Thursday Jan 30, 2014

Cookies in the Store

Online retailing has many advantages, which companies like Amazon have magnified with great success.  Since the early 1990s, technology has enabled great leaps forward for e-commerce sites while the brick-and-mortar world has remained relatively stagnant.  Yes, there are pockets of in-store innovation that have certainly  improved the customer experience inside stores, but by-and-large the Web world retains a big advantage. 

Tax legislation is finally being passed (on a state-by-state basis for now), which helps level the playing field a bit.  And by the same token, next-day delivery detracts from offline's allure of instant gratification.  Both physical and digital stores continue to up the ante, and consumers are the big beneficiaries.

One huge advantage of e-commerce sites is context awareness -- knowing who's browsing products, along what path, for how long, from what geography, etc.  The nature of the Web allows online retailers to "watch and learn" how customers shop and even to influence their behaviors along the way.  But this notion of context isn't strictly limited to the Web, at least not anymore.  Mobile phones are acting like Web cookies in the physical world, opening up possibilities that retailers only imagined were possible online.

The table below shows some online capabilities alongside some similar offline capabilities.

 Online  Offline
 Cookies  Mobile Phones
 Login  Geo-fence / Check-in
 Visitors Metric
 People counters
 Pageviews Metric
 Product info
 QR Codes
 Recommendations  Assisted Selling
 Opt-in + Beacons
 Promo Codes
 Digital Coupons

Assuming the right hardware is installed in the store and the customer has opted-into being tracked via the retailer's mobile app, a world of opportunities are suddenly accessible. We can follow customers on their journey through the store, noting where they dwell and which items they touch.  These data points yield improved store layouts, better assortments, and more localization.  Furthermore, we can make intelligent recommendations, offer personalized offers, and award/redeem digital coupons as they shop, enhancing the overall customer experience.

So much of the same context the online retailers take for granted is now available to brick-and-mortar stores for both analytics as well as real-time engagement.  None of these in-store capabilities are really that new, but the idea of combining them to provide a holistic view is where we're going.  And when you track events across both stores and e-commerce, you have contextual shopping at its best.

Wednesday Jan 22, 2014

Will EMV Protect Retailers?

Will EMV protect retailers?  About as well as PCI certification does today.  I used to work with the Europay/Mastercard/Visa standard when I developed software for smartcards, and the technology is certainly better than the ancient magstripe cards we use today.  But it was created before e-commerce really took off, and the US implementation of EMV isn't very secure.  Let's imagine for a moment that Target was ahead of the 2015 deadline and already had smartcard readers in its stores (like they did back in 2001).  Would they have been protected?

Since the smartcard has a tiny microprocessor embedded, it can do calculations like encryption.  When the card is inserted, it authenticates the POS, and the POS authenticates the card using a shared secret (typically an encryption key).  But in the case of Target, the POS was legit so they would have trusted each other anyway.

The typical Chip & PIN implementation in Europe requires the cardholder to enter a PIN to unlock the card, but in the US the PIN is optional and usually not required.  Do you know the PIN number for your credit card?  No one does because the banks think it would be inconvenient.

Since trust has been established, the smartcard sends over the account number and other associated data.  Its in the clear for a brief moment before its encrypted and sent to the bank.  This is the same situation as with the magstripe.  Until the banks establish the ability to support end-to-end encryption and/or tokenization, we've still got the same issue.

There is one area where EMV helps a little.  The thieves still get the creditcard data but they won't be able to create fake smartcards.  Those chips need to be programmed with the right data and keys, which are only available at the issuing bank.  So even though they managed to get the data, they can't create forged cards. Except for one little issue -- they can just use the card data online.  No need to create cards at all.

Just as PCI didn't really make retailers safe from fraud, neither will EMV.  Its a step in the right direction, but far from perfect.

Thursday Jan 09, 2014

NRF 2014

This year we're kicking off NRF with our new Release 14 which you can hear more about in the Oracle Retail booth.  I'll be spending my time there as well as walking the floor looking for trends and saying "hi" to friends.  Although I've always been a big supporter of RetailROI, this is my first year attending SuperSaturday and I'm really looking forward to it.  In additional to consuming all the great content, I'll also be leading a lunchtime discussion on innovation processes.

Here's a photo from last year's RIS/IHL/ARTS panel (courtesy of my buddy Darrell Sandefur):

On Sunday, I'll be delivering a part of the "ARTS and the Seamless Data Experience" presentation in which I'll focus on the value of standards for innovating.  I'd encourage NRF attendees to stop by and learn what ARTS has been doing this past year and what we're planing for 2014.  You can also stop by the ARTS booth and hear about our latest standard called Change4Charity.  Its an XML integration standard that simplifies taking charitable donations at the point-of-sale (which also includes Web stores).  Digital Donations, Donate Wise Now, and MiniDonations were all key contributors to this effort.

See you there!

Wednesday Jan 08, 2014

Release 14

On January 6th, Oracle Retail announced Release 14 of its enterprise suite of software.  This release represents our largest R&D investment to date, and it addresses the major goal of most retailers: Commerce Anywhere.  While there has been much said about the front-end experience for customers, that's just the tip of the iceberg.  As all retailers know, there are many systems behind the scenes that make delivering the Commerce Anywhere experience possible.  It might be really valuable to deploy iPads for store employees, and provide cool consumer-facing mobile apps, but none of that flash works without the back-office systems that gauge demand, plan the buys, source the products, distribute the inventory, and record the sales.

The market long ago identified the need for cross-channel, omni-channel, or whatever you want to call it.  But its such a difficult problem that many retailers have struggled to provide the supporting systems.  I don't think there's another vendor that offers the breadth of retail products that Oracle Retail owns, so the spotlight has really been on us to deliver.  This release provides the opportunity to transform a retailer's business to truly deliver Commerce Anywhere.

In a recent article, Mike Webster describes the release in terms of providing consumer journeys, targeted assortment offerings, inventory alignment & transparency, and integrations.  These are the principle components of the Commerce Anywhere recipe for retailers.  Additionally, we provide detailed business process flows and architecture diagrams that prescribe a Commerce Anywhere implementation.  Retailers can pick and chose the processes they need for their business and can mix the Oracle assets with existing ones as necessary because the answer can't be "replace everything and start over."

Additionally, there's new science, revamped user interfaces, deeper analytics, performance improvements, and lots of new features that help retailers plan and execute better.  One of my favorite things is our new Retail Integration Console -- a dashboard that not only monitors the performance of integrations, but allows drill-down for research and immediate corrections.  This supports both proactive and reactive troubleshooting that should help IT perform better.

So don't let the Amazon Octocopter distract you.  The retailers that execute on Commerce Anywhere will grow their business, regardless of what's happening in Seattle.

Thursday Jan 02, 2014

Commerce Anywhere

As we welcome the new year, I usually post my predictions for the future of the retail industry.  But given my dismal track record, I thought it might be better to look back at all the things that have shaped retail since this blog began in 2008.  Technology has become a huge driver in defining the new customer experience, so its more important than ever to monitor the landscape.  Below are a sampling of postings that introduced new concepts or trends.  Pick a few and think about how far we've come in this short time.

Retail Feels the Pain (2008)

Does Mobile Commerce Really Work (2008)

Social Side of Retail (2008)

Amazon's Competitive Edge (2009)

Speedy and Scalable Analytics (2009)

Retail in the Clouds (2009)

Shopping on my Phone? (2009)

Mobile Coupons (2009)

Augmented Reality (2009)

Crowdsourcing in Fashion (2009)

Get Your Group On (2009)

iPhone Redlaser (2009)

Apple Stores, Touch2Systems, and the iPad (2010)

The North Face Erects Geo-Fences (2010)

Google Rules for Retail (2010)

The Semantic Web and Retail (2010)

Bridging the Physical and Digital Worlds (2010)

Counting Eye-Clicks in the Store (2010)

Stop Saying "Multi-channel!" (2011)

Can You Trust Search? (2011)

Moneyball for Retail (2011)

Four Emerging Payment Stories (2011)

F-Commerce Gets an 'F' (2012)

Comparing ISIS, Google, and Paypal (2012)

EMV on its way to the US (2012)

Facial Recognition for Retail (2012)

Shipping Wars (2013)

3D Printing (2013)

The Cookie in my Mobile Phone (2013)

Crowdsourced Grocery Shopping (2013)

Apple iBeacons in the Store (2013)

The thread that ties all these themes together is Commerce Anywhere.  Whereas retailers often controlled the agenda in the past, consumers are now firmly in control, defining the ways in which they wish to shop.  And of course they want it all: anytime, anywhere, anyplace.  So its only fitting that I rename this blog the Commerce Anywhere Blog.  The focus remains on stories about delivering the best customer experience with special focus on applying emerging technologies.

Commerce Anywhere isn't just about bring the physical and digital stores together.  Its impacts are wide and deep, affecting every business process in the enterprise.  At Oracle Retail, we continue to provide solutions that enable Commerce Anywhere for the world's best retailers.

Welcome to 2014.


David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.

Industry Connect

Stay Connected


« January 2014 »