Evan Schuman's StorefrontBacktalk

A jury in Delaware Tuesday (Aug. 18) concluded that mega e-tailer Amazon didn’t infringe two online-shopping patents and found that a third had been invalid. The case involved a company called Cordance suing Amazon for patent infringement. Cordance argued that they had described the one-click method back in 1993, some four years before Amazon launched its version.

” After 14 hours of deliberations, following a 10-day trial, the federal jury of four men and four women in Wilmington, Delaware, today rejected Cordance’s claims that Amazon infringed the patents. Cordance sought more than $84 million in damages,” said a Bloomberg report. “During the trial, Amazon lawyer Lynn H. Pasahow told jurors that one of the patents wasn’t infringed because Amazon uses one-click ordering, while the patent is for a system involving two clicks.”…

But the indictment revealed several key contradictions with 7-Eleven and Heartland and one major retailer's security executive found the government's specifics to be a convincing indictment against PCI.Read more...

Now MasterCard is taking what can only be called a “get tough” policy, issuing larger fines and, most significantly, forcing both Level 1 and Level 2 merchants to use assessors rather than take on the task of self-assessment. But still, opines PCI Columnist David Taylor, merchants, banks, processors and service providers aren’t happy with MasterCard. They just can’t seem to get a break. After numerous conversations with companies on the receiving end of MasterCard’s “get tough” efforts, Taylor thinks it's all a difference of philosophy.Read more...

Retailers tend to get so caught up in their global rollout plans and product strategy that they often forget to look at things from the store owner's perspective. That phrase is what many franchisees hear when talking to their chain hierarchy about all the great things that the brand wants to do with detailed data from the store. “By analyzing the data that we collect from these various sources, we will be able drive sales far more effectively.” But, similar to other grand plans they have been sold in the past, franchisees are skeptical that that yellow brick road is so easy to follow.Read more...

With social networking becoming a critical tool in the E-Commerce director arsenal—whether that’s Facebook, MySpace, YouTube or Twitter—the power of a tiny piece of programming called a URL shortener is something that retailers would rather not leave to chance. Given how easily the tools can be used to secretly ship a customer to an unintended Web address, security is a factor, too.

With this in mind, Web site uptime firm Pingdom tested them against each other. For speed, the fastest to the slowest were ls.gd, Bit.ly, Ow.ly, Su.pr, TinyURL, Twurl, Tr.im, Cli.gs and the slowest—by a decent margin—was Snipurl. But the report also looked at reliability: “Perhaps even more important than how fast these services are (many would argue a few hundred milliseconds in load time won’t make a huge difference) is how reliable they are. Once a short URL has been created, how much can you trust that it will work and keep redirecting to your target site?” The reliable ranking, from most to least, was Ow.ly (the only tested service that suffered zero downtime), Bit.ly, Su.pr, TinyURL, ls.gd, Snipurl, Cli.gs, Twurl and Tr.im.…

The idea is for shoppers to phone the service and then speak the product name and the automated voice system will say the exact location of that product. If it works, the system's creators envision successor systems that will turn that consumer phone number into an impromptu CRM customer-identifier. Baalmann, who will try the system at a store in Desperes, MO (right outside St. Louis) starting Tuesday (Aug. 18), already has people ready to call manufacturers this week to sell them the ability to send text codes to customers who ask about certain product categories.Read more...

For matters of credibility, we overwhelmingly avoid reporting on studies that are actually vendor marketing departments pushing studies whose results were likely determined before the first question was asked. This gets us into a thorny editorial debate. If the idea or results are valid, should the source matter? The answer is that it probably shouldn't, as long as the methodology seems valid and fair. The premise of the report—which is that retailers should use the data they have to push for more sales—is a valid one, but we just wish the messenger didn't have such an obvious incentive to come to that conclusion.Read more...

Many of the wording changes are subtle. For example, the revised document says the standards apply to persons "who own or license personal information about a resident" of Massachusetts. The prior version of the sentence said the regs apply to those who "own, license, store or maintain" the personal information.Read more...

In so many ways, Australia is arguably the nation that most closely mirrors the U.S. retail scene, much more than the U.K. and even more than does Canada. For that reason, the latest social networking trends from Australia are especially intriguing, as they show that more than 70 percent of Internet users in Australia visited a social networking site in June. To put that into context, that figure last June was 29 percent, according to ComScore. The study also concluded that social networking users accounted for 90 percent of the audience for all of Australia’s top Internet properties.

