• January 3, 2014
  • If you’re sickened by the holiday season data breach that took place at Target, take heart, there really is something you can do about it or more precisely there’s something your credit card issuers can do.  First, some fun facts courtesy of the New York Times.

    • The United States accounts for more than 47 percent of global credit card fraud, while generating only 24 percent of card spending, according to the Nilson Report, a card industry newsletter.
    • More than 80 countries around the world use smart-chip technology, but less than 1 percent of credit cards in the United States have the technology.

    ¿Por que?

    What’s sickening about this situation is that smart-chip technology, i.e. chips on your credit cards rather than the mag stripes we know, is old technology.  Chips aren’t as old as the mag stripes, which were invented in the mini-computer era; they only go back about a decade.  Europe began embedding chips back in 2002.  I guess we’re still waiting to see if it works.

    Smart chips offer one of my favorite technology stories and make me seem smart, this one goes back to the Enigma Device of World War Two.  Enigma, you might recall was a pre-computer that encrypted messages one letter at a time so that each letter had a slightly different solution which made the code virtually unbreakable, except that the Allies eventually did find ways to break it.  One of the ways was to capture German U-Boats, which relied on the codes to collaborate with their home port and other U-Boats to sink Allied shipping.  Do not underestimate the difficulty of capturing a submarine from a hostile crew in the open ocean.

    SmartChip-resize-380x300But enough of that.  The chips enable each credit card transaction to be scrambled with a unique code.  The code might be breakable but by the time the bad guys can break it, the whole system is using another cipher so the code breaking effort is moot.

    It’s one thing to have a healthy skepticism about new technologies but quite another to ignore something that works at a time when a solution is needed.  No company such as Target should be expected to carry the whole load for something like this and blaming Target for the mishap might make us all feel good but it misses the point.  Electronic commerce in North America needs a system that’s equal to the challenges of modern thieves but what we have is a solution comprised of thousands of Balkanized efforts to physically protect data.

    Think of the irony in this.  We have a government agency, the NSA, slurping up all of our communications data perfectly and private enterprise can’t manage to protect itself from thieves.  And all of this is happening with the backdrop of political wing nuts claiming the government can’t do anything right.  Ha!

    Published: 10 years ago

    Shades of George W. Bush and Victoria’s Secret all in one.  We got fooled again last week by our own ineptitude and inability to learn from history when Target stores website crashed under the weight of a highly successful marketing campaign.  The last time anything remotely similar happened was when Victoria’s Secret decided to do an online fashion show.  The results and root causes were the same — too many eyeballs, too little bandwidth.

    In case you didn’t see this, according to a September 13 story in the New York Times customers with ravenous appetites for the Italian designer Missoni’s clothing couldn’t wait to get at the bargains and the Target site was no match.  (I believe Oprah pronounces that, Tar-zhey, whatever).

    This is not the first time Target has done this kind of promotion.  According to the Times, Missoni is just the latest in a line of low-price designer self-knockoffs in which Target gets design houses to make some of their trademark clothing at Target prices.  Previous houses that attempted to make it up on volume include Calypso St Barth, Liberty of London, Rodarte and Zac Posen.  As the character Cliff from the old Cheers show once said on Jeopardy, none of these people ever sat at my kitchen table, but that’s just me.

    What was different this time was the approach Target used.  The retailer launched a national print and TV advertising campaign for Missoni and the campaign was the first test of Target’s new strategy to take its website off the cloud and host it all in-house.  (For this they get points for, uh, oh, never mind.)

    That’s right, this was cloud computing in reverse!  In the middle of the Times piece was this hilarious paragraph:

    “While Target recently stopped using Amazon’s e-commerce platform to make its Web site work, analysts said Tuesday’s problems were probably caused more by unexpected demand for the Missoni products.

    Which was immediately followed by this outright hallucination,

    “It’s hard to attribute the site being down to the Amazon separation, although Amazon Web Services offers elastic computing power that would have helped with this surge in demand,” said Matthew Nemer, an analyst at Wells Fargo Securities who covers e-commerce, in an e-mail.

    Unexpected demand?  That’s the point!  The demand was greater than what Target normally sees on the day after Thanksgiving — the busiest day of the shopping year.  Of course it was unexpected, that’s why you use cloud computing – because you can’t forecast and you presumably care and because your job might be in the balance!  Because you don’t get a second chance and you really, really make your customers unhappy with an outage like this and that’s not exactly what they teach in Retail 101.  (Do I have any money with Wells Fargo Securities?  No?  Good!)

    Of course this went viral and social in the worst ways.  Memo to retailers who think social hasn’t caught up to retail — and I feel like curation software is really the better way handle this — here’s why sentiment analysis is so important.

    Item number one: Jessica Alba to Jessica Simpson, also in the Times article,

    “I dreamt about the Missoni 4 Target bike last night,” Ms. Alba posted, referring to a $400 bike covered with zigzags. “I want that bike too!!! So cute!” Ms. Simpson responded.


    Item number 2, again from the Times, actress Mindy Kaling posted on Twitter,

    “@target broke my heart today when I could not access their site once in 9 hours for Missoni.”

    (I am beginning to feel like David Letterman by counting these things.  Also, I hate the idea of breaking these actresses hearts.  So cute!)

    Item number 3 to infinity, a typical shopper posted,

    “Seriously so mad at @TargetStyle. Why did you not prepare for the Missoni for Target line?

    Why not indeed?

    Yup, the Times ran that one too.

    About the only really interesting and good thing for Internet commerce to come out of this was that in true social form people were helping each other as much as they could.  Some of the Tweets suggested hitting the mobile site, which is apparently on a different server farm.  Also, by the end of the day Internet entrepreneurs were selling north of six thousand Missoni items on eBay.

    I’d like to thank Target for running this experiment to show us all the value of cloud computing, especially its elasticity.  Thanks also for demonstrating the value of social networking and the importance of maintaining positive customer sentiment.

    We’ve come a long way since we first started talking about “clicks” and “bricks” and how the Internet would be “the end of retailing”.  Funny, but at the time I don’t think anyone envisioned the words being arranged in quite the way that happened last week.

    Arrivederci, Missoni!

    Published: 12 years ago