VSN

“Omni” What? It’s Da BOMB

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IN MY MEANDERS around the vibrant NRF Expo hall (#NRF12) in New York this month, I tried my best to spot the visible stars of the show and detect the invisible three-degree background radiation that lurks behind the retail firmament.

The atmosphere was energized, the crowds were large and buzzwords were flying. Shopper insights swirled in the cloud, mobile technology hype charged the atmosphere, and business intelligence oozed out of every software booth into glowing puddles on the Javits Center exhibit floor.

Ultimately there was too much for one greying, recovering journalist to absorb. This is surely why I wound up at the bar in Manhattan’s Landmark Tavern one evening with a group of senior retail business writers (a.k.a.,”ink-stained wretches”) who gather each year to drink beer and tell lies.

The BSQ 

We talked about how NRF has become primarily a retail operations exhibition, and how that had evolved to be primarily about software solutions. Egged on by my fellowship of professional cynics and emboldened by many lagers and stouts, we began evaluating the first day’s bullshit quotient. The BSQ is a pretty simple ratio – buzzword repetition divided by genuine new ideas. (This is a party game only old journalists could love.)

The buzzwords were easy: “Insights” (every retail software solution promises better ones); “Analytics” (every retail software solutions promises faster ones); “Business Intelligence” (how every solution promises to deliver the insights and analytics); “Big Data” (what results from gathering so many insights and analytics); “Cloud” (the place in cyberspace where every vendor proposes to house its Big Data); “Dashboard” (a screen where retail practitioners are supposed to want to access their BI); and “Omni-Channel” (a state of retailing where online commerce coexists with mobile commerce and bricks & mortar, empowered by – you guessed it – insights, analytics, Big Data and BI).

As ever, the genuine new ideas were harder to detect. “Performance Management” may be a good one (the quaint notion that retailers might want to measure the outcomes of their insight-driven plans to see if they are really paying off). “Retail Industry Creates Jobs” is another, presented as a core theme by the NRF itself.

Readers familiar with basic arithmetic will quickly reason that for the umpteenth consecutive year, the BSQ on the exhibit floor was off the charts. The principle factor here is buzzword repetition, which drives the numerator toward infinity, while really genuine new ideas to pad the denominator are rare indeed.

Da BOMB
There is a lot to say about each of the major buzzwords and concepts that enlivened the NRF Expo. Right now let’s focus a little on “omni-channel retail,” which is recent nomenclature for an idea that has been around for quite a while. As far back as the dot-com boom in 1998 we began discussing the interplay between virtual and physical stores, catalogs, kiosks and call centers. By 2000 we identified several multi-channel players – like Eddie Bauer, and JCPenney – who had succeeded admirably (we thought then) in melding online, offline and catalog businesses to the benefit of shoppers.

The “shop anywhere, buy any where, return anywhere” principal was captured in the final edition of VStoreNews, where we labelled it “Broadband Merchant,” re-purposing a popular adjective. By then much of the industry had adopted “multi-channel” as the nom de jour.

At NRF this month, alot of folks were calling this “Omni-Channel,” I think because of the stunning influence of mobile technology within the mix. We can (and will!) argue long and hard about the appropriate understanding and application of mobile technology in retail, but for now let’s just stipulate that mobile is colossal in its influence. Explosive even.

Which is why I’d like to humbly offer an “omni” alternative. Call it BOMB retailing – Blend Online, Mobile & Bricks into a single entity where every channel shares a common information platform and consistent shopper interface. One brand, one shopper relationship, one inventory, one set of service standards, many moving touchpoints.

Surely after 14 years on the interweb machine, the omni-present, omni-channel, but hardly omniscient retail industry is ready to blow up the status quo.

© Copyright 2012 James Tenser

The Epsilon Imperative

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CMOs: Is your brand in the crosshairs?

IN WHAT SOME observers say was the largest breach of consumer data in history, this week servers at Epsilon Interactive, a database services company based in Irving, TX, were compromised by hackers, exposing the names and email addresses of millions of American consumers to the spam-o-sphere.