The study limited its visitor base to those older than 14 years and included visits from both home and work, but—for reasons not explained in the report—it excluded visits “from public computers such as Internet cafes” and libraries and it also—oddly enough—excluded visits from mobile phones/PDAs. That last exclusion is enough to raise some serious questions about meaningfulness, especially for Twitter activity, which reported an intense 6,122 percent increase. The report saw Facebook on top, enjoying an impressive 95 percent year-to-year boost, while MySpace came in a distant second, with a mere 5 percent comparable growth. All of the social sites examined had increases, other than Windows Live Profile (which hadn’t been seen the prior year) and Bebo, which dropped 9 percent. After Facebook and MySpace, the next in order from the June rankings were Windows Live Profile, Bebo, Twitter, Deviantart (+95 percent), Digg (+50 percent), Tagged (+93 percent), Buzznet (+52 percent) and Orkut (+607 percent).…

At the end of last month, Best Buy had a POS price glitch for the Palm Pre and chose to let those who made the inadvertently good deals keep them. When an even more severe price glitch happened this month, the chain was less generous.

On Wednesday (Aug. 12), a Web glitch had a $3,400 52-inch flat-screen television selling for $9.99 and the online system sold quite a few. This time, though, Best Buy corrected the price and said that it would not honor those orders, instead opting to cancel them and refund the money. The details on how such an error wasn’t detected before sales were processed were not–amazingly–released.…

At a practical level, there were various specific capabilities that Target wanted to add that Amazon either couldn't deliver (unlikely) or wouldn't deliver (more likely) or (most likely) that Amazon could deliver but at an unacceptable price. Target spokesperson Kelly Basgen said areas that Target wanted to improve once the Amazon divorce is final in August 2011 were search, checkout, cart features, better branding control and differentiated experiences within different categories. She gave an example—while stressing that it was only a hypothetical example—that Target might want a consumer's experience within apparel pages to be very different than within home goods.Read more...

But the more important question raised in the report is whether those merchants have an unrealistic sense of how vulnerable they are to data breaches. The problem is that the report didn't sufficiently track who said what, making it impossible to determine whether any one merchant's appraisal was legitimate or not.Read more...

Instead, the U.S. M-Commerce space is floundering as merchants drag their feet deploying purchase-capable mobile sites or find their mobile initiatives stalled by an avalanche of obstacles beyond the anticipated mountain of incompatible platforms and mobile browsers. The problems encountered are legion. They include a vacuum of standardization for everything from design, programming, payment processing and even URL naming to fears about carrier conflicts over the types of permitted content and a Catch-22 business strategy about how much, and when, they should embrace M-Commerce.Read more...

In an attempt to bring some sanity to the Mobile Web mess, the World Wide Web Consortium (W3C), in 2005, formed a Mobile Web Best Practices Working Group. In 2008, the group released a Mobile Web Best Practices guide that lists 60 recommendations. Apparently, there isn't even standardization among those hoping to create standards and even M-Commerce experts aren't all abreast of the situation. For example, Impact Mobile CEO and President Barry Schwartz said he was unaware of the W3C effort but noted the Mobile Marketing Association (MMA) was busy crafting its own M-Commerce site design guidelines. Read more...

Going through the ritual of filling out shipping and payment forms on a regular E-Commerce site is annoying enough, but being forced to do that same dance on a mobile device can be downright cruel. But a true M-Commerce site must allow visitors to not only find products with their mobile devices but to also buy them. That forces retailers to choose from among four not-especially-attractive checkout options.Read more...

That's because data security may be a high priority in the abstract, but compared to “keeping the business running” types of concerns, it typically drops off the bottom of the list of things to spend money on. Why? Because small businesses do not believe they are going to have a data breach.Read more...

This begs the question: How does an IT department successfully deliver retail technology that meets the needs of both a franchisor and the chain? Both sides need to change the way they think about large-scale IT projects. StorefrontBacktalk's new Franchise IT Columnist Todd Michaud contends that this is a lesson that shouldn't be ignored by non-franchise chains, too, as today's reality of Web-enabled, mobile-fueled, social-network-infested high-turnover low-margin is forcing everyone to play by very different rules or to die not trying.Read more...

Payment processors seem to be all marching to the same end-to-end encryption tune, although each is arguing that its version is different. Following Heartland’s announcement of an end-to-end encryption effort for its customers by the end of the year, EPX and RBS separately this week announced their own versions.

