Avaya delivers Intelligent Communications solutions that help companies transform their businesses to achieve marketplace advantage.” Wonder if that always includes payroll systems that don’t stop paying employees when HR deletes them or if that’s just a homegrown extra?…

This week, Mattel--the $6 billion toy maker with brands including Hot Wheels, Matchbox, Barbie, American Girl, Fisher-Price and Tyco--joined those ranks and accepted channel conflict as it started selling directly through its Web site and social networking sites. The latest move will unveil a major Facebook presence for Mattel on Friday (Oct. 30). Read more...

The new ruling comes from a federal judge in San Francisco, who rejected the class-action settlement proposal for TD Ameritrade on the grounds that it didn't help the consumer victims sufficiently.

In both cases, the judges reversed positions they'd previously taken.Read more...