TechWreck: Ten Credit Card Breaches of 2014 (So Far)

Given the well-publicized Target security breach last December, you’d think businesses would have been warned to take extra care when it comes to protecting consumers’ payment info. But alas, news about credit card breaches just keeps on coming. And here is a quick review of ten major breaches in the U.S. this year so far:

On Jan 10, upscale retailer Neiman Marcus announced that it started an investigation on a hacker break-in that had compromised an undisclosed large number of customer cards.

On Feb. 7, White Lodging, a company that maintain national hotel brands including Hilton, Marriott, Sheraton and Westin, issued a statement acknowledging a payment data breach at 14 hotels that exposed credit and debit card information on thousands of its guests.

On Mar. 2, National beauty products chain Sally Beauty became the latest victim of a breach targeting their payment systems in stores, with 15 stolen credit cards sharing a similarity of being used recently at various Sally Beauty locations.

On Mar. 28, Liquor store chain Spec’s announced that more than half a million customers at 34 stores owned by the company may have had critical financial information stolen in a sophisticated computer scam.

On Apr. 17, Michaels Stores, the largest arts and crafts chain in the States, acknowledged that a security breach, first reported back in January, had affected up to 3 million customer credit and debit card accounts.

On July 9, More than 10,000 customers of The Houstonian Hotel, Club & Spa in Texas was notified that their payment cards had been compromised in a “malicious software attack”.

On July 18, financial institutions across the country reported that multiple locations of Goodwill Industries stores have been identified as a likely point of compromise for an unknown number of credit and debit cards.

On July 23, local restaurant group claims in Delaware claimed that an undisclosed number of Delaware restaurants have been affected by a credit card breach that compromised its point-of-sale software.

On July 31, Sandwich Chain Jimmy John’s reported that it started working authorities to investigate a security breach involving its customers’ credit card data. The scope of this breach has yet to be confirmed.

On Aug. 6, Chinese bistro chain P.F. Chang’s confirmed that 33 of its restaurants across the country revealed were affected by the credit card breach, after two months of investigation since the discovery back in June.

Tech Wreck: Do You Need A Hug?

Every now and then, some innovator in the tech scene will come up with an idea that makes everyone wonder if technology has gone too far. This week, it’s The Hug, the dumbest smart-thing we have seen this month.

Created by Finnish start-up Caktus Inc. and currently on Kickstarter, The Hug is a two-part connected device that helps users stay properly hydrated. It includes a sensor band that wraps around your water bottle to track your liquid consumption, and an accompanying iOS app that sends you notifications when your hydration levels are low.

Noble as their efforts are, the geniuses behind The Hug forgot two simple facts in their pursuit of the Water Bottle 2.0. First and foremost, water intake is such a basic physiological need that everyone can recognize thirst without constant external nudges. Even worse, The Hug is simply too impractical to use: normal people typically use different vessels as their locations change throughout the day. Even though The Hug claims to fit “most existing bottles”, it’d still be a major hassle to carry a sensor around every day, put it on every time you decide to drink, and wait for the app to sync up and recalibrate, all before you could just lift up that cup and hydrate your body.

The Hug is just one of the many well-intentioned ideas that got carried away in the tide of Internet of Things. The health-related “value” it supposedly offers is disproportional to the effort it requires, which ultimately renders this product useless. At the end of the day, we all need to calm down, and ask ourselves: do we really need The Hug, or do we just need a hug?

Update: Their Kickstart campaign has failed. Hope everyone there is getting a hug.

MAGNA Infographic: The World Of Global Digital Media In 2013

This map from MAGNA represents the global digital media market in two dimensions. The size of each country is proportional to its domestic digital ad revenues (including search, display, video, and social) in 2013. And the color code represents the maturity of the market (i.e. the share of total advertising spend going into digital media) around the global average of 24%. This visually informative infographic shows, for instance, that UK is number one in terms of maturity, with digital media controlling 43% of the advertizing market (USD 9.5bn), followed by Netherlands and China (37% and 35%, respectively). It also shows that despite taking up 36% of global spending in digital ad., the US is only slightly above global average with a maturity level of 27%.

MER5_Digital_Map

 

Note: the infographic featured here is an updated version of a similar one the Lab published over a month ago.

