Evan Schuman's StorefrontBacktalk

Here’s one for the marketing ethicists out there (is “ethical marketing” an oxymoron?): 18-year-olds come into the retail CRM world as clean slates, even if they have been active E-Commerce and M-Commerce shoppers for eight or nine years. It is illegal to solicit or sell data about children younger than 13—and what can be collected and used about those aged 13 to 17 is highly restricted. When that veteran shopper turns 18, though, can all of his or her juvenile shopping history be sold or even used?

One online payment vendor is preparing to sell tons of youth purchase data—apparently, this is the first time anyone has tried—avoiding immediate legal problems by offering the data in aggregate.

What if having wireless in-store access isn’t really that important? Retailers’ efforts to make sure customers have constant Wi-Fi access—to fuel mobile functions such as barcode scanning, demo watching and, potentially, even mobile wallet efforts—has certainly proven problematic, whether the reasons are wireless-unfriendly old buildings or young shoppers gulping all of the bandwidth with movies or games.

Beyond encouraging shoppers to use over-the-air access that chains need do nothing to facilitate, what if apps used the mobile device’s memory to play those demos and to look up those barcodes, and then waited to update until the device was reconnected? Shopkick is using one version of this modified store-and-forward mobile strategy, as of an update deployed last month.

Who cares about Big Data? You should. All of a sudden, Web logs that were kept simply for troubleshooting purposes can now be mined to determine valuable information about customers’ preferences, writes Retail Columnist Todd Michaud.

Logs that are created by physical machines can now be analyzed en masse to look for information to help advance a business. Data from social networks can now be mined for customer sentiment. These problems were too big and too complex before. But now, answers are within reach.

With more than 3,000 stories, columns and GuestViews in the content database here at StorefrontBacktalk, we thought it was time to do a little upgrading. Starting this week, readers (both free and Premium) can search for stories by limiting the search to just the story’s headline—as opposed to the headline and the full text. (Note: Right below the search bar, readers can choose HED Only or Story And Hed.)

The ability to isolate a search to the headline can be useful in two ways. If you happen to remember that the headline mentioned Target, for example, you need not see every story that mentioned Target (or even used the word “target”). The second way is practical. If you want a story that is primarily about tokens—and not a story that merely mentions the word somewhere—the headline-only search can be helpful.

What Google, PayPal and ISIS are trying to assemble in mobile payments, MasterCard wants to dismember. On Monday (May 7), the number-two payment-card brand unveiled a mobile wallet and an E-Commerce payment system that are designed to cut out any middlemen horning in between customers and retailers and payment networks.

Ironically, while MasterCard’s PayPass Wallet for NFC-equipped phones got most of the attention, that’s still largely a pipe dream—MasterCard hasn’t even talked any mobile operators into giving it access to the NFC chip. But the online payments effort will offer tokenization to reduce PCI scope for E-Commerce. The bad news: You can probably forget about any interchange relief.

In a series of mobile trials in subway and train stations in Philadelphia and Chicago, online grocer Peapod has been trying to drive sales of milk, diapers and dog food to commuters with a few minutes on—and a smartphone in—their hands. The trials had to deal with mobile technologies with a very uncertain future—such as QR codes—and the frustrating logistics of demoing in cramped public transportation centers.

Peapod got the idea from a wildly successful mobile QR trial that Tesco did in South Korean subways. Peapod’s attempt is apparently the first to try and replicate the Tesco efforts in the U.S.

As E-tailers continue their incursions into rivals’ physical stores, the only viable defense is to radically upgrade customer service and the overall store experience. Two of the retailers most known for this are Apple and Walt Disney World Resort. Have you ever heard of an E-Commerce site cutting into the revenue at Disney? What specific tactics can brick-and-mortars steal? Here’s a good one: Disney this month is experimenting with an RFID/iPad combo to upgrade its famous FastPass system—for letting people reserve tickets/times and thereby get much faster access to rides and events. As Disney employees carry iPads, customers’ RFID bracelets will interact with CRM and ride information.

It’s fair to argue that Disney has always been the retail exception. It pushed contactless payment by offering deep discounts, and Disney even successfully got customers to use digital biometrics (fingerprints) for park access. But that’s just the point. With a heavy enough emphasis on experience and customer service, shoppers are willing to do almost anything, including—just perhaps—forgetting all about Amazon.

Retailers spend an awful lot of time and money gathering and analyzing online and in-store stats about customer behavior. But what most seem to not do is try and connect the dots.

What did the shopper do right after scanning that barcode? If the answer can be found in mobile analytics data, you’re fine. But if the answer can only be found by overlaying that mobile data with in-store CRM data, most won’t see it. What about synching E-Commerce activity with calls to the call center two minutes later? Or linking an E-Commerce search to an in-store POS action 20 minutes later? How about social activity matched with any of the above?