EPX on Monday (Aug. 10) offered up a version that tries to meld encryption and tokenization (“We’re disputing that encryption is the safest way to go,” said EPX COO Matt Ornce. “The sooner you can get it tokenized, the better”) while RBX on Tuesday (Aug. 11) announced that it would be using VeriFone’s VeriShield Protect as its end-to-end for encrypting payment card data. …

A year into the job as Home Depot’s VP for specialty channels, Michael Cooper said that his chain is just starting to realize how mammoth a true E-Commerce rollout is and that it’s a price it’s willing to pay. “We’re going to come into the ‘90s, allow returns in the stores, and allow store gift cards to be used as tender online,” Cooper was quoted as saying in this wonderful story from Multichannel Merchant. “It will require modification of 15 legacy systems and that goes all the way down to the store’s POS systems. But the more we can convince the powers that be that the multichannel shopper is more valuable than the store shopper, the easier it will be to get the job done.”

Cooper also said that Home Depot CEO Frank Blake candidly concedes E-Commerce errors. Blake “says that if there’s anything we screwed up in 2007, it’s our e-commerce channel. He says that, 10 years from now, experts are going to look back and hope we figured out how to fix it. That gives me a clear understanding that he knows the importance of the channel.”…

"The noncompliance assessment structure now contains escalating assessments per violation within a calendar year," said the document sent to members earlier this summer. "Maximum assessments for initial noncompliance for Level 2 and Level 3 merchants have increased to $25,000 and $10,000, respectively. Furthermore, the $500,000 annual aggregate maximum for acquirer noncompliance assessments related to program noncompliance has been discontinued."Read more...

Heartland Payment Systems on Tuesday (Aug. 4) said it spent $32 million this year paying for costs related to the major data breach it disclosed in January, including $22.1 million to cover fines from key payment card brands and a settlement offer. Heartland did not say how the $22.1 million was split between the fines and the settlement offer, but it did provide clues.

For example, the breach costs of just the second quarter came to $19.4 million and it said that the “majority” of those costs was for the settlement offer, suggesting that the settlement was more than $9.7 million. Legal fees make that precise calculation tricky as well as the lack of a percentage of that majority. “The remainder of the expenses and accruals related to the Processing System Intrusion recorded in the three and six months ended June 30, 2009 were primarily for legal fees and costs the Company incurred for investigations, remedial actions and crisis management services,” Heartland said.…

Linda Dillman, who was the retail IT universe’s most powerful executive for years as the Wal-Mart CIO, went relatively quiet in 2006 when she was removed as CIO and given the title of EVP for benefits and risk management at the world’s largest retail chain. Dillman resurfaced Wednesday (Aug. 5) when she left the $401 Billion Wal-Mart executive VP gig to take a Senior VP role with the $118.4 billion Hewlett-Packard.

The former Wal-Mart CIO will report into Randy Mott, the HP CIO. It’s unusual for a retail IT exec to join a vendor and not take a title promotion, especially when the vendor is smaller than the retailer. Then again, when you work at Wal-Mart, every company is a smaller company. And Palo Alto has a few advantages that Arkansas can’t match (but cost of living isn’t one of them). Besides, Mott himself had performed a similar dance, leaving Wal-Mart, where he had served as CIO, to join Dell and then HP. …

At the end of July, Network Solutions revealed a massive breach, impacting some 574,000 consumers and more than 4,300 retailers. So to their marketing department, what a better time to proclaim a new commitment to quality?

In a note sent July 29—just days after the breach was disclosed—the marketing team was positively ecstatic: “On or around August 1, 2009, much of the hard work we’ve been doing to improve your overall Network Solutions experience will be on full display.” Probably a bit more candid than anticipated. An equally good line from the letter: “We‘ve received an overwhelming amount of valuable feedback which is driving a reinvention of our company.” That has got to be the world’s best marketing phrasing to describe an angry mob.…

But there’s more to the challenge than semantics, argues PCI Columnist David Taylor. A lot more.Read more...

But worst of all, from Lawhorn's perspective, the display told passersby that the order confirmation board (OCB) was quite completely connected to the store's LAN and POS, which is enough to tell someone that it's worth trying to hack into. And with a relatively unprotected network connection plugged into the behind-the-store box, that's not an especially daunting task.Read more...