Myriam Joire: A Brief History of The Smartwatch

Myriam Joire, the well-known tech writer and Chief Evangelist for Pebble, took the stage at last week’s Wearable Tech Expo in NYC to deliver a fun and opinionated overview of the history of the smartwatch.  Providing a fascinating historical perspective, she started with the world’s first wristwatch— made in Switzerland by Patek Philippe in 1868 as a novel piece of jewelry.  At the time the pocket watch was king, and the idea of a timepiece on your wrist struck most as preposterous— especially as a commercially viable product.

Joire’s journey took the audience through the first LED watches in the 1970’s, followed by calculator watches and PDAs until we finally arrive at today’s watches (and not surprisingly Pebble’s latest product).  The key takeaway was that the next two years in the industry will continue to meet battery life and display challenges.  Users are starting to crave the full color displays they’re used to with smartphones, but delivering that quality in a wristwatch takes significant battery power.

In the near future, Joire expects voice recognition to become integral to smart watches since the form factor makes typing less than ideal.  She also voiced enthusiasm for predictive capabilities in smartwatch computing if we proactively give our data away (“We need to start to trust our technology”), as well as the proliferation of device pairing between smartphones and smartwatches.

Looking off into the distant future, Joire also wasn’t afraid to endorse what she sees coming next: device implants that actually are actually integrated into our bodies. “That counts as wearable!” she concluded.

The Big Ambitions Of Little Rice (XIaomi)

By now, you have probably heard about Chinese smartphone manufacturer Xiaomi. Heralded as either “the Apple of China” or “Blatant Copycat”, depending on whom you ask, Xiaomi’s meteoric rise in recent years has caught the eyes of western media, even if its target market has been almost exclusively domestic so far. Popular as their products are in mainland China, even outperforming iPhone in a recent study on leading smartphones’ app usage in China, it is not until recently that a few new developments from the company indicate the big ambition of Little Rice (a literal translation of Xiaomi).

Earlier last week, Xiaomi launched Mi 4, its newest offering in smartphones. Boosting a steel frame, IR blaster, top-tier specs and an affordable $320 pricetag, it is a dazzling product that once again raises the bar on “made-in-China” budget phones. More importantly, the “one more thing” that Xiaomi revealed along with Mi 4 is a $13 sleep and fitness tracking wristband named Mi Band. It also promises a battery that lasts up to 30 days and a proximity-based function that unlocks linked Xiaomi phones without password. By introducing such an aggressively priced, multi-functional smart wearable, Xiaomi is not only gaining an unchallenged head-start in the wearable market in China, but also potentially upending the upscale positioning that most wearables seem to employ in the global consumer tech market.

xiaomi-mi-band-enAnother indication of Xiaomi’s big ambition is its recent foray into the international market. By striking an exclusive partnership with India’s biggest e-commerce operator Flipkart, Xiaomi has launched its smartphones in the subcontinent, marking its first step in entering the Indian market where Samsung and native brands currently dominates. In addition, Xiaomi is starting sales in 10 new markets including Brazil and Russia, while also reaching out to local e-commerce operators for its expansion to the Philippines and Indonesia. Such an extensive roll-out has turned out fairly successful so far, with Xiaomi reportedly more than doubled its year-on-year sales since the international expansion began.


Screen Shot 2014-07-25 at 6.02.20 PM

Formidable as Xiaomi’s rapid growth might seem, the big tech players in the western world don’t need to start worrying about Xiaomi just yet, as the company is still very much focused on markets in the developing countries. Whether its products are quality enough to conquer the global market also remains to be seen. And the company’s long-standing habit of unabashed appropriation of Apple could hinder it from entering the western market where the tech giants are litigious and have deep pockets. Nevertheless, one thing is clear to see: the little rice is aiming big, as the company starts shouting “Xiaomi the money” at the global market.

By The Numbers: Connected Cars

It is Bill Gates who once mused that “If GM had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 MPG”. Well, today it looks like the auto-makers don’t have much of a choice but to catch up with technology, as over 66% of consumers surveyed by Accenture (see infograph above) put “in-car technology” ahead of “driving performance” as the bigger influencer in their car purchase decisions.

