Evan Schuman's StorefrontBacktalk

Franchisee Columnist Todd Michaud can’t tell you how many times he had heard some version of this over the years. On the surface, this seems like a pretty straightforward argument . But with most things in life, it’s not quite that simple. I also have franchisees who pepper me with questions like: “Why is the system so expensive? Why can’t I have a single phone number to call for all of my problems? Why are these upgrades so expensive and why on earth do they take so long to complete? Why can’t I get access to better data faster? Who is holding this vendor accountable?” Not always, but sometimes, the answers to these questions are found by limiting the franchisees choices.Read more...

About three years ago, new IT strategy at Macy’s pushed the number of servers they needed to manage from five to 60 and that forced IT to explore outsourcing and they chose a San Francisco company called Splunk, according to a Wall Street Journal story than ran Tuesday (Sept. 8). The story quoted Ratnakar Lavu, Macy’s group vice president of technology, as saying the service was used to identify a Web problem last year involving a feature to help customers find product availability for a specific store.

“To figure out what was behind the glitch, his IT team could have gone through the time-consuming process of checking each server for the flaw. Instead, Mr. Lavu entered in a query to Splunk’s software. Within minutes, the technology scanned the indexed information from all 60 servers and highlighted how there had been a pattern of errors across some servers. In two days, the problem was resolved, says Mr. Lavu,” the story said. “‘It would’ve taken us quite a while without Splunk because it was a very complex problem to solve,’ said Lavu. ‘It’s Google-like and identifies patterns though search.'” He added that he had “some concerns that the technologies won’t be as effective if the amount of data and machines they have to scan keeps growing.” An interesting read.…

This is the latest in a series of high-tech blunders from the 123-year-old $47 billion 3,900-store chain. Is this because of the chain's size or, more likely, because it has been pushing the envelope on what it's trying to do technologically, perhaps beyond its testing limits.Read more...

In March, Western Union cut a deal with Amazon to let the E-Commerce giant's customers use the 44,000 Western Union locations with fees ranging from $3 to $8. Then Bank of America and Citi got into the act with a one-time use card, another tactic to make sure the payment is only used for the immediate purchase price and nothing else. Last Thursday (Sept. 3), eBillMe offered its version, where the payment company is working with MoneyGram—and others—to offer cash-only options at about 75,000 walk-in locations, for a $5 fee. Read more...

Last Wednesday (Sept. 2), TJX struck quite a bargain and settled with the handful of remaining banks. In settling all charges with four different financial institutions—AmeriFirst Bank, HarborOne Credit Union, SELCO Community Credit Union and Trustco Bank—TJX agreed to pay $525,000 to be split between the four businesses. Was that punitive or was that something closer to a nuisance payment for the $19 billion retail chain? Punitive would generally mean covering all legal costs plus reimbursing the banks for all out-of-pocket costs and then paying them something to compensate them for the pain of the litigation. The payment specifically excluded legal fees. According to the statement TJX issued, the settlement didn't even cover all of the banks' out-of-pocket expenses let alone offer anything for their efforts. Oh and it also allowed TJX to say that it "has denied all wrongdoing." The amount enough that it was already covered in a reserve that TJX took back in the second fiscal quarter of 2007.Read more...

When European technology leaders are envisioned, Germany and the U.K. are most likely to come to mind. But a new report suggests that, at least when it comes to E-Commerce, it’s the Parisians and the rest of France that are most comfortable. ComScore reported Monday (Sept. 7) that “26.7 million people in France visited an online retail site in July 2009, an increase of 21 percent (compared with) the previous year, significantly higher than the 5-percent average growth in the retail category across Europe.”

The report is interesting because France is also embracing M-Commerce and particularly the iPhone at an unusually intense rate. (A reader commented on it in a story about M-Commerce.) The problem with any of these stats is that they are percent of increase, which could simply mean that France has been more hesitant to embrace E-Commerce until now. The ComScore study also excluded M-Commerce activity. If France’s M-Commerce activity is indeed picking up, that could be a material exclusion. ComScore offers some rough comparison points between countries, such as “the penetration rate of the online retail category of total online audience,” which it puts at 77 percent for the U.K., 69 percent for Germany and 69 percent for France. But it’s still an interesting report.…

When negotiating—or surrendering to—a service-level agreement guaranteeing uptime levels with a Web hosting service, retailers need to be cautious of how “downtime” is defined. Pingdom is now blogging about more SLA games, including some hosts that exclude any downtime that they consider maintenance. Here at StorefrontBacktalk, if our site is down, it’s of little comfort that it was a planned outage that we never asked about.

