Evan Schuman's StorefrontBacktalk

Amazon planned to have a California company with which it partnered, New Vine Logistics (NVL), handle the complex order-fulfillment hassles and legalities. That didn't quite work out as NVL, citing a "financial crisis," went out of business in July. Although Inertia Beverage Group subsequently purchased NVL, some have argued that NVL's problems played a part in Amazon's retreat from wine. This is not the first time Amazon has tried selling wine and been sidetracked by bad economic conditions. Back in 2000, Amazon bought almost half of WineShopper for $30 million. But the dot-com implosion that summer wound its way to the wine seller and brought stock prices into the cellar, too. WineShopper merged with another crushed grape E-tailer, Wine.com, and the combined company went bankrupt and was sold in 2001Read more...

We’re heartbroken to have to report to our readers that our esteemed PCI Columnist, David Taylor, passed away on Tuesday from a sudden heart attack. A private memorial service is being held in New York and Dave’s family is asking for donations to the American Heart Association.

Dave spent much of his time running the PCI Knowledge Base, which he launched after a distinguished career as a Gartner analyst. I personally had the pleasure of working with Dave on many projects, panels and podcasts and found his keen observations and sense of humor to be most rare. He called his shots honestly but went out of his way to be kind. Dave’s column was an instant hit with subscribers, as it gave him a forum for his observations and for his wry take on life. We’ll miss him without limit and the industry has lost one of its brightest voices.…

In the world of green retail strategy, CVS' non-traditional approach may prove quite wise. Its strategy is that the chain needs consumers to support and participate in the program, and truly accomplishing that goal means customers must, if you will, have some organic biodegradable skin in the game. "What we've learned is that getting customers to mentally buy into the program is critical," said Melissa Studzinski, the director of relationship marketing for CVS. By making customers pay almost a buck for each tag, "you're forcing them to understand and to opt into a behavior."Read more...

There is no shortage of advice on ways to try and prevent a data breach. But if it happens to you, do you have a plan of precisely what to do after the fact? Very few retailers do. Lots of complicating factors exist, such as the probability that the breach will be discovered many months after it ended, plus the fact that the bad guys will almost certainly have radically altered the logs. But the essential issue is that you have an urgent need to do several things immediately.

First, you have two competing Number One priorities: Stop the current attack (if it’s still going on) and prevent a new one; and keep systems fully functional so that sales are in no way impacted. Those two priorities don’t play well with each other, and that’s what we’re exploring in our Guest Column this week on the new McAfee security blog. Conflicts aside, there is a logical sequence of events that retailers need to follow the instant a breach is discovered. …

Efforts by eBay in the Mobile Commerce arena seem to illustrate a conundrum facing other retailers with M-Commerce yearnings: Should they focus their efforts (and money) on catering to the Apple iPhone or on mobile sites that can handle all mobile devices? Of course, many retailers are doing both. But recent comments from eBay CEO John Donahoe indicate that, when it comes to mobile, the iPhone is the apple of eBay’s corporate eye.

During eBay’s third-quarter earnings presentation, Donahoe said little about M.ebay.com, the company’s mobile Web site, choosing instead to focus on eBay’s app for the iPhone. Donahoe said the app has been downloaded more than 4 million times and is expected to generate more than $500 million in sales over eBay this year. “And consumers can more easily use PayPal for their purchases on the iPhone than ever before,” he noted. “We’re rapidly iterating in mobile and will soon be introducing the next version of our eBay iPhone app with improved functionality and features.” Looks like when it comes to M-Commerce buzz, there’s the iPhone and then there’s everything else.…

Then there are negotiations. “You need to sharpen your pencil, I’m not paying this much.” Good IT leaders will work hard to deliver services at the lowest possible cost. But they need to be careful not to negotiate such a low price that the vendor will never be able to meet their expectations for service. Believe it or not, getting the lowest price is not always the right goal. By the way, if anyone is looking for someone to help negotiate a cheap, crappy IT service, Michaud knows plenty of people who would rock your world.Read more...

Online shoppers in the European Union (EU) often find better prices from retailers across national borders but find themselves unable to place orders, according to the European Commission. “On average, 61 percent of orders placed online in another EU country failed, mainly because the trader refused to serve the consumer’s country of residence or did not offer adequate means of cross-border payment,” said the commission on October 22.

Hoping to boost “borderless” E-Commerce in the EU, the commission wants online retailers to adopt domain names ending in .eu (the top-level domain for Europe) and to “create multi-country or pan-EU” commerce sites. The Brussels-based commission said E-Commerce sites with .eu domain names would help eliminate cross-border trade resistance that happens, in part, because of “national perceptions based on country domain names.” The commission has also vowed to better protect consumer data and said it will fight harder against counterfeit products.…

Somehow, this report just doesn’t add up. The premise comes down to the fact that a sharply increased bandwidth load will disrupt sites. That makes sense, but the argument that homebound workers and students will cause that sharp increase in bandwidth is where this argument falls apart. Read more...

A Boston geolocation vendor argues that different phone brands absolutely are linked to very different purchasing patterns and preferences. For example: "BlackBerry users are more likely to compare gas prices online than other smartphone owners. Users of iPhones, meanwhile, are eight times more likely to search for Starbucks locations than users of other smartphones."Read more...

For all the naysayers predicting an even weaker holiday shopping season this year compared with last year, Amazon.com has a snow-sprinkled Bronx Cheer for them. The giant E-tailer announced earnings Thursday (Oct. 22) showing a 69 percent increase in third-quarter profit on a 28 percent increase in quarterly net sales, which soared from $4.26 billion to $5.45 billion.

Even more interesting is its fourth-quarter holiday predictions. Rather than predicting revenue decreases, Amazon issued guidance that predicts sharp double-digit increases: “Net sales are expected to be between $8.125 billion and $9.125 billion, or to grow between 21 percent and 36 percent compared with fourth quarter 2008.” Either way, if you’re planning on scaling back your server farm because you’ve been led to expect a drop in holiday traffic, you might want to reconsider. …

But one retail data breach victim this month took the opposite approach. The Colorado liquor store had its payment records stolen via the Internet. The breach impacted dozens of banks and an untold number of consumers (police were quoted in one local newspaper as saying the breach impacted "thousands" of customers). Once its breach was discovered on October 5, the Cheers Liquor Mart (which bills itself as the largest liquor store in southern Colorado) went back in technological time. It completely cut off its card processing system from its POS and brought out from storage its old dial-up mechanism for connecting to the processor. The delay customers experienced was not noticeable, and the security—when compared with the breached modern system—was ironclad.Read more...

As M-Commerce and mobile payment become must-have technologies, chains are just now seriously exploring various strategies. What role will—should?—interchange play in the mobile playground of, say, 2012? Carriers and handset manufacturers are going to demand a role, and banks may squeeze out the card brands. But is that truly desirable for the retailer?

And where does data in a mobile transaction get stored? Security and convenience always fight each other, but never more so than in a mobile environment. We explore those issues in the latest in a series of StorefrontBacktalk GuestView columns that will appear on a new blog launched by security vendor McAfee. The second of our columns posted Wednesday (Oct. 21).…

What often happens is a sort of gridlock, where a project stalls under its own weight. Typically, the debate divides over party lines. Conservatives (those who believe that IT is simply a cost-suck) and Progressives (those who believe that IT drives business value) generally are split over the “smallest/cheapest/simplest technology” and the “ring every possible ounce of value out of it” divide.Read more...

This approach isn't much of a technological innovation. All the vendor is doing is adding a script that leverages the data the brands have been offering for years. But it's a script that no one else has yet bothered to create. That said, given the number of retailers that never chose to use the original services, it's unclear how many will jump at this new feature.Read more...

Sure, social networking is a huge retail trend, but retail IT? "You don’t need IT to Tweet, but you sure will be buying an awful lot of software in 2011 that will analyze all this unstructured information," Roster said. "Now imagine a year down the road when I can go into a retailer and start tagging my likes and dislikes on any given product. It is just mind-boggling how rapidly software will be evolving within the next 5 years."Read more...

The well-publicized incident saw legions of T-Mobile Sidekick customers lose contacts, calendar entries, to-do lists and photos when a Microsoft subsidiary named Danger (nope, won't go there. Far too easy) suffered a glitch. Or as Roz Ho, the Microsoft corporate VP for premium mobile experiences, said in a statement: "We have determined that the outage was caused by a system failure that created data loss in the core database and the back-up." (You think?) Apple, Palm and others offer centralized backup for their mobile devices, too. But the data also stays on the device and, cleverly, backs up routinely to a customer-controlled device (typically a desktop machine). When thinking about the totality of data such devices collectively house, that very fragmented approach most likely preserves the overwhelming majority of the data. And if a customer's laptop fries, the mobile phone manufacturer or carrier is unlikely to be blamed.Read more...

