Evan Schuman's StorefrontBacktalk

The retail industry, fresh out of its exhausting and profitable holiday season, is used to coming together in January and watching vendors strut their latest toys for good retail IT girls and boys. But this year is not shaping up to be like most years. The vendors, in smaller numbers, will still be strutting, but will anyone be buying?

The pitches have been tweaked this year, to stress low-cost units, typically stripped down of features. The more daring vendors will be pushing more aggressive deployments, arguing that consumers need to be wowed now more than ever. This approach is coupled with a sales pitch that younger consumers are expecting more instantaneous feedback while in-store, so retailers must either invest now—somehow—or lose even more revenue to online and smaller brick-and-mortar rivals.

Microsoft will use the show to roll out its version of smartphone-readable 2-D barcodes. Redmond’s approach with “Microsoft Tag” brings multiple colors into those barcodes, which allows them to be 50 percent smaller but still more easily and reliably read than today’s 2-D barcodes, said Kevin Kerr, Microsoft’s worldwide retail technology strategist. Microsoft Research has dubbed them High Capacity Color Barcodes (HCCBs).

“The advanced computer imaging of HCCBs employs different symbol shapes in geometric patterns and multiple colors to significantly increase the amount of information that can be stored on analog printed media (over traditional 2D codes)and improve readability on poorly lensed mobile phones,” said a Microsoft statement.

The part Microsoft likes best is that the data flows through the phone to its servers, where retailers can use Microsoft’s analytics via a Redmond-hosted model.

But Microsoft isn’t seeing this application initially as a mainstream retail option, focusing instead on niches where mobile-friendly consumers tend to shop. “You have to look at the demographics of who’s using these phones,” said David Gruehn, Microsoft’s U.S. retail industry director. “Think about a large gaming store. It’s not that I won’t be talking to the Targets and Home Depots of the world,” he said, but it’s not where he’ll start.

The service will also include geolocation, but the consumer must agree to allow his/her location to be transmitted to Microsoft and then to the retailer or consumer goods company. Microsoft’s location effort doesn’t involve GPS, using instead cell tower triangulation, which delivers a location accurate within about 500 feet. In other words, it will pinpoint which store is being used but not where in the store the person is standing.

How to get retailers to invest in it? Microsoft is offering the 385K application for free, along with the cloud package.

Beyond Microsoft, the show floor will include a concept store selling music, one where consumers can drag virtual instruments onto a screen to create customized music, said NRF VP Susan Newman. Another booth will let consumers scan their face and then paint that image with virtual makeup and lipstick, allowing an easier way to experiment with cosmetics.

Another vendor will use the show to unveil a wireless debit card device, a piece of equipment delayed until PCI debit-specific rules could be accommodated. But as Macy’s reminded the industry this month, debit cards can cause a lot more consumer damage than credit cards. If the typical credit card has a multi-hour glitch, it’s barely noticeable to consumers. If the same thing happens with a debit card, those consumers could have their bank account emptied and start bouncing checks all over town.

Still, with credit rules tightening, debit cards may be the only viable plastic option for some consumers this year. And now, they’ll be able to make those charges wirelessly. The question for retailers: Will enough consumers be spending money this year in any format?