It was a whirlwind few days for us at the recent National Retail Federation (NRF) Show held in New York. Over at our booth (#3769), we had a ton of traffic, with people stopping by to check out our product solutions. Of course, it didn’t hurt that we had the Cake Boss himself, Buddy Valastro, on hand hanging out hanging out with some tasty treats.
When I went into the show I thought that mobility and security would be the major talking points. That was the case, yet another topic kept coming up: “Skinny T1’s”. Basically, the consensus among retailers is that a T1 doesn’t cut it anymore. New, cloud-based applications require better performance and redundancy. Which means WAN design and bandwidth must be assessed prior to making the decision to purchase the application.
One of the main things EarthLink did at NRF was discuss the results of a survey we conducted in conjunction with IHL Group and AirTight Networks. According to that study, around 70 percent of the respondents said they were moving toward a cloud-based point-of-sale system in order to fulfill their omni-channel strategies. Yet, many conversations in our booth suggested that those decisions are being made without taking into consideration the budget consequences for the WAN. At one point during the show, for instance, several representatives from a retailer talked to me about how they failed to convince their CIO that moving to the cloud without improving the WAN infrastructure was basically a guaranteed recipe for disaster. They were frustrated and rightfully so. The best approach is to conduct a professional WAN assessment that provides all the data necessary to make the case for an upgrade.
On the security front, the consensus is that chip and signature versus chip and PIN is a “joke”. Most retailers are moving to point to point encryption with tokenization, which will solve the problem at the card swipe. This is a great solution, but we need to keep in mind that it doesn’t address the most common method for breaching a network. Most breaches occur via a gap in the corporate network where remote access credentials (usually through 3rd party permissions that are stolen) open the door to compromising a server that is vulnerable (most retailers are way behind with patch management). Malware is then installed on the server which infects the payment system and collects card data.
Even if the payment solution provides for complete separation of the card data and corporate environment, vulnerabilities in the corporate environment create risk associated with a breach that will focus on disrupting the retailer’s business and holding it hostage. Law enforcement officials believe this will be the next evolution of the breach similar to the Sony attack (perhaps a better choice of word versus breach in this case). Encryption and tokenization will protect the card data but other measures must be taken to protect against attacks. Once again, a great first step is a professional security assessment.
Mobility was also a common topic of discussion. Although the IHL study showed that 70% of respondents have WiFi installed, very few are using WiFi to engage the customer. And yet, the survey also showed that most businesses felt that WiFi had a positive impact on customer loyalty and sales. When we showed retailers how they can collect data and use that data to engage their customers in a more personal manner to impact loyalty, they saw an opportunity to create an ROI on the WiFi investment. The missing link is collecting information from multi-channel consumer touch points (WiFi, POS, and Ecommerce) to get an Omni-Channel view of the customer. A bit ironic that this is an issue with so much emphasis being placed on Omni-Channel strategies. I am currently working with potential EarthLink Retail Alliance partners to develop a solution. If you have any ideas, please get in touch.
That’s a quick recap of hot topics at NRF this year. In a follow up piece I will be looking into each issue in more detail and will provide some insight into how EarthLink can help.