Evan Schuman's StorefrontBacktalk

We're not talking about pirated goods here, but what's often called the "gray market"—legitimate products that aren't authorized for U.S. sale. Those products are usually priced lower, because they're intended for less-affluent markets than the U.S. Costco (NASDAQ:COST)and Kmart (NASDAQ:SHLD) have sold those types of products in the past and gotten into legal trouble. This week's ruling says they won't have that trouble again. But there are much bigger E-Commerce implications in the court's decision to get rid of those geographical limits.Read more...

"All that is necessary for evil to triumph is for good men to do nothing." So said Sir Edmund Burke. But the phrase could equally apply to merchants, and their failure to adequately and aggressively investigate and prosecute online payment-card fraud. Rather than aggressively going after these carders, most retailers consider such losses a "cost of doing business." Where does that leave the honest shopper? From the shopper's perspective, whose back is Walmart seeming to protect more?Read more...

In fact, Amazon Marketplace now brings in almost 12 percent of Amazon's retail revenues. But it also represents more than 40 percent of the goods sold on Amazon's site, which makes the Marketplace merchants both competition and a huge market-research pool for Amazon—and, potentially, a legal time bomb.Read more...

Part of the reason Neiman Marcus got into trouble here is that it started selling the fake faux fur products less than six months after settling a previous FTC fake faux fur investigation. But the bigger problem may be the fact that physical stores have human beings who can catch some of these labeling problems before they become a federal case. Online stores don't.Read more...

The decision from the U.S. Court of Appeals for the Ninth Circuit also flagged to retailers their Achilles heel in such cases, pointing out that the parents' case fell apart when they didn't allege that the store associates had not acted in good faith. In other words, had there been evidence that the associates acted maliciously, things might have gone very differently for Walmart. The parents certainly wouldn't have had difficulty establishing harm that resulted from the associate's actions.Read more...

Keep in mind that it's barely a year and a half since Target could barely keep its own newly built E-Commerce site running, after a decade of having its E-Commerce operations run by Amazon (NASDAQ:AMZN). That's fresh in the minds of Target E-Commerce execs, so if there's any chain that can see an advantage to becoming a mini-Amazon for cooking websites, it's Target.Read more...

The case against Shahin Abdollahi, a.k.a. Sean Holdt, is that he supposedly used the systems he sold to Subways around the country to fraudulently load value onto giftcards. The indictment then claims that Abdollahi either used the giftcards himself at Subways thousands of miles away or sold them as discounted cards on eBay (NASDAQ:EBAY) and Craigslist. For that added touch of chutzpah, the indictment alleges, Abdollahi and a co-conspirator "sometimes registered [the giftcards] online with Subway" and that was done "to keep track of the fraudulently loaded cards in case of loss or theft." After all that work, you certainly wouldn't want a card to be lost due to carelessness.Read more...

U.S. and Chinese paper mills say they will eventually fill the shortfall from the U.S. exit of Koehler, which has been providing about 40 percent of POS paper. But in the meantime chain execs may be expecting IT to keep stores from running out of paper. Strange as it sounds, it is IT's problem—and the second-easiest option is digital receipts.Read more...

Grocery—and other food selling—chains that are trying to encourage shoppers to use CRM? Nothing makes customers more loyal than saving their lives. (Yes, Bentonville, even more than saving them money. Sheesh.) With a steady stream of news reports touting loyalty records as key tools in finding and then notifying customers about poisons, CRM should become a much easier sell.

The capabilities and lives being saved by CRM is hardly new. Costco (NASDAQ: COST) has championed it for years, and Safeway (NYSE:SWY) has been sued for not using loyalty to protect shoppers’ health. Grocery, QSR and convenience chains often complain about the difficulty of getting shoppers to sign up for—and to routinely use—their loyalty cards. Instead of pushing savings, maybe this is a much more effective and truly altruistic (well, semi) argument to make. On the flip side, to help government food investigators do this magic, a lot of data will have to be shared. When that data is then shared with other government agencies and a customer is surprised by an IRS visit? Law enforcement has been finding nuggets in POS databases for years. Privacy violation or saving customer lives? The joys of retail decisions.…

When LinkedIn premium customers Katie Szpyrka and Khalilah Wright learned that the website operator had been hacked, and that 6.5 million stolen LinkedIn passwords had been posted on the Internet (together with the user's e-mail address), they went to sue LinkedIn for failing to provide adequate security and appropriate encryption for these passwords. Because users frequently use the same passwords for multiple accounts, stealing their LinkedIn passwords and E-mail addresses might expose a host of other accounts to compromise. Read more...

Asked about ways to cut labor costs, Galanti went out of his way to dismiss it, arguing that he's not buying item-level RFID's promises. "Everybody thought that RFID would free up the front end and reduce our biggest labor cost area. That ain't happening." (How can you not like a CFO who tells a recorded investor call "that ain't happening"?) Costco has always been the contrarian among the largest chains. Read more...

What's interesting here is why Genesco thinks it will get to take Visa to court: A month before Visa notified the acquirers of the assessment, Genesco signed a separate agreement with one of the acquirers, Wells Fargo (NYSE:WFC), in which the bank actually signed over its right to sue Visa to Genesco.Read more...

That may not be as paranoid as it first looks. Amazon filed (and paid the $185,000 per TLD application fee) for 76 separate vanity TLDs—all of which it intends to restrict to Amazon and its subsidiaries. (Yes, we looked at all 76 applications.) Some of the most obvious TLDs retailers might conceivably be interested in—.shoes, .toys, .fashion, .jewelry and .tools—have no retailer applicants. They've all been applied for by companies that actually believe they can sell domain names ending with those TLDs. There's also .food, which is the focus of a three-way competition among two domain registrars and the Food Network, which wants to take it private. Amazon, Google and a Hong Kong foundation are each fighting for .kids. How likely is it that .book—owned by Amazon or anyone else—will have an impact? Barnes & Noble (NYSE:BKS) owns both book.com and books.com, which both redirect to the chain's own site. That doesn't seem to have given B&N much of a monopoly.Read more...

When it comes to softening up shoppers and making them more comfortable sharing personal information with retailers, nothing has done a better job than social media sites. Mobile devices, with their geolocation capabilities and continual beaming of “this is who I am” signals to anyone who chooses to listen, come in a close second. But a recent study has challenged that thinking. Understanding the nuances of how shoppers perceive privacy, what information they consider to be private and what incentives will work to make them give up data is crucial, whether it’s for a CRM (individual) strategy or to merely better understand shoppers in aggregate. With teen shoppers, the challenge is different. The tactic to get them to surrender a piece of private data has to start with understanding what they consider private. What Facebook and Youtube have indeed done is to make them think many of the most intimate details of their lives are not private. Hence, if you want their E-mail address, a one-time $5-off coupon may be all that’s needed.

This is explored in StorefrontBacktalk‘s March monthly column in Retail Week, the U.K.’s largest retail publication. The column lives here at Retail Week. For those who don’t have a Retail Week subscription—shame on you!—here’s a copy at StorefrontBacktalk. You can also check out all of our recent Retail Week columns here.…

Here's how similarly both chains view the problem. On February 26, Macy's CFO Karen Hoguet said: "Candidly, it's getting so hard to know what's a store sale and what's a mobile sale and what's Internet. It's getting harder to figure out the lines between them." On March 11, Dick's CEO Edward Stack said: "We are making this reporting change because, as we build out our omni-channel platform, it is becoming apparent that the traditional sales channels are overlapping with the digital space and that providing comp sales on a combined basis will be more meaningful." But by "combined" Stack means that online numbers will be explicitly broken out. "We will continue to provide the size of the E-Commerce business as a percentage of total sales," he said. Stack gave the example that E-Commerce for this quarter was 8.6 percent of total sales, which placed online sales at about $155 million for the quarter.Read more...

No security system is perfect, so the existence of a break-in—on its own—doesn't prove that security procedures were not followed nor that they were not appropriate. The case—heard in U.S. District Court for the Northern District of California in San Jose—raised several other arguments for customer seeking compensation for the breach, and the court shot them all down. To start the proceedings, the customers had to make a case for how they lost money as a result of the breach, given that it appears none of their personal information was ever used by the thieves.Read more...

At KFC, the mobile percentage is expected to be much higher. That's because people typically want pizza delivered to their home or office, whereas a bucket of wings is picked up—after having been ordered from someone driving or walking near the store. (KFC in the U.K. does not deliver.) Pizzas also take longer to cook—compared with preparing already-cooked chicken parts—making the "order and have it waiting for you" model ineffective for KFC. Instead, KFC UK will soon add a geolocation function (likely to be launched in May), so the app knows when the customer is truly right by the restaurant and can ask the customer if the order can be prepared.Read more...

Say what you will about Amazon (NASDAQ: AMZN), but it’s an impressive operation when it comes to sweating the details. One such design innovation from Amazon—it’s ultra-smooth, almost instantaneous-responding pulldown menus—was driving one developer crazy, until he (possibly) figured out how Amazon’s people did it. The developer is Ben Kamens, who is lead developer at Khan Academy, and this is his theory on the pulldown magic, along with his suggested code for replicating it. The trick appears to be not that different from Amazon’s gravity-based link assist Patent, where the system anticipates where the cursor is headed and opens the pulldown a split-second before the cursor gets there, making it feel like an immediate response.

Pulldowns have always been an efficient programmer tool

(lots of content, minimal space), but never a shopper favorite. They are typically infuriating to use, with the submenus disappearing as the cursor tries to get there to click. Amazon’s approach fixes this issue, too, because the submenus politely stay there, assuming the shopper’s click will eventually arrive. Hats off to Mashable for first spotting this.…

That is already the law outside the United States and Canada, writes Legal Columnist Mark Rasch, and it may already be the law in those two holdout countries. It's a matter of interpretation.Read more...

Today’s frightening question: What happens when your payment processor gets into a legal fight and suddenly can’t process your transactions? This is likely to happen periodically with mobile payments, as patent violations and state revenue rules start to play out. As if to prove that point, Illinois is ordering Square to halt any payments processed within its borders, something that is not likely

to sit well with Illinois Starbucks (NASDAQ:SBUX) fans—nor Starbucks itself, nor any other Illinois Square merchant.

The Illinois cease-and-desist order involves the ghastly accusation that Square has not obtained the proper state license, something that is complicated by the fact that Square is arguing it doesn’t qualify for that particular license. Square has been fighting this battle in other states, too, with varying results. This is just something to remember when mobile processors are pitching their extreme savings. When entering new, uncharted financial waters, the costs get lower as the risks get higher. This won’t likely be an issue in about two or three years. But for now, having one or two back-up processors is probably not a horrible idea.…

"Over time, Facebook users in our dataset exhibited increasingly privacy-seeking behavior, progressively decreasing the amount of personal data shared publicly with unconnected profiles in the same network," the CMU report said. The implications for retailers are stark, suggesting that many of the privacy strategy underpinnings on both retail and e-tail may be flawed. The report also found that those same consumers started sharing more information during that period, but only with people they assumed to be in a private group. And that sharing was expanded "both in terms of scope and amount of personal data." For retailers trying to extrapolate insights from this report to apply to chain CRM and mobile programs, these two conclusions are frustrating.Read more...

The Yahoo (NASDAQ:YHOO) move to yank telecommuters back to HQ was based on new CEO—and current Walmart (NYSE:WMT) board member—Marissa Mayer's review of VPN records, presumably suggesting that a lot of workers weren't checking in very often. Hopefully, Mayer had a lot more evidence to go on, because workers might have been performing their jobs fully without having to check into the network routinely. But the problem with both the Yahoo and Best Buy changes is that, if we take the statements from both companies at face value, they are doing this to get better controls in place. If that's the case, then workers are being punished because of poor management procedures and, most likely, poor managers.Read more...

Google has been testing a same-day delivery service since last fall with several chains, limited to employees and a small number of other testers. The big problem is the one that all same-day efforts in the U.S. have faced: Even affluent customers won't pay more than $10 per delivery.Read more...

Joly didn't mention that the website problems date from Best Buy's long outsourcing arrangement with Accenture, which the retailer is quietly unwinding. But an all-new online platform that will take years to develop after a long period of outsourcing—what could go wrong with that plan? Oh, right—ask Target (NYSE:TGT).Read more...

That good sign? As badly broken as its system may be, Isis is trying to fix what's actually broken.Read more...