Here’s your wacky legal strategy idea of the month: Settling a mostly frivolous multimillion-dollar lawsuit can be such a great CRM data generation mechanism that companies might consider filing such class-action suits against themselves. One recent class-action settlement delivered more marketing value to the defendant than it could have ever hoped for, pens Legal Columnist Mark Rasch.

That defendant is using the litigation to collect consumer information. It is learning the names, addresses, E-mail addresses and some purchasing habits of not only actual consumers but, presumably, about people who never bought the product and yet are interested enough (in either the product or the $20) to lie about having bought the product. There doesn’t appear to be any limitation on how that information can later be used for marketing.

When Walmart launched its E-Commerce cash program on April 26, did it open the door to evil-minded rivals by giving them the means to falsely lock up merchandise? That is just one example of the many implications behind Walmart’s move to enable people to use cash to make online purchases.

Beyond new security holes on the risk side, the reward side is equally huge. While everyone seems to have focused on the general unbanked audience, a much more interesting prospect for this program is teenagers. Plus, this is sort of an anti-showrooming move, where online shoppers are being lured into the stores. Revenue sharing between Walmart channels is also a point of nervousness with this program. And a store’s inability to cancel such online orders—even if the customer then finds the item on the shelf—is problematic, too. This is a rare example of the kinds of compromises—between online and in-store operations—chains must make these days.

The challenge of giftcards has always been getting customers to remember them when they’re actually near the store where they can be used. With that goal in mind, a giftcard service—working with Gap and Sephora—is trying for a marketing triple play: mobile geolocation on top of Facebook data on top of customized giftcards. When a customer is near a retailer whose giftcard they have, it will loudly flag that fact to the customer.

The geolocation opt-in alerts are an interesting twist, especially when a consumer is walking in a city (locally or when traveling) and has no idea that a particular retailer has a store three blocks to the right.

When Wal-Mart announced Monday (April 16) that it was nominating Google exec Marissa Mayer to its board of directors—indeed, it was expanding the size of the board so she could be added—the retailer telegraphed an awful lot about its thoughts on social media, merged channel and, in particular, mobile.

It’s striking, though, how much of a contrast the 36-year-old Mayer makes compared with the existing members—with an average age of 60, the board is heavily weighted with CEOs of non-tech companies, venture capitalists and Wal-Mart veterans. The board seems to be acknowledging that it may not be the ideal group to oversee Wal-Mart’s moves into the worlds of Twitter, Facebook, YouTube, geofencing and Foursquare.

When Sephora, the global cosmetic chain, updated its Web site on Monday (April 9), it made some very impressive tagging decisions to enable personalization at the age and makeup ingredient level. Below the stats the 300-store chain released—such as that each product will now be tagged with 25 different characteristics and that this tagging took 50 people 5,000 hours to complete—is the obvious in hindsight observation that a 16-year-old girl is probably not interested in seeing the same cosmetics that would appeal to a 70-year-old woman.

The goals of hiding different things—say wrinkles versus pimples—would suggest different products, as would skin tone, hair color, eye color, lighting (office versus nightclub) and even clothing. Sephora will also enable searches by ingredients—for consumers who are allergic to specific chemicals—and fragrance. (It also enables search by price, but Sephora doesn’t get any brownie points for that.) And although it certainly helps the customers find the right product, it does even more for CRM files. Age, hair color, allergies and full cosmetics preferences? Welcome to CRM heaven, cosmetics-style.

For retailers thinking about ways to use mobile data, the U.S. Federal Trade Commission on March 26 made things slightly more difficult. Mobile geolocation information has now officially been categorized as “sensitive data,” right alongside medical records, info about children and Social Security numbers.

That means the government will ask for—and Congress might insist on—extensive additional limits on using and even collecting such data. If a chain is going to collect specific geolocation data, the retailer needs to do more than inform those shoppers, said Peder Magee, an attorney in the FTC’s division of Privacy and Identity Protection. “You need to ask for permission,” he said.

Retailers everywhere are finding themselves being hit upside the head with big data. This data is generated by their internal systems, external systems and end customers, and it’s growing at exponential rates. Quietly, this trend is going to add a new player to the corporate ranks: the Chief Data Scientist.

Organizationally, these functional experts will challenge the traditional organizational structure. Data scientists will likely enter an organization through the IT group, because that department is most likely to engage their services to help drive value from information mining projects, pens Retail Columnist Todd Michaud.

When Best Buy wrapped up a planned 17-hour site outage on Wednesday (March 28), it came away with more than an updated E-Commerce system. The retailer learned the downside of tight merged channel integration and what happens when in-store becomes too dependent on online operations.

As Best Buy itself said: “While the updates are occurring, customers will be unable to search or browse products, place orders or check order status on BestBuy.com, m.bestbuy.com (mobile or tablet), BestBuy.com/espanol and store kiosks.” Customers also “will not receive E-mails regarding orders while the updates are in progress” and checking order status—plus, of course, making online purchases—”will also be inaccessible to store employees, call center agents and online support representatives.”

