OPERATIONS

Boston Retail Partners recommends EMV compliance, tokenization

BY Dan Berthiaume

Boston –- Between April and June of 2014, the retail sector led all industries in data breaches with 145 million records, or 83% of the total records compromised, costing retailers $195 per record apprehended. In response, Boston Retail Partners has released recommendations for data security best practices.

The recommendations include:

Support EMV-based (Europay, MasterCard, and Visa) transactions to validate the card authenticity for in-store purchases

Implement a single encryption point at the time of swipe or data entry and a single decryption point at the processor (End-to-End Encryption)

Implement tokenization at the earliest point possible outside of the environment and for all data at rest

“The challenge lies in deploying a comprehensive security strategy that mitigates risk, while at the same time protecting and maintaining corporate advances in unified commerce initiatives,” said Ken Morris, principal at Boston Retail Partners. “This will remain a hurdle amid growing customer expectations of a seamless experience across all retail touch points. The development of this strategy is critical, and must incorporate industry best practices in order to ensure an appropriate balance is struck between the customer experience and data security.”

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REAL ESTATE

Celebration Pointe begins construction on bridge

BY Staff Writer

Gainesville, Fla.Celebration Pointe has begun site work on a five-lane, $12 million bridge that will span Interstate 75. Celebration Pointe partner Ralph Contimade the announcement.

“We are preparing the embankments on both sides of I-75 right now,” said Conti. “We will begin pouring concrete in early 2015, and expect to have the bridge fully operational sometime in early 2016, well in advance of our projected grand opening.”

Once completed, the bridge will feature a dedicated lane for rapid transit unlike anything in the Gainesville area. The five-lane bridge will provide Celebration Pointe with a second major access point to the project aside from the main entrance at West Archer Road, just off of I-75. The bridge will also connect to other major arterials leading to and from significant points of interest in Gainesville, including its major healthcare corridor, central business district and the University of Florida.

“Given the tremendous response we have received from retailers, other end-users and the community at-large, the commencement of the bridge construction signifies yet another key milestone for us,” said Conti. “Designed with sustainability and multi-modal connectivity in mind, the project includes multiple transit stops as well as walking and biking paths. The commencement of the bridge construction is a first step in realizing these strategic planning goals.”

Celebration Pointe is a 125-acre, 1 million-sq.-ft. mixed-use development in the heart of Gainesville’s retail corridor. Along with more than 300,000-sq.-ft. of planned Class-A office space, Celebration Pointe will feature approximately 375,000 square-feet of a unique blend of entertainment and specialty retail, anchored by Bass Pro Shops and a national luxury-seating theatre, which will be the only one of its kind in the Gainesville marketplace.

The project will also feature a recently announced boutique Hotel Indigo, nearly 1,000 multifamily residential units and a mix of restaurants, most of which will be new to the market.

Pre-development site work for the project began in August to prepare the site for the necessary infrastructure improvements. Vertical construction for the initial phase ofdevelopment is scheduled to begin in mid-summer of 2015, with Phase I of the project scheduled to open in the Fall 2016.

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News

Walmart slows physical expansion in U.S.

BY CSA STAFF

A much anticipated acceleration of small format Walmart stores failed to materialize on Wednesday when the retailer announced plans to curtail domestic new store growth in 2016.

Walmart said it would open between 200 and 220 Neighborhood Market stores and 60 to 70 supercenters next year. Both figures are below the company’s projections for current year openings. Walmart said it will end its current fiscal year with 240 new Neighborhood Market stores, below the range of 270 to 300 opening that had been forecast earlier in the year. The number of supercenters that will open this year is expected to be 120 units, slightly higher than the projection shared at the beginning of the year.

As a result, Walmart said its capital expenditures in the U.S. would range between $6.1 billion and $6.6 billion compared to $6.6 to $6.9 billion during the current year. Total capital expenditures, including international operations, Sam’s Club and e-commerce, in 2015 are expected to range from $11.6 billion to $12.9 billion, below the $12.5 billion to $13 billion the company expects to spend this year which is below the $13.1 billion spent in 2013.

“We know that our supercenters are an important format for the stock-up trip, but we want to be thoughtful about our investment, ensuring that we align the space to evolving customer needs,” said Walmart U.S. president and CEO Greg Foran. “To do this, we will moderate supercenter growth in fiscal 2016. Our investment in Neighborhood Markets will go forward because they continue to show strong results across the box and they provide our customers with convenient access to grocery, pharmacy services, and other quick-trip needs.”

The reduced pace of supercenter expansion isn’t surprising as Walmart current operates 3,375 of the large stores, but Neighborhood Market is a different story. Walmart currently operates 428 Neighborhood Market stores and in prior meetings with analysts and during quarterly earnings calls the company has raved about the strong mid-single digit same store sales performance of the small format food and drug stores. In recent weeks, the company also implemented a new organizational structure which appeared to foretell of greater things to come for a concept said to be gaining share.

Offsetting the reduce pace of physical expansion, Walmart said it was increasing investment in e-commerce to a range of $1.2 billion to $1.5 billion, ahead of current year spending of roughly $1 billion and well ahead of the $400 million spent in 2013. Those investments will enable the company to build one million square foot online fulfillment centers in Georgia and Pennsylvania and new facilities in Brazil and China.

The increased e-commerce spending comes as Walmart failed to realize current year online sales targets. The company said current year e-commerce sales will total roughly $12.5 billion, roughly $500 million less than guidance for e-commerce sales of $13 billion shared last year at this time.

Overall, Walmart presented a fairly bleak outlook at its 21st annual fall investor conference which explained why the company’s shares tumbled $2.78 on Wednesday. In addition to the reduced physical expansion and less than expected online sales, the company said it is operating in a tougher sales environment than it anticipated a year ago. Consequently, sales for the current fiscal year are expected to increase between 2% to 3% on top of last year’s sales of $473.1 billion.

The rate of sales growth in 2015 has the potential to improve slightly, based on guidance the company provided at its meeting. Sales are forecast to increase between 2% and 4% next year resulting in the addition of between $10 billion and $20 billion in sales volume. However, at that rate of growth profits will come under pressure as Walmart said its operating expenses are expected to grow at a somewhat faster rate which in turn will cause operating income to be flat to slightly down in 2015.

Despite a number of worrisome disclosures at the meeting, Wal-Mart Stores, Inc., president and CEO Doug McMillon sought to reassure members of the financial community that the company’s prospects are bright.

“This is an exciting time for Walmart, as there are so many new ways to serve customers. Exceeding customer expectations has always been our goal, and we have short-and long-term opportunities to do that even better,” McMillon said. “We’ll change the mix of our capital spend next year to provide greater access, while continuing to focus on price leadership, service, and a broad assortment. We’ll give customers the choices they want and need in ways that only Walmart can.”

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