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.

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.

It’s you versus the sales guy in an epic battle over your IT career. The sales guy has a polished presentation about the features and benefits of his products and services. You have a status report. The sales guy has access to unlimited resources to make your business partners’ wildest dreams come true. You have one really great guy who you’ve overworked to the point that you carry a ton of personal shame.

The sales guy says, “Yes. Yes. Yes.” You say, “No. No. No.” In this surreal world, pens Retail Columnist Todd Michaud, you are watching your hard-fought IT career be dismantled by an onslaught of companies that shake your hand and look you in the eye as they pitch your demise one product and service at a time. And you had better buckle-up, Buttercup; it’s only going to get worse.

For a half-dozen years, retailers have been struggling to find a way to make mirrors work as an in-store-to-Web sales device. Bloomingdale’s was one of the first. Its idea was to let a shopper model prospective new outfits to the mirror, which would then transmit the images live to the Web and allow comments from total strangers or a smaller group of logged in friends.

Seems that it missed the fun social elements of physically shopping together. This week, it was British department store chain John Lewis’ turn.

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.

Why is it that the same people who will easily spend hours playing Angry Birds each week won’t spend an extra hour improving their retail operations? Saving money just isn’t sexy or fun. It’s boring, and that’s the biggest problem.

After many years in retail operations, Retail Columnist Todd Michaud is still surprised how little traction well-developed back-office applications receive. You would think that saving money on inventory, labor or marketing expenses would be all the motivation that a retail owner or general manager would need, but that rarely seems to be the case. That got Michaud thinking about some of the new social applications, like Foursquare, and what makes them successful: Gamification.

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.

Empowering retail employees is certainly a wonderful thing, and nowhere is the potential for empowerment more explicit than with social media. But that cuts both ways, as it also enables one or two careless employees to do more damage to the brand than would have ever been realistically possible before. Consider this month’s stunner from KFC.

As has been widely reported, someone in the chain’s Thailand operation saw the 8.6 magnitude earthquake hitting northern Indonesia as a marketing opportunity and posted on the company’s Facebook page: “Let’s hurry home and follow the earthquake news. And don’t forget to order your favorite KFC menu.” Beyond the marketing disconnect (other than a tie-in of “disaster for your health” compared with “disaster for your planet”), the odd phrasing (does KFC Thailand have multiple menus and consumers have their favorites? Wouldn’t it be “order your favorite item from KFC’s menu?”) and the big bucket of a lack of sensitivity, this post raises a fundamental social media issue. Does the ease-of-use mean that chains have to remove all approval efforts for marketing messages? Five years ago, could a few employees have done this much damage so easily?

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.

The collision between in-store, mobile and social is generating some wild and bizarre promotional ideas that go way beyond sales, coupons and loyalty programs. And those experiments risk lackluster results. (How many sales are rung up because of those Shopkick scavenger hunts, anyway?) But Microsoft’s ill-fated foray into unusual in-store marketing this week demonstrated that if a promotion is badly enough conceived, it can actually generate negative results.

In fact, Microsoft’s effort produced a bad-results hat trick: It didn’t drive more store (or mobile or online) traffic, it wasted time for both store associates

Nordstrom found itself paying nearly $1.5 million last year in a scam that was ironically made possible because the chain had banned two brothers, and then compounded the problem with what Nordstrom described as “a lapse in communication” with an affiliate. The retailer’s system for blacklisting lost-package fraudsters worked fine. So did its system for sending commissions to affiliates. But no one ever realized that the two systems might someday interact. After all, why would a blacklisted fraudster keep trying to order online, knowing the order would always be blocked? How likely was that?

And the thing that made the systems interact was something that Nordstrom’s software developers had no control over: the homegrown system that the affiliate site used to handle Nordstrom orders. That’s what couldn’t be tested until a problem actually showed up.

Wal-Mart, looking to stage a promotion to hawk about two dozen pieces of merchandise based on the absurdly popular Angry Birds mobile game, wanted to offer specific clues about how gamers could jump to higher levels. And it wanted those hints only available at Wal-Mart stores, hidden within the very fabric of those items.

It’s a powerful idea, but it has some serious limits. First off, Facebook, Twitter and tons of gaming blogs will see to it that the need for Birds fans to go into a Wal-Mart and hunt around will likely only last a day or two. After that, the full sets of clues will be published by early fans (the store campaign begins March 25) and the incentive will quickly diminish. Suddenly, the advantage of Wal-Mart versus rivals disappears.

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.

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.

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.

Due to the (strange? pyschotic? drug-induced?) unusual policies at Amazon, publishers have no idea who their Kindle subscribers are. That puts us here at StorefrontBacktalk in the awkward position of having to make a plea to our Kindle subscribers: Please reveal yourselves, and tell us how you find the Kindle subscriptions. We’re considering some changes to the service and any customer feedback goes to Amazon—and it’s not sharing. Therefore, we’re begging for whatever feedback you want to share to please share it with us directly.

For you Kindle people who have not yet subscribed to our Kindle feed, it’s not bad for convenience when traveling, when you’d like the latest on retail tech and E-Commerce beamed into your Kindle when you’re not looking.

One of the worst parts about managing retail businesses is dealing with unknown future returns. Is that booked revenue all real? You can certainly know that, statistically, XX percent will be lost to returns. But is it possible to know more specifically?

What if your system could look for hints about specific purchases that could be flagged for likely returns? Perhaps a customer who purchases three of the identical shoe, but each one in a slightly different size?

As retailers try and encourage customers to play with social any way they can, they run the risk of not only funding incentives that might yield little of value but alienating shoppers to the point of legal violations. (That’s right. You should flinch.)

The problem, then, for retailers attempting to enter the social networking space is whether they plan their strategy and miss new opportunities or allow that strategy to be random and chaotic and to create a host of potential legal problems from copyright infringement to defamation and potential privacy law violations, pens Legal Columnist Mark Rasch. How so? Let’s start with copyright infringement.

In our attempts to battle the never-ending assaults by Spammers, StorefrontBacktalk had to do something this week for which we need to apologize. Our direct discussion forum—Go Beyond The Story—was recently overrun by Spammers. To make the forum useful, we had to wipe out existing users. We then put in place much better security. Now, we are asking our readers who had signed up for accounts in the forum to please sign up again.

We have also cleaned up our discussion forum on LinkedIn. If you want to jump into a discussion on our LinkedIn page, you simply need to first join the StorefrontBacktalk group forum. For you Facebook fans, we have also reactivated the StorefrontBacktalk‘s Facebook page. We love when people comment on the stories, but we need to insist that only comments relating to a story be posted to that story. For comments that do not directly relate to a story or column, the Go Beyond The Story forum is home. And we want it to be a noisy home, with lots of loud arguments and shouting. That’s how retail discussions are supposed to be.

When stories hit last week pointing out that several major chains—including JCPenney, Nordstrom and Gap—had killed their Facebook sites due to insufficient new revenue, some started questioning the value of Facebook and social media in general. It was a wonderful example of drawing the dead-wrong conclusion from research.

Those Facebook sites died because they were based on a flawed understanding of what social media is all about. It’s not about creating a storefront or a virtual watering hole where customers gather to sing your praises. Those retailers already have that: It’s called a Web site.

A woman walks into her local Wal-Mart and immediately turns to an area near the front of the store with a bank of screens. This customer is rushed today, so she tells the system to forget the recommendations and she selects 24 items from her shopping list.

The items that are on the shelf elsewhere or in the backroom? An employee goes to fetch them. Those that are not in-stock at that store? They’ll be shipped to her home. This is where Venky Harinarayan, Wal-Mart’s Senior VP for Global E-Commerce, head of @WalmartLabs and venture capitalist extraordinaire, sees the world’s largest chain headed.

At just about every major chain, employees have agreed to lengthy nondisclosure agreements, whereby they have agreed not to “disclose” any “confidential information.” The problem is that most employees don’t think of updating their LinkedIn profile as a disclosure. Even more significantly, they don’t think of a lot of their day-to-day operations as confidential information.

Nowhere is this more true than with retail IT talent, talent that is marketed by touting the various applications people have worked on and the specifics of problems they have solved, pens Legal Columnist Mark Rasch. In LinkedIn, all of those apps and problems/solutions are located right next to their employer’s name.

When it comes to loyalty, many retailers are stuck in the 1990s. Does anyone else find it funny that in a world where you can very easily have a video conference with your kids from a $500 tablet over free Wi-Fi from a random hotel, we’re expected to keep a 3.3- x 2.2-inch piece of plastic in our wallets to get benefits from some of our favorite retailers?

All of this, pens Retail Columnist Todd Michaud, in an area—such as CRM—where the application of technology could directly impact a retailer’s top and bottom lines.