Pingdom’s post on Monday (Sept. 7) also spoke of hosts that exclude server downtime and only count network downtime. Again, if the site is unavailable, that’s downtime. Pingdom is a bit more forgiving, though: “To be fair, for dedicated hosting providers, it would be difficult to guarantee anything else when the customer has control over the server.” It also repeated an observation that Pingdom has made before that hosts often ignore smaller outages, even if they have many of them. Of course, for chains, it’s not merely situations of Web hosting. These tricks also apply to services handling mobile sites, customer comments, video reviews, shipping and almost anything else your site needs to outsource, especially for the holidays. Sometimes—and may I be forgiven for saying this—it’s actually good to have the lawyers involved in SLA negotiations.…

But what does any of this have to do with M-Commerce? A lot. If they finally get around all of the technical and logistical hurdles of M-Commerce, they will be trying to get millions of consumers to interact with their sites—via their phones—and see product lists, read reviews, watch multimedia demonstrations, interact with social sites, download PDF instruction manuals and even ask their peers for feedback on their shopping choices before consummating those purchases. That's all great, but—if successful—will it turn the Home Depots, Walmarts and Targets of the world into examples of what may become known as "The AT&T Factor"?Read more...

In the Gonzalez plea bargain, the agreed-to sentencing recommendation—which calls for at least 15 years in prison and "no more than 25 years" in prison—does not seem much more lenient than he would have faced at trial. Even with as extensive a cyber attack as these, most U.S. courts wouldn't go anywhere near "more than 25 years" in cases where no one was physically hurt and the defendant wasn't accused of real violence or threatening violence. But a jury is a tricky animal and, technically, the counts he is pleading guilty to have a cumulative maximum sentence of 193 years in prison. Read more...

"Since the government agents ultimately decide how much to actually take, this will create a powerful incentive for them to seize more rather than less: Why stop at the list of all baseball players when you can seize the entire Tracey Directory? Why just that directory and not the entire hard drive?" the panel asked rhetorically. "Why just this computer and not the one in the next room and the next room after that? Can’t find the computer? Seize the Zip disks under the bed in the room where the computer once might have been. Let’s take everything back to the lab, have a good look around and see what we might stumble upon."Read more...

Blockbuster was the first to glitch, with Pingdom reporting the entertainment site becoming unresponsive at 1:43 PM New York time and staying down for 18 minutes. It was reported back down again at 3:11 PM New York time and it stayed down for 32 minutes. It then was reported down again at 3:57 PM and stayed down for 11 minutes. Read more...

Grocery chains have historically been afraid to reach out to consumers with personalized pitches, fearing the consumers would be put off by what might be seen as a privacy intrusion. But with privacy expectations now much lower, more chains are willing to take the chance. Case in point: the $4.6 billion 1,400-store Big Lots grocery chain will launch its first CRM program in the Fall, the latest in a series of grocery chains slowly embracing official loyalty programs.

The Buzz Club card will offer consumers a discount when they make 10 purchases of more than $20 each, according to this DMNews report. The story quoted Big Lots CEO Steven Fishman as saying: “The program will allow us to learn more about our core customers’ shopping tendencies and opens up micromarketing capabilities we’ve have never had before as a business.” It will be used to create personalized follow-up offers and Fishman said that all of the chain’s “messages going forward will be more aggressive.” …

Look for Gonzalez to officially plead guilty to the federal charges from Boston, primarily involving TJX, BJ's Wholesale Club, Boston Market and Sports Authority and New York, primarily involving Dave & Buster's, on Sept. 11.Read more...

At its simplest, the technique is quite easy to do, which is why it's best to be avoided. The site visitor simply modifies the URL of the page he's visiting. If the stars align, the retailer's server will cache that page, grabbing the rewritten page heading with it. The next consumer that comes along and seeks that page will likely be shown the modified page.Read more...

In the trial—conducted over 13 weeks and published Monday (Aug. 24)—looked at a non-item-level store (the control store) and one item-level store and the same limited product area (denim jeans) were examined for both.Read more...

A 500-store franchise chain, for example, could easily have to indulge more than 50 different POS configurations, given various owner demands. Each location is likely to have it’s own nuances and, in a franchise environment, each store will likely have different needs than the rest. So what do you do when you have 500 locations that each have their own needs? You need to think of the rollout as more like 500 little project plans. Asks Franchisee Columnist Todd Michaud: Now doesn’t that sound like fun?Read more...