"Our E-Commerce business processed through Digital River accounted for $650 million, or 36 percent of our consumer revenue in fiscal 2009. As compensation for their work, we paid Digital River approximately $95 million. These fees were classified as contra revenue. Thus, as a result of taking this E-Commerce business in-house, you’ll see our consumer revenue increase, driven by the elimination of this contra revenue," Symantec CFO James Beer said. "Conversely, the cost of running our own E-Commerce platform will be classified primarily in operating expenses with some amounts flowing through cost of goods sold. Therefore, operating expenses and cost of goods sold will both rise year-over-year." It gets even better.Read more...

Schwarzenegger's veto (which allegedly prompted the bill to look at the governor and bellow, "I'll be back") is not the first time he's tackled data breach legislation; he has already forced earlier versions to be diluted. The new bill, SB-20, would have required retailers to provide more details about a breach, including the type of personal information exposed, a description of the incident and exactly when it took place. It also required merchants to submit a copy of the notification letter to the California Attorney General’s office if more than 500 California residents are affected in a single incident.Read more...

Operations at Air New Zealand came to a halt for about four hours Sunday, October 11 when an IBM data center suffered a power failure and a back-up generator failed to kick-in because of a faulty oil-pressure sensor. But the intriguing part was the response by airline CEO Rob Fyfe, who in an E-mail to IBM seemed to show that he suffers from a pressure control glitch of his own. "In my 30-year working career, I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologize to its client and its client's customers," the E-mail said. Read more...

This month, though, Amazon is learning through two unrelated initiatives that pushing the envelope can deliver one heck of a paper cut. The first is a feature designed to be very consumer-friendly, one that flags when a product is being sold for more than list price. The other is a global Internet effort tied into the non-U.S. rollout of Amazon’s Kindle e-book reader. Both initiatives seem to stem from a retail chain that intuitively understands technology and what can be done with it, without necessarily thinking through how the new elements will ultimately impact consumers and partners.Read more...

Although the new iPhone app will accurately point shoppers to the aisles and shelves housing their desired products, Lansley acknowledged that the wireless signal at some stores is too weak to work with iPhones turned on while customers are deep within the depths of Tesco's larger establishments.Read more...

One site monitoring company this week reported that the 1-800-Flowers.com E-Commerce site was down for a whopping 65 hours and 26 minutes. The flower company didn't respond to our inquiries, but a fairly perplexed representative of the monitoring firm did. "To be honest, this is one of those rare cases where I’m not entirely sure if this is legitimate downtime, that is, downtime that regular human Web site visitors would notice," he said.Read more...

E-Commerce site operators have enough to worry about without fearing the sudden disappearance of the Internet. But that’s what confronted site operators in Sweden on Monday (Oct. 12). During routine maintenance of that nation’s top-level domain, “.se,” a tiny mistake caused the whole Swedish Internet to go dark. As documented by Sweden-based Web site monitoring service Pingdom, a script failed to include at its end a “trailing dot,” essentially a period. “That trailing dot is necessary in the settings for DNS to understand that “.se” is the top-level domain,” Pingdom noted. “It is a seemingly small detail, but without it, the whole DNS lookup chain broke down.”

The outage affected about 900,000 sites. Although the mistake was corrected within an hour, other factors kept many .se sites and E-mail addresses offline for almost a full day. “Imagine the same thing happening to the .com domain, which has over 80 million domain names,” Pingdom suggested. “Although not all of these are actually in use by Web sites or for E-Mail, the effects would still be huge and cause an unprecedented amount of downtime across the entire Internet.”…

These new details of Wal-Mart's data breach—which saw POS source code grabbed and zapped to parties unknown in Eastern Europe—are shedding more light on the early days of such retail assaults and how various chains learned of and then dealt with them. But here’s the rub: Wal-Mart maintains that no customer or employee data was taken. Does it truly stand to reason that those thieves would have had secret access to the systems from the world's largest retailer for 17 months and not taken any names or card data? Oddly enough, it seems likely that they, in fact, didn't. And therein lies the potentially most intriguing part of the story.Read more...

But the changes were mostly fueled by strong retail lobbying efforts. Beyond the convenience retailers that NACS represents, several of the nation's largest chains—including at least one major department store—were threatening to abruptly cut off PIN debit at the deadline, possibly switching to signature debit to temporarily sidestep the issue. The tactic is not dissimilar from what Best Buy did this summer when it threatened Visa over contactless payment debit charges.Read more...