  • Right now, the number of cars connected to the Internet worldwide is estimated at 23 million, according to IHS Automotive

Even with auto-manufacturers slowly realizing the market demand for connected cars, however, there are still some developmental roadblocks in sight. For starters, the development and update cycles of the mobile technology greatly outpaces that of the automobile and such difficulty in syncing could spell big trouble for the built-in original equipment manufacturer (OEM) systems. Even with the brought-in methods that involve tethering dongles or linking smartphones to the cars, there is serious concern on the compatibility issue between different proprietary products. Neither approach is perfect, hence some automakers’ hesitance in moving forward. Nevertheless, the auto industry is, with a little prod from the tech world, slowly but surely catching up with the trend.

  • Over 20% of global vehicle sales in 2015 to include embedded connectivity solutions
  • Over 50% of global vehicles sales in 2015 to be connected (either by embedded, tethered or smart phone integration)

GSMA Connected Car Forum

Covering all current methods to get a car digitally connected, these two optimistic but conceivable forecasted numbers point to a bright future for the marriage of tech and auto. Almost all major tech companies have now forayed into the field. We’ve got:

  • Apple with its CarPlay OS looking to link iPhones with cars;
  • Google’s Android leaning on leaders of its Open Automotive Alliance, including 29 automakers currently on board, to push it out;
  • Microsoft trying to gain traction for Windows in the Car;
  • BlackBerry being the potential black horse in the race, as its QNX operating system is the same system that runs beneath CarPlay and Android Auto.

Regardless of the outcome, with all these tech giants powering the engines, it looks like those fancy connected cars are indeed in the fast lane, from L.A. to Tokyo.

Indoor Location & Privacy: Steering Clear of the ‘Creepy Line’

In the nascent indoor location ecosystem, marketers are just beginning to wrap their heads around the access to location data and its implications for digital media. Consumers are even less aware, if at all. Did you know, for instance, that retailers can know exactly how long you spent in a store, if you’re a new or repeat shopper, and what aisles you visited simply by having wifi enabled on your smartphone?

The afternoon session of the Place Conference in NYC discussed these very issues in a panel titled  “Indoor Location & Privacy: Steering Clear of the ‘Creepy Line’.” While there were plenty of industry experts weighing-in, including an FTC attorney and the Executive Director of Future of Privacy Forum, they were quick to point out that there is no specific legislation relating to location based marketing, just guidelines…at least for the time being. There are some basic best practices, however.

Notice – Provide consumers with privacy notices that are clear, short, and standardized to enable comprehension and comparison of privacy practices. The exception to this is collecting data that is not unique to the device, including counting the total number of times unspecified mobile devices have been detected by a network.

Opt-Out – Give consumers a centralized site to opt-out and receive more information. Any notices should link to this site.

Opt-In – Receive opt-in when personal information is collected or when a consumer will be contacted

Connecting the Dots: How Location and Offline Analytics Will Transform Digital Marketing

Today’s Place Conference tackled the burgeoning location-based marketing space which is experiencing tremendous growth thanks to the rise of sensor technology. Bluetooth beacons, wifi, audio fingerprinting and even video software are unlocking microlocation analytics, detecting movement and behavior with unprecedented precision. In retail–the most common use case–these sensors can provide shopper analytics at the shelf or even product level.

During the panel, “Connecting the Dots: How Location and Offline Analytics Will Transform Digital Marketing,” folks from YP, RetailNext, ilnside, Walkbase and Opus Research took to the stage to discuss the implications of this new data. Broadly speaking, there was some debate around using location signals to monitor hard ROI metrics like sales and visits versus transforming the customer experience through a more holistic approach. Below are some of the core benefits some of their clients are finding.

Attribution

Many companies like YP are using location based data received within apps and mobile web to connect ad exposure to store visit. This could create an unprecedented level of attribution available through mobile but could also have implications for other media, particularly OOH.  Through location signals, OOH companies will be able to gain valuable audience data to sell inventory and measure ROI. For instance, passerbys around a particular billboard happen to over-index on sports stadiums so why not sell to athletic apparel and sports brands or close the loop to indicate that they have actually visited a venue. Timing does play a factor however, as users may not be as impulsive, visiting a location after the period in which that location data is stored.

Optimization

Largely a result of attribution, clients are using location data to optimize everything from store layouts to marketing signage. In these instances, most retailers are using wifi, bluetooth or cameras to detect movement patterns and flows throughout store, correlating that with purchase data and other measures.  For instance, retailers can now see metrics like window conversion rates (percentage outside store that enter) which is a measure of how effective your window display may be. Other examples may include analyzing heatmaps of traffic patterns to determine the most profitable customer journey. A/B testing is often used to influence decision making.