If a retailer will invariably be declared non-compliant after a breach, what's the point of doing the assessment right? Turns out, there are quite a few points.Read more...

And yet, if any segment of retail was underutilizing the magic of interactive E-Commerce, it's the glossy side of facial retailing: makeup. Drugstore.com—and one unidentified pharmacy chain, although it's not one of the four largest—are about to try and address that. The retailers will encourage customers to upload photos of themselves and the system will then project what various makeups will look like on their skin, leveraging facial recognition software.Read more...

Among the new names on the list beyond Nealan and Giles were the CIOs from Blockbuster (Keith Morrow, formerly 7-Eleven's CIO, at $1.1 million), Wal-Mart (Rollin Ford at $646,000) and Guess (Michael Relich at $875,000). Read more...

The Missouri law is similar to most other state laws dealing with data breach notifications, but it includes medical and health information, data the states usually don't mention because it is protected by the federal Health Insurance Portability and Accountability Act (HIPAA).Read more...

"The Maine law imposes severe limitations on all Web sites that serve teenagers," said NetChoice in explaining its decision to put the law at the top of the list. "At the very end of its session, the Maine legislature voted to require Web sites to obtain 'verifiable parental consent' before collecting personal information from teens. Lawmakers approved the measure despite the fact that Web sites have no means to confirm such consent, and would be effectively forced to stop providing valuable services like college information, test prep services, and class rings."Read more...

As details trickle out about how the feds supposedly broke the Gonzalez attacks against TJX, Hannaford, Heartland, 7-Eleven and tons of others, much of it focuses on a global effort to access servers and laptops overseas and doing so in countries where U.S. law enforcement cooperation is perhaps not what it should be.

Wired did a wonderful piece, summarizing federal filings in the New York part of the Gonzalez accusations (this is the Dave & Buster’s case). The story details the chase for a laptop in Turkey and the legal and police bumps along the way. Nothing new revealed for retailers trying to protect their networks, but it’s interesting background nonetheless.…

In the world of retail CRM programs, warehouse chains such as Costco, BJ’s and Wal-Mart’s Sam’s Club occupy a very specialized niche: they can boast that their customers use their loyalty cards just about 100 percent of the time, allowing for near-perfect purchase histories for all customers. Of course, requiring that the membership/loyalty card be displayed to get into the store and to make any purchases certainly doesn’t hurt. But it’s equally noteworthy how little those chains have pushed those extraordinary purchase history databases. Sam’s Club has now made such a move, claiming to be the first warehouse club chain to offer automatic paperless coupons. These chains have typically provided deeper-than-normal discounts, but they make it up with membership fees and, much more importantly, volume purchases.

That’s not merely buying huge quantities of products, but packaging the products to force consumers to buy larger quantities at any one time. If the consumer can use 100 bars of soap, they can enjoy that financial benefit. “There are no coupons to clip and no rebate forms to complete and mail,” said a Sam’s Club statement. “Members will receive customized offers tailored to them and discounts will be automatically taken at the register using their existing membership cards.”…

Such a drama is now unfolding with the Albert Gonzalez case, the Miami man accused of breaking into TJX, Hannaford, Heartland, Barnes & Noble, Sports Authority and a laundry list of others. Is Gonzalez the masterhead of a cyber thief ring? Was he coordinating different teams in the U.S., each group assigned to attack different retail chains? Or was he merely the pawn of an Eastern European data theft syndicate? In Dickensian terms, was he more Fagin, the Artful Dodger or even Oliver Twist?Read more...

As we pointed out in a recent package of stories, retailers have been slow to deploy mobile sites that actually support purchases. However, the lure of potential holiday dollars seems to be inciting at least some of those foot-dragging merchants to lean on third-party mobile site developers to quickly create M-Commerce sites.

Representatives of several mobile commerce technology vendors have said they’re suddenly being pressed by retailers to develop mobile sites or applications before December. Folks from Usablenet, Digby and CardinalCommerce told the publication they’re working on rush-job M-Commerce sites or apps for economy-battered retailer clients that want to make sure they offer consumers every possible opportunity to buy something for the holidays. For example, Jason Taylor, vice president of mobile products at Usablenet was quoted as saying the company expects “to launch 10 mobile retail Web sites between September and November” and Digby CEO Dave Sikora said “there’s definitely a push right now to have some kind of mobile presence for the holiday season. There’s a sense of urgency right now to engage with customers in the mobile channel with the thinking that come January they’ll learn from the holidays and create a whole mobile strategy.”…