Evan Schuman's StorefrontBacktalk

Target (NYSE:TGT) has started a trial program with Facebook, where its customers get discounts on products on services that are pushed through the social network, if they buy them inside a Target store. Bafflingly, the effort prohibits users from using the program to work with Target.com, even though that would be the much easier and intuitive way for shoppers to use the service.

This is far from the first time that Target has talked up its commitment to a merged channel/omnichannel strategy, while delivering something that seems to force shoppers to stay in whatever channel Target is pushing at that moment. Consider the chain’s giftcard digital strategy deployed during last year’s holiday season.

The United States Securities and Exchange Commission (SEC) has approved a final rule allowing publicly traded companies to disclose “material nonpublic information” to the public through social media. In other words, if you have something you want to say to the public, instead of releasing a press release or putting it on your webpage, now you can comply with SEC rules by simply sending a tweet. But, as the Associated Press learned when its Twitter feed was hijacked, it’s not entirely clear when you send a tweet that it’s actually you who sent that tweet.

Companies spend a great deal of money to manage their social media presence, penned legal columnist Mark Rasch. They hire consultants and experts to craft a message that they will be putting out on Twitter. They monitor these networks for disgruntled customers and respond when customers mention their names. However, because of the inherent insecurity of social networks, companies need to do more to ensure that there Twitter feeds, Facebook pages and other social networking sites are secure. Otherwise, like the Associated Press learned, social networking can be decidedly antisocial.

The idea of retailers assessing customers’ value based on their social media influence—rather than what they personally spend—is not new. But the challenge of meaningfully figuring that out is still huge. American Airlines on Tuesday (May 7) announced that it was going to offer people who have a high social influence free access to its airport lounges. On the plus side, this is one of the first major programs to offer shoppers a concrete item of value (people pay a lot to join airline clubs) in exchange for having a high social influence number. The downside is that the company calculating the social influence number—a vendor called Klout—has taken the easy way out. It simply counts up the Twitter followers and Facebook friends (and other social media stats) and looks at forwarded Tweets.

It doesn’t take the next logical step and try and determine actual purchasing clout. For example, the most meaningful number would be how many dollars of purchases did that shopper’s Tweets generate? It’s nice if someone has a lot of Twitter followers and if they Tweet that the shoes on your homepage now are must-haves. But an influence rating needs to factor in what happened after that Tweet went out. Did it deliver 48 purchases of that product from the recipients of that Tweet?

One of the results of StorefrontBacktalk‘s being acquired back in December is that we are going to be expanding into coverage that goes beyond Retail IT into other areas of retail. The first example of this launched last week and is a daily newsletter and site called FierceRetail.

The site applies the same kind of perspective, analysis and bad jokes that StorefrontBacktalk has always delivered, but we can now explore issues way beyond IT. Consider our coverage of an unorthodox Apple patent, the reasoning behind the Sears Portrait shutdown, why Target’s Manatee mishap is a lot worse than it looked, Samsung’s real retail strategy, why Best Buy and Target’s Geek Squad alliance was doomed and stats showing Visa having all-but-cornered the debit market. It’s all free, of course. If you’d like to sign up, our latest thoughts will be in your Inbox early each morning.

Did Starbucks’ Groupon cup runneth over? The first time Starbucks (NASDAQ:SBUX) tried Groupon (NASDAQ:GRPN), on March 22, it got a good news/bad news joke. Good news: The campaign is going over extremely well. Bad news: Groupon’s page for the promotion crashed, angering a lot of customers and prospective customers.

The coffee chain’s first-ever daily deal offered a $10 giftcard for $5. The site indicates that more than 100,000 people purchased the coupon, but—like every other crash—there’s no way to know how many tried to purchase the coupon and couldn’t. Without knowing that figure, it’s hard to deal with the fundamental philosophical issue: Did the crash make the campaign do more harm than good? If 100,000 prospective shoppers saw the order, but 800,000 were frustrated by the crash and potentially alienated, the popular campaign isn’t necessarily a good thing for Starbucks.