With today’s overwhelming focus on digital goods, why on Earth would a chain choose to physically send giftcards through the mail anymore? Answer: It’s arguably the last reliable—and consistently legal—way to get customer addresses.

Ironically, it’s Starbucks—which was one of the first to try mobile payment and intrinsically understood the social media concept years before Facebook launched—that has embraced sending giftcards (for customer birthdays, which is another clever CRM touch) through the hail/sleet/dark-of-night people. This issue actually combines two marketing devices popular throughout the 20th Century: snailmail and plastic giftcards/loyalty cards.

Information security programs are notoriously difficult to implement. They are likely to cost money or negatively impact business operations or both. Business leaders want to think about making more money or reducing costs. Info-sec projects typically are sold on the “risk avoidance” platform, which is not the best political platform to be campaigning on.

A month after you pitch, writes Retail Columnist Todd Michaud, you’re back, and the marketing chief is talking about how your brand needs a new, leading-edge loyalty program. You offer up that there is new technology in place that will enable your brand to create a loyalty system without forcing customers carry another plastic card, tag or smartphone application.

Gap last week ended a 2-week trial on a geofencing mobile ad effort, one that reinforced traditional billboard ads with mobile messages displayed to people standing right beside those ads. In some cases, those ads were right in front of Gap stores, and therein lies untapped mobile potential.

The initial test used the shopper’s physical location, but no other personal data (such as purchase history, other apps on the phone, Web search logs, personal demographics). However, personalization will likely be the subject of upcoming trials, said Dave Etherington, the SVP for marketing and mobile at Titan, the advertising firm that executed the Gap trial.

Sears is not using technology to spot loyalty customers walking into some of its stores. On Tuesday (March 12), The Wall Street Journal reported the venerable 2,700-store chain is doing that in its Woodfield Mall store near Chicago. By the next day, the story had been tweaked: The store “might soon” do that. A Sears spokesman was more blunt: “We do not have that functionality,” he said.

But Sears clearly wants it—like Neiman Marcus and every other big retailer. The challenge now isn’t doing it, but figuring out how it can fit in with what customers expect.

Retailers are using mobile all wrong. How about using the physical stores to save sales that were abandoned online? Why not, asks Retail Columnist Todd Michaud, use mobile as the bridge between online and brick-and-mortar? What if an apparel chain used its online shopping cart to pull a set of clothes for shoppers to try on in the fitting room of their local store at their convenience?

What if the customer could tag an item in the retail store so that it automatically was added to their online shopping cart for future purchase? This would enable people who like what they see to purchase it later. “Honey, I really like the looks of this new washing machine, but wanted to let you check it out before I purchased it.”

The latest Wal-Mart social acquisition—one where it grabbed “the technology of” a 4-year-old Facebook app called Social Calendar—creates the potential for Wal-Mart shoppers to not only be reminded of Aunt Bertha’s birthday but have gift ideas based on Aunt Bertha’s social media activity together with her purchase history. Walmart.com will send these gifts to its customers—or to Bertha directly—with one-click speed.

That ability, plus new detailed maps to customers within Facebook, and Wal-Mart has bought itself quite a gift. The magic comes when those millions of gift-giving events—birthdays, anniversaries, weddings, graduations, baby showers, etc.—are merged with Wal-Mart’s new social media files and its not-so-new customer purchase histories.

In the same month that Home Depot is moving its PayPal mobile-payment process chainwide, the home improvement superstore—along with more than a dozen of the world’s largest retailers, including Wal-Mart and Target—is signaling its dissatisfaction with all of the current mobile-payment options by agreeing to fund an alternative. This retailer-owned effort has a lot of dollars to make its dreams come true, with more than $20 million pledged and more than a trillion dollars in combined revenue to funnel to the preferred approach.

But the group has the same hurdles that have weighed down so many industry consortium: potential infighting among the leading players; legal obstacles; the need to build a massive infrastructure, given the intent to shun current networks; and the tech questions, such as whether this new approach will have any better luck at mastering security than today’s efforts.

Neiman Marcus is testing a new iPhone loyalty app that the luxury chain hopes will finally turn a longstanding desire of retailers into reality: the ability to know when the chain’s best customers walk through the door, and to match those customers up with the right sales associates.

Retailers have been trying to get that right for years, using a variety of technologies. But if Neiman Marcus’ approach works, it may mean that associates and store managers will have to exercise much more discretion and discipline—and that chains will have to change they way they hire associates.

On your list of must-haves for a new retail technology, application functionality is essential and ease of use is great. But the absolute top requirement should be the portability of the system’s data, pens Retail Columnist Todd Michaud — even if you don’t need that portability today.

Being able to move data around your enterprise gives the most flexibility in using that data, and data portability also future-proofs your system by letting you bolt on new technology quickly instead of slowly and oh-so-carefully making changes to what you’ve already got.