Within hours, alerts hit my personal inbox from Kroger, Target, Walgreen and HiltonHHonors informing me that they had been struck and that one of my addresses was now in the wild. Why did these gigantic companies have my email address stored in Epsilon servers? Simple. I am enrolled in their frequent shopper programs. And until now, Epsilon was as reputable and secure a place as you could get to host your customer data.

Which partly explains why the 50 or so huge retail and consumer-facing companies whose customer email lists were exposed by this attack include the likes of Best Buy, HSN, CapitalOne, Citigroup, JPMorgan Chase, Marriott and TiVo. These companies depend on email communications for the inexpensive delivery of relevant messaging and offers to their customers. Now each of them has been forced to warn their customers about the potential for spam and phishing attacks. By email.

The implications of this are quite chilling, and should give pause to every Chief Marketing Officer and Chief Customer Officer charged with the custody of shopper relationships and brand equity. Shareholders had better pay attention too. This, my friends, is your first early warning. I call it the Epsilon Imperative.

First, the good news
It could have been worse. While the data quantities are vast, and the affected brands are iconic, at least the damage was limited to names and email addresses, we are told. Wholesale identity theft does not appear to be a great direct risk, although enterprising list dealers and data miners will be tempted to merge the email address tables with other lists, thus creating more complete profiles for future exploitation.

And the email notices I received came fairly promptly. Well, one from McKinsey Quarterly arrived within hours of the media alert on Saturday. Walgreen and Fry’s (Kroger) got their notices to us later the same day. Hilton and Target waited until after the weekend. (OK, timings of the last two are really not that impressive, come to think of it.)

The positive take-away is that most of the frequent shopper/guest list owners exhibited some consciousness of responsibility for the incident, even though it was caused by an outside criminal act against a third-party service bureau (Epsilon). They acted promptly, recognizing that shoppers and guests must be made to feel that the brands have their best interests at heart. Failure to inform would be a lapse of good faith.

Why marketers should care
While preserving public confidence and brand equity are major concerns, this is only one factor for top retail and hospitality executives. Another, less-understood implication is legal regulatory exposure. This is an area that evolved rapidly following the notorious TJX data breech of 2005, which exposed 46 million credit card numbers but did not come to light until 2007.

California led the pack with the first security breech notification legislation in 2008. But the model for this legislation came not surprisingly in the state of Massachusetts, where TJX is headquartered. At least 46 other states followed with their own versions.

The Massachusetts General Law titled, “Standards for Protection of Personal Information of Residents of the Commonwealth” (Chapter 93H), defines a comprehensive set of data security obligations on businesses, including the development and maintenance of a “comprehensive written information security program.” Deadline for compliance with this law was Mar. 1, 2010.

Several legal scholars have observed that the Massachusetts law would apply to every company who has even one list member residing within the state. It also sets the best practice standard for written information security programs. Since modern ecommerce is “borderless,” many companies will be subject to such oversight in every state.

This means that any company with a direct marketing or frequent shopper list that fails to prepare and maintain a private data response plan may be exposed to dozens of lawsuits imposed by state attorneys general. Legal fees and fines can spiral out of hand, and the secondary damage to brand reputation may be multiplied along with it. It seems that loyalty programs just got harder to operate.

Protect your shoppers – and your brand
What can a responsible marketing executive do to protect customers and company from the cascade of negative consequences that may result from the inevitable data breech? Maintaining state-of-the-art data security measures and the comprehensive written information security program are certainly essential. CIOs worldwide work feverishly at data security, but it’s up to the CMO and CCO to protect brand and customer equity by ensuring that sound response plans and practices are put into place.

A great many consumer-facing businesses consider loyalty and relevance-based marketing to be essential competitive activities. Shoppers and consumers have come to expect the personalized services and rewards promised by these programs. Firms depend on their customer databases to deliver crucial insights that enable efficient and well-targeted marketing programs.