Engagement

Beyond traditional location-based targeting via GPS, retailers are experiencing more precise targeting throughout the path to purchase. Beacon technology, for example, could enable sequential messaging when a shopper enters a store, reaches a shelf, or returns to a location. Navigation also factors highly into the equation as retailers and brands can help direct shoppers down to the product level. This would be critical to large, multi-purpose venues like Ikea who could begin rolling out these sorts of proximity messaging to assist with navigation, in-store pickup, and even checkout.

There is no question about the tremendous potential for marketers to unlock new consumer touchpoints. Yet, there are also a number of key considerations, namely scale, privacy, operational costs and maintenance. Are these barriers worth jumping over or are they a cause for concern?

Off Target: Retailers’ Big Data Management Fails

It is a truth universally acknowledged, that a modern consumer in possession of a retail membership card, must be tracked in collection of purchase data. Privacy and prejudice aside, however, people seems more than willing to offer up their personal information in exchange for some monetary rewards or membership benefits.

But what if your retailer figures out something personal through data tracking and starts doing something with that information without your consent? Starting with the Target pregnancy score scandal, in which a father found out about his teen daughter’s pregnancy through a baby product-heavy mailer, retailers as diverse as J.C. Penny and BestBuy and small tech start-ups like SceneTap have all been caught in the cross-fire of consumers’ indignation over privacy violation. Most recently, Target once again found itself in a comprising position with the media exposure on a widespread credit card breach affecting over 110 million Target shoppers. The incident alarmed a lot of previously unsuspecting customers and highlighted another landmine field of big data mismanagement—security concerns.

All these controversies have sparked several rounds of national debates on privacy and consumer rights. Still, the debates prove to be futile, as businesses continue to collect data from their customers without much protest. The conclusion here is that most people don’t really mind being tracked if they receive some value from it, and if their data remains secure. Retailers must behave responsibly with data and learn to manage it better if they want to remain in the good graces of consumers.

By The Numbers: Big Retail Data

Arguably the most established commercial application of big data is the way retailers have been tracking and building their consumer database. Whether through building consumer profiles, analyzing purchase records, or even tracking in-store movements, data can reveal unexpected insights:

  • With systems in place to analyze unstructured data, retailers can now experience an uplift of 18 to 22% by doing simple behavioral profiling based on clickstreams.

This statistic, reported on retailcustomerexperience.com by Tushar Montaño and Monica Pal, highlights a big reason why retailers are jumping on the big data train.

Scouring through the consumer data for competitive advantage has become somewhat a standard practice among big retailers. Retailers like Zappos and Amazon are now also using personal data to develop customer relationships that could lead to brand loyalty. And if a simple, clickstream-based behavioral profiling could bring an increase of around 20% in purchases, imagine what the newer technology, such as measuring window conversion rates to measure storefront displays and connecting outdoor ad exposure to store visit through the WiFi-based platform, could lead to.

  • In 2010, just 1.7% of small businesses were using business software; by last year, 9.2% had adopted such tools.

Reported in New York Times by Ray Boggs, the small-business market analyst at IDC cited easier-to-use products and lower prices as prime drivers of the growth.

The sharp increase of small business embracing intelligence databases nicely dovetails with the trend within big retail chains to track customer purchases with memberships and teaming up with credit card companies. While small business might not always have the recourses to handle the same amount of data those bigger retailers have, nevertheless they could leverage the limited but crucial data they could manage into building a rewarding, intimate relationship with their customers.

The followings are some of the key findings from Inmar 2014 Coupon Trends Report:

  • Manufacturer digital offers in market are up 250%
  • The number of digitally connected loyalty shoppers is up 40%
  • Growth in digital coupon redemptions is up 141%, with over 66mm redeemed

While retailers have gotten fairly accustomed to managing the information they put out on traditional media sources, most of they are still trying to make sense of the new digital and mobile media. It is important to note that these fast growing new media offers the retailers far better channels for data acquisition, whose potential has yet to be fully explored. But with mobile-influenced offline retail sales expected to reach $700 billion by 2016, according to Deloitte, figuring out how to fully engage the online and mobile customers becomes increasingly crucial.