A federal appellate panel on March 15 backed Walmart (NYSE:WMT), ruling that the chain had no need to train employees on when they should or shouldn’t call police after seeing customer photographs. The test case involved a couple who had their children taken away for a month, until a judge saw the actual photographs and the results of an examination of the children and then ordered the children to be returned to their parents and no charges filed.

The decision from the U.S. Court of Appeals for the Ninth Circuit also flagged to retailers their Achilles heel in such cases, pointing out that the parents’ case fell apart when they didn’t allege that the store associates had not acted in good faith. In other words, had there been evidence that the associates acted maliciously, things might have gone very differently for Walmart. The parents certainly wouldn’t have had difficulty establishing harm that resulted from the associate’s actions.

A recent dismissal of a class-action lawsuit against the LinkedIn (NYSE:LNKD) social network raises the question of whether anyone is bound to keep the promises they make on their website at all. If taken at face value, pens Legal Columnist Mark Rasch, the court’s dismissal means that companies are not bound to meet their own promised obligations but their customers are bound to comply with the Terms and Conditions of the website, whether they read them or not.

When LinkedIn premium customers Katie Szpyrka and Khalilah Wright learned that the website operator had been hacked, and that 6.5 million stolen LinkedIn passwords had been posted on the Internet (together with the user’s e-mail address), they went to sue LinkedIn for failing to provide adequate security and appropriate encryption for these passwords. Because users frequently use the same passwords for multiple accounts, stealing their LinkedIn passwords and E-mail addresses might expose a host of other accounts to compromise.

When it comes to softening up shoppers and making them more comfortable sharing personal information with retailers, nothing has done a better job than social media sites. Mobile devices, with their geolocation capabilities and continual beaming of “this is who I am” signals to anyone who chooses to listen, come in a close second. But a recent study has challenged that thinking. Understanding the nuances of how shoppers perceive privacy, what information they consider to be private and what incentives will work to make them give up data is crucial, whether it’s for a CRM (individual) strategy or to merely better understand shoppers in aggregate. With teen shoppers, the challenge is different. The tactic to get them to surrender a piece of private data has to start with understanding what they consider private. What Facebook and Youtube have indeed done is to make them think many of the most intimate details of their lives are not private. Hence, if you want their E-mail address, a one-time $5-off coupon may be all that’s needed.

This is explored in StorefrontBacktalk‘s March monthly column in Retail Week, the U.K.’s largest retail publication. The column lives here at Retail Week. For those who don’t have a Retail Week subscription—shame on you!—here’s a copy at StorefrontBacktalk. You can also check out all of our recent Retail Week columns here.

A federal judge ruled on March 5 that LinkedIn (NYSE: LNKD) is not obligated to compensate a pair of its customers who had sued following a LinkedIn data breach last year. Of particular interest to retailers is the customers’ argument that the social networking site had promised to protect customer data “with industry standard protocols and technology.” They then argued that the breach itself somehow proved such security was not delivered. The judge didn’t buy it.

No security system is perfect, so the existence of a break-in—on its own—doesn’t prove that security procedures were not followed nor that they were not appropriate. The case—heard in U.S. District Court for the Northern District of California in San Jose—raised several other arguments for customer seeking compensation for the breach, and the court shot them all down. To start the proceedings, the customers had to make a case for how they lost money as a result of the breach, given that it appears none of their personal information was ever used by the thieves.

If consumers make purchases both online and in brick-and-mortar store, you know a great deal. You have surveillance pictures of them in the store. You know what they purchased and what they looked at. You have browser information. If you subscribe to any of the dozens of data aggregation or marketing sites, you know whatever is shared. With “big data” you have aggregated this data, too. Now imagine if you had to tell each and every one of your customers exactly what you collected and what you did with that information. We mean everything.