In light of the Epsilon event however, retail and hospitality CMOs and CCOs now face a new imperative. They must confront new questions like:

  • How is the consumer’s perception of our brand affected now that their information has been violated?
  • Is the value of our brand and customer equity negatively affected by a data breech? How bad is the damage?
  • Are we prepared to demonstrate our diligence to our customers and card holders by mobilizing rapid notification and protective actions?
  • What compensation can we provide to the consumer for their discomfort, angst, worry?
  • Can our forthright response turn a data breech into a service recovery opportunity so that we gain trust, not lose it?

In today’s world, the relevant question regarding data breeches is not “If?” but “When?” Set against the emerging legal backdrop of state and foreign regulations, this means loyalty and direct marketers must maintain a dynamic preparedness and response plan that can be instantly triggered in the event of a negative event. This is a capability few companies have today, but one that all should acquire.

© Copyright 2011 James Tenser

Social Media? – Nah, It’s Personal

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New way to a shopper’s heart?

ALL THE RECENT chatter about “social media for business” is driving me around the bend.

For some time now, I’ve been searching for a terminology that would rescue us from imprecision and allow a meaningful business conversation to take place around the impact of smart phones within the retail environment.

At the National Retail Federation Conference and Expo two weeks ago in New York, the presentations and pitches frequently turned to the impact of social and mobile media, and I kept cringing every time I heard it. Here’s why it bugs me so much:

When new business phenomena have arisen in retail marketing, sloppy terminology frequently led to poor initial understanding of the business opportunity. Often it is due to a choice of words laden with confusing prior connotation – or the absence of a suitable term.

We sometimes used “consumer” and “shopper” interchangeably; now we distinguish between those two customer roles. We spoke of “manufacturers” or “vendors” before the term “brand marketer” was introduced in the mid-90s. A deficient thought vocabulary renders some concepts virtually unthinkable.

In Your Facebook

Today, most of the marketers and solution vendors obsessed with “social media” are in fact formulating new ways of delivering one-on-one messages to targeted shoppers and attempting to influence what they do and say on social networking sites. It’s undeniable that one particular application – Facebook – happens to be used heavily for social play and sharing of consumer lore. Marketers are dazzled by the massive “audience” it has accumulated and are salivating to exploit the opportunity. How fortunate for Facebook investors.

But setting up corporate pages on Facebook or Twitter does not a strategy make. Indeed the existence of these pages implies a broadcast mentality – from us to them. Despite the open visibility of customer comments on the wall, there seems to be relatively little interaction between consumers on these pages. Old comments get quickly buried behind newer ones, and only our social media hired guns bother to track and analyze them – in reports calculated to justify their existence.

Regardless of the channel, shopping is primarily about each individual’s personal success – get the best deals; satisfy my needs most efficiently; manage my budget; impress my friends; etc. When a shopper turns to his or her personal mobile device to access tools to enhance in-store success, it’s a very personal action motivated by very understandable self-interest.

Getting Personal

I submit that when it comes to tapping shoppers via those pocket two-way radiowave computers we call smartphones, there’s very little “social” about it. It’s not social – it’s personal.

If we conceive of the mobile device as a personalized channel for interaction between retailers or brands with individual shoppers or consumers, then we would do well to set aside the imprecise term “social media” and start talking shop. These new media are personal media. Much of what happens on them may be social in nature, but everything that happens on them is personal.

The personal mobile device is taking shape as a personal nexus, where online, in-store, social, and commercial communications converge in unique combinations tailored by and for each individual. Each of us shifts roles at will, according to our objectives of the moment – searcher, receiver, reporter, sender, aggregator, re-transmitter, gatekeeper, purchaser, advisor.

Businesses that hope to play effectively in this incredibly fluid and fast-changing media environment had best get their minds around the personal nature of the shopper experience using mobile devices. When we discuss our strategy for personal media, the marketing mindset shifts in what I think is a constructive direction. Better decisions and practices must surely follow.

As for me, I have nothing against online friendships; but when it comes to business you may count me as anti-social. My reasons? Well, they’re personal.

© Copyright 2011 James Tenser

The New Voxology

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IS “SOCIAL MEDIA FOR BUSINESS” an oxymoron?

One current LinkedIn Groups discussion loudly and repetitively (2,500 posts and counting!) declares it “CRAP.” I think this oversimplifies what has become a marketing imperative, and clouds a very important opportunity.

As new marketing verbs like tweet, blog, and social networking permeate our thinking, we need to acquire a clarifying thought vocabulary that will allow us to grapple with emerging concepts and put the tools to appropriate and beneficial use. I’ll take a first whack at it here. Perhaps some wise readers can build on these ideas.

For starters, it would be helpful to differentiate between the kinds of activities that take place within online social media constructs. I group them into four familiar quadrants: C to C, B to C, C to B, and B to B.

“Consumer to Consumer” social media are probably the highest profile, as they are manifest on hundreds of millions of Facebook, MySpace, Twitter and YouTube uploads. The purpose here is primarily social and personal, and there’s certainly nothing wrong with that. If much of the content posted on virtual “walls” is silly, trivial and self-indulgent, so be it. It is also highly dynamic, interactive, and in its way, democratic. The sheer size of the community is proof of the concept’s power and cultural influence.

Businesses and political groups view the huge C to C audiences as a potential gold mine, and so there has emerged a concerted effort by marketers to deliver controlled messages within the social media platforms. I’d label activities like this “Business to Consumer.” Recent elections showcased this potential, as candidates used online groups, and “fan” pages to garner support, raise funds, and motivate voters. Brand marketers are also in hot pursuit of the social media audience, but they should be cautioned that quaint broadcasting norms may not apply here. Leading practitioners are working out ways to accumulate followers who are receptive to targeted messages and offers and whose responses may also be sources of useful insights.

Which leads us naturally to consider the arrow’s reversal: “Consumer to Business” social networking may be a source of valuable feedback from both supporters and critics. Ardent fan and cruel pan pages can spring up spontaneously – sometimes to the dismay of the brand, retailer or celebrity covered. The object of such public scrutiny typically has little control over its content, much less its veracity. This is a cold fact of life that marketers must simply learn to live with. Wise brands monitor these for insights and to counter libelous talk, but they respond with a light touch, so as not to elevate a lone crackpot into fodder for the salivating media.

Of course, brands, celebrities and pols also take deliberate action to invite communications from loyal and not-so-loyal constituents – setting up their blogs, Twitter feeds, email lists and fan pages to anchor the message and gather feedback. Perhaps B to C and C to B social media activities are inseparable, two sides of a coin.

B2BSM – A Different Animal?

Finally we have the distinct instance of Business to Business social media. This is my real interest in this discussion, actually, because it applies the tools and methods of social media to serious business purposes. LinkedIn is a very good example of a public platform that is used for career networking, personal branding, formation of subject matter communities (“groups”) and sharing current events and ideas. There is also some fairly sound (if experimental) use of Twitter by trade journalists and industry observers (search the #NRF10 hashtag on twitter.com to view interesting and extensive coverage of last week’s NRF Expo in New York, for example).

Another B2BSM realm is emerging around secure-access portals that incorporate social media-like tools. These are used for creating flexible online workgroups, sharing documents and information, even hosting internal and inter-organizational collaboration like Merchandising Performance Management among retailers and manufacturers. The platforms use some familiar functionality, but quickly go deeper to deliver performance dashboards, “fingertip analytics” and other advanced capabilities designed for decision-making experts who are not IT experts.

Some businesses are also using a combination of Web-based and social media applications and tools to manage their visibility, presence, and image with respect to their business community. The portfolio of tools may include any or all of the following: The firm Web site; blog; an email and list management service; a LinkedIn group; a Facebook company page; one or more Twitter or other microblog feeds; an online market research site like Survey Monkey; an online press release distribution tool like PRWeb, and more.

At VSN Strategies, we like to call coordinating this set of activities “management of the commercial online voice” or voxology for short.

Voxology in Practice

VSