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NRF stresses collaborative approach to reduce fraud

BY Marianne Wilson

WASHINGTON — The National Retail Federation on Monday urged Congress to take a comprehensive approach as it contemplates a national response to criminal cyber attacks in which millions of consumers’ credit and debit card numbers were stolen. NRF said retailers are willing to do their part to improve security, but that banks and card companies must also take major steps to shore up the current fraud-prone payments system.

“Rather than resort to blame and shame, the parties should work together to ensure that the data breach is remedied and steps are taken to prevent and mitigate future breaches.”
 said NRF senior VP and general counsel Mallory Duncan.

Duncan went on to say that while retailers have every reason to want to see fraud reduced, they have only a portion of the ability to make it happen.

“We did not design the [payments] system, we do not configure the cards and we do not issue the cards,” he said. “We will work to effectively upgrade the system, but we cannot do it alone.”

Duncan was scheduled to testify Monday afternoon before a hearing on data security being held by a subcommittee of the Senate Banking, Housing and Urban Affairs Committee. In testimony prepared for delivery at the hearing, Duncan said the United States is under constant criminal attack from sophisticated cybercriminals – largely located overseas – who target financial institutions, manufacturers, public utilities, and other businesses, not just retailers.

“This is a continuous battle against determined fraudsters,” he said. “Every party in the payment system, financial institutions, networks, processors, retailers and consumers, has a role to play in reducing fraud.”

In the short term, Duncan said the banking industry needs to replace current cards that store consumer data on 1960s-era magnetic strips, and have users sign their name with modern cards that encrypt data on an embedded microchip and require use of a secret personal identification number (PIN). Instead, banks and card companies have pushed so-called EMV – Europay, MasterCard and Visa – proprietary cards that use a chip but remain open to fraud by allowing the use of a signature. Duncan said replacement of easily forged signatures with a PIN-and-chip card is essential to security.

Duncan urged the United States to look beyond the payment card industry’s (PCI) security standards and proposed EMV cards, and embrace a more secure and technologically advanced payments system that is as innovative as it is competitive.

In the longer term, Duncan said further improvements, such as point-to-point encryption of data, “tokenization” of transactions and mobile payments offer potential solutions to better protect consumers.

Duncan also urged Congress to pass the Cyber Intelligence Sharing and Protection Act, which would make it easier for the commercial sector to share information about cyber threats and ensure that cybercrimes are thoroughly investigated and prosecuted. He said NRF also wants Congress to replace the varying data breach notification laws currently on the books in 46 states and the District of Columbia with a single, uniform nationwide standard and bolster law enforcement agencies’ abilities to combat cyber attacks.

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Roundy’s set to make public offering

BY Dan Berthiaume

MILWAUKEE— Roundy’s will be offering 2.9 million shares of its common stock, and certain selling stockholders will be offering 5.9 million shares of the company’s common stock. The underwriters will be granted a 30-day option to purchase up to an additional 1.3 million shares of common stock from the selling stockholders, all at the offering price less the underwriting discount.

Roundy’s intends to use the net proceeds for general corporate purposes, which it expects to include funding working capital and operating expenses, as well as capital expenditures to build out the Chicago stores acquired from Safeway. The company will not receive any of the proceeds from the sale of shares by the selling stockholders, including the shares to be sold by the selling stockholders if the underwriters exercise their over-allotment option.

 

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Accenture: More shoppers plan to purchase in-store

BY Marianne Wilson

NEW YORK — Even as online shopping continues to grow, more U.S. shoppers are planning to make purchases from physical stores in 2014, according to a survey by Accenture. In the “seamless retailing” study, 21% of U.S. shoppers said they plan to increase their in-store purchasing, up from just 9% in last year’s study.

But there is plenty of room for improvement in physical stores. Asked what retailers need to improve the most, 40% of respondents ranked improving the in-store shopping experience first, compared to just 16% who said the same of online shopping.

“The survey results indicate that retailers have an opportunity to increase in-store sales, but only if they make the experience worthwhile for consumers,” said Chris Donnelly, global managing director of Accenture’s Retail practice. “Consumers are looking for the conveniences of shopping online, such as information on product availability, to be available in-store.”

Donnelly said that while the lines between the different shopping channels are blurring, the good news for traditional retailers is that the store continues to play an important role.

“In order to ensure that they offer shoppers a seamless retail experience, bricks-and-mortar/high street retailers must work hard to differentiate the shopping experience they offer compared to the online pure-plays,” he said.

In a key trend, the study found that more shoppers are looking to take advantage of seamless retail services involving the store: Nineteen percent of shoppers said they are using “click and collect” services more often than in the previous year. Additionally, more shoppers (14% compared with 7% last year) are buying in-store and having the product shipped to their home.

Here are some other key findings of the survey:

• The ability to check product availability online before traveling to a store is the service that would most improve the shopping experience for 31% of U.S. shoppers surveyed. And, the vast majority of respondents (89%) said they would either travel to a store to make a purchase or buy online if retailers offered real-time information on product availability.

• More than half — 57% — of respondents said that waiting for free delivery was the most important delivery option. Of those shoppers looking for next-day delivery, only 38% said they were willing to pay more than $10 for that convenience, and 14% said they believe the service should be free.

However, more shoppers expect the length of time they have to wait for free delivery to be reduced. In Accenture’s 2012 study, just 25% of respondents said they expected a free-delivery purchase to arrive within one to five days. In the latest survey, that number jumped to 44%.

“Services from the online pure-play retailers that offer faster delivery in return for an annual subscription, are having a profound impact on shoppers’ expectations,” Donnelly said. “Free delivery remains a crucial factor for a significant number of shoppers, but they are not always willing to wait as long to get it.”

• Seventy-eight percent of shoppers had webroomed (i.e., browsing online and then going to a store to make their purchase) in the 12 months before the latest survey, while 72% had showroomed (i.e., going into a physical store to see a product and then searching online for a better price and making their purchase online). The proportion of shoppers who engaged in webrooming for making consumer electronics and home improvement purchases increased significantly from 2012 — from 39% to 48%, and 25% to 35%, respectively.

• Fifty-one percent of shoppers expect a retailer’s product offerings to be the same across different shopping channels, up from 43% in 2012. More than half (57%) also expect promotions to be the same across channels and 69% expect prices to be the same.
 
However, only 31% of shoppers said that their customer accounts were completely connected across in-store and online channels, and just 32% said that they were able to earn and use loyalty points across multiple channels. In addition, the proportion of shoppers who believe they will secure a better price online rose from 21% to 31%.

“Delivering a seamless experience across all retail touch points remains both a key challenge and prime opportunity for retailers today,” Donnelly said. “Those retailers able to integrate the physical store with the rest of their digital capabilities, and who also use analytics to support new models of customer engagement and personalized service, can gain a true competitive advantage.”

 

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