That is already the law outside the United States and Canada, writes Legal Columnist Mark Rasch, and it may already be the law in those two holdout countries. It’s a matter of interpretation.

For years, conventional wisdom about privacy has been that shoppers—especially younger shoppers—have been consistently sharing more information online to the general public, a trend that would likely continue as privacy desensitization progressed. But a report released Tuesday (March 5) from Carnegie Mellon University found the opposite when it tracked 5,076 Facebook (NSADAQ:FB) users from 2005 through 2011, one of the most extensive studies of social media privacy yet.

“Over time, Facebook users in our dataset exhibited increasingly privacy-seeking behavior, progressively decreasing the amount of personal data shared publicly with unconnected profiles in the same network,” the CMU report said. The implications for retailers are stark, suggesting that many of the privacy strategy underpinnings on both retail and e-tail may be flawed. The report also found that those same consumers started sharing more information during that period, but only with people they assumed to be in a private group. And that sharing was expanded “both in terms of scope and amount of personal data.” For retailers trying to extrapolate insights from this report to apply to chain CRM and mobile programs, these two conclusions are frustrating.

The Twitter takedown of Burger King (NYSE:BKW) on Monday (Feb. 18), followed by an almost identical attack on Jeep’s Twitter account the next day, underlines a basic problem with social media: It’s almost never under a retailer’s control. It’s not just that interacting online with customers is inherently unpredictable. The key social media sites themselves—Twitter, Facebook (NASDAQ:FB) and others—are always under someone else’s control, and a chain is just another user.

That means when a retailer’s social media presence is under attack, the difference between being down for more than an hour (like Burger King) or just 10 minutes (like Jeep) can be a matter of setting up the equivalent of a kill switch—and that’s going to take some work.

Everyone knows the standard advice when someone—especially someone who works in IT—is about to be fired or laid-off, all of their passwords and systems access are shut off right before they’re told. You never know how people are going to react. Perhaps it’s time to expand those HR termination rules to also cut-off access to all company social tools, including Facebook (NASDAQ:FB), Twitter, Google+ (NASDAQ:GOOG) and LinkedIn (NYSE:LNKD). That’s a rule 257-store British entertainment chain HMV probably wished it had.

In late December, the chain was in the process of telling employees about extensive layoffs when one of those employees—someone who had password access to the company’s Twitter feed—began sharing her thoughts, such as: “Sorry we’ve been quiet for a long time. Under contract, we’ve been unable to say a word or, more importantly, the truth.” Then this matter-of-fact tweet: “We’re tweeting live from HR where we’re all being fired. Exciting.” One of her last tweets before all tweets from the company went silent was this delightfully predictive one: “Just overheard our Marketing Director (he’s staying, folks) ask, ‘How do I shut down Twitter?’” The best ideas always seem to come just a little too late.

Duane Reade, the largest drugstore chain in New York City, announced on Tuesday (Feb. 5) it would be trying an unusual mobile effort: It is participating in an elaborate Google mobile-fueled virtual reality game. At one level, this is just silly fun. But from a retail mobile perspective, a lot more is going on here. The game, called Ingress, is from Google’s Niantic Labs and involves hiding barcodes throughout the stores. From the chain’s perspective, is it about getting shoppers to walk inside its 250 stores? No, although the game certainly does that. Is it about getting shoppers to not merely enter but have to go deep into the store, searching through shelves of products to find the game barcodes? Yes, but that’s not the biggest element.

The real payback for Duane Reade, owned by Walgreens, is about changing customer mobile behaviors. In English, that means getting shoppers comfortable with scanning barcodes and interacting with the resultant data. It will increase participation in more explicit mobile programs. This will mean more price comparisons—which Duane Reade is confident it will usually win—and, soon, it will soften resistance to mobile payments.

Restaurant reservations Web site Open Table just paid $10 million to purchase the app developer Foodspotting, which enables people to take pictures of, well, food. The idea behind the synergy is that consumers looking to make reservations can not only read the menu but actually see the food presentation “in the real world” by looking at pictures taken by bona fide customers.

This continues a trend of technology empowering consumers, observes Legal Columnist Mark D. Rasch. It’s also a way for restaurants and other retailers to get themselves into real legal trouble if they’re not very careful about how they identify their use of this type of social technology.

Putting Albertsons back together again won’t be as easy as it looks. The grocery chain was split in 2006 between Supervalu and private equity firm Cerberus Capital Management, with both chains using the same logo in different geographic regions. But on January 10 the two owners decided to reunite what will now be a 650-store chain in a complicated deal that leaves only one thing very clear: These money managers aren’t thinking about IT when it comes to reassembling the chain.

Yes, the Albertsons logo is the same on both sides. But seven years later, everything from self-checkout to loyalty to POS to prescription systems is now different across the soon-to-be-unsplit chain. And everything will have to be merged—and fast.

We all love to get stuff for free. Whether it is a coupon, a sample or a trial, if it’s free, it’s good. For retailers, offering a freebie can get customers used to using their products or services, may engender goodwill and may be a smart business decision. But if those retailers fail to adequately define the terms of the free trial, pens Legal Columnist Mark Rasch, they may be setting themselves up for a disaster.

This holiday season, Rasch was walking through the mall seeking out the See’s Candies ladies with their free samples. “I would gladly take a chocolate lollipop or a toffee square, circle the mall and come back for another. The free sample came with no terms or conditions and no obvious limitations on access or use. Could I then argue that, because See’s was giving away chocolate lollipops, these items were ‘free’ and that I was, therefore, lawfully entitled to take six or seven boxes from behind the counter without paying for them? Absurd. But why? Because in the real world, we have loosely formed social conventions and a system of shaming to enforce them.”

If printed catalogs are dead, someone should tell E-Commerce customers. On Tuesday (Jan. 8), personalization vendor Baynote released the results of a holiday survey of online consumers that found paper catalogs still have a bigger influence on buying than social media sites Facebook, Pinterest and Twitter. And that’s not just among geezers who grew up with the Sears Wish Book—online customers age 18 to 24 also rated catalogs higher than anything except Facebook, where it’s essentially neck-and-neck.

Part of that may be a novelty factor—glossy printed material isn’t so much a part of young consumers’ lives today. But that only explains why catalogs might have some influence, not as-big-as-Facebook influence. Given that many chains completely dumped their catalog efforts in favor of social efforts in recent years, this is a genuinely annoying result.

As the founder of StorefrontBacktalk, I am thrilled to announce today that StorefrontBacktalk is now a member of the FierceMarkets family of B2B publications. FierceMarkets is a wholly owned subsidiary of the Questex Media Group.

Our voice and approach—for good or for bad—will not change, and we have been told to continue delivering the same mix of breaking retail IT stories, analysis and opinion columns. (Yes, and some truly awful jokes. It’s in the contract that those stay.) The bylines here will stay, as Frank Hayes, PCI Columnist Walt Conway, Legal Columnist Mark Rasch and the rest of the team will continue to do that which we do. Me, too.

When Amazon on Wednesday (Dec. 12) rolled out its Friends & Family Gifting program, what was most striking about the program is how virtually nothing was striking about the program. After all, this is Amazon.com, the master e-tailer who has brought us such hits as guessing religion based on giftwrap choices, how to exchange gifts in a truly new way and not charging until the gift is fully accepted.

This new program is bizarrely ordinary, offering functionality that Amazon—and almost all of its rivals—have offered for years. Could this reflect Amazon’s adapting to a new environment, where many of its longtime competitive advantages—such as sales-tax-free sales—are going away? Even its move into same-day delivery is not a differentiator anymore, with Walmart, Google, eBay and Macy’s toying with the same program.

Facebook went down for about an hour on Monday, apparently due to what Facebook said was “a change to our DNS infrastructure.” Like many DNS mishaps, the users who couldn’t reach the site were scattered around the world, as many could get through when their local DNS lookups updated. But in a heads-up for all of retail, Facebook’s mobile sites never went down.

Based on pings to both Facebook.com and m.facebook.com, Facebook handles load-sharing by routing (non-mobile) traffic to different servers, and that’s probably what the DNS infrastructure change they made had to do with. Because the mobile site was not using the DNS load-balancing—all those requests went to the same IP address—it didn’t suffer from the problem. This is exactly the potential advantage that retailers want to leverage for their sites. By keeping the mobile sites active—and, of course, available for desktop traffic too—it’s one additional level of security when the site has problems. Don’t forget that when the site goes down, a lot of in-store functionality can crash right along with it. The lesson is that you want a separate IP address for your mobile site, so you’re not putting all your IP eggs in one basket.

A University of California study has come up with a bizarre but intriguing finding: The sadder a shopper is, the more likely he or she will be to accept special offers that promise immediate returns. This is true “even when such urgency comes at financial cost” to the shopper, the study found. What makes this study persuasive is that it tested another negative emotion, in addition to neutral emotions, and found that those shoppers made much better financial decisions.

Before retailers start taking down the happy Santa videos and replacing them with films about dying puppies, let’s drill down into what the study actually found. (OK, you can show one of the puppy videos, but not the one with the beagles.) The study, from the University of California Riverside’s School of Business Administration, offered participants various levels of Amazon gift certificates, with some of the awards being given immediately and larger payments delivered later.

A little late October housecleaning here at StorefrontBacktalk. First, a quick reminder: StorefrontBacktalk now has five free Monthly newsletters, each one focusing on a different key area for you: E-Commerce, Mobile, PCI/Security, In-Store and CRM. The Monthlies—see the descriptions here—are available to anyone via a quick E-mail sign up and the November monthlies will publish next week.

The Monthlies are a great way to catch up on all the news in a given area. So before you miss the November Monthlies, sign up for your free copy—and remember, you can sign up for multiple topics. Finally, a quick thought for Kindle users. For those of you who have not yet subscribed to our Kindle feed, it’s not bad for convenience while traveling. You’ll get the latest on retail tech, E-Commerce, mobile and security beamed into your Kindle when you’re not looking.

Kraft Foods, the $19 billion consumer goods company, has been trying to understand the relative consumer-reach powers of NFC and QR codes to see if either is going to resonate more with mobile shoppers. Its answer: Run shelf tests at five San Francisco-area grocery stories showing both NFC and QR to consumers and see what happens.

As the owner of brands Kraft, Maxwell House, Oscar Mayer, Nabisco, Planters and JELL-O discovered, NFC was the winner. NFC’s engagement level was a dozen times greater than QR codes, and engagement time was 48 seconds for NFC compared with 5–10 seconds for QR. But NFC excludes many older phones and—crucially—all Apple iPhones and iPads. For many reasons, that’s a dangerous segment to ignore.

In a case that may have profound ramifications for retailers’ ability not only to collect but also to protect the privacy of customers’ location information, the U.S. Justice Department argued to a U.S. appeals court on Monday (Oct. 1) that Americans do indeed have no right to privacy when it comes to mobile phone geolocation data. This comes about two months after a different appellate court reached the same conclusion, ruling that Americans have no such privacy rights.

If there truly is no expectation of privacy in what is called “historical cell data” (where you were, as opposed to where you are right now), then there would be no problem with retailers’ collecting this data about their customers with or without the knowledge and consent of those customers, pens Legal Columnist Mark Rasch. Just as video cameras in the mall capture images of customers (and their locations), retailers could use cell data to find out where their best (and worst) customers are. Accepting the government’s argument before the federal court, there would be no privacy violation for a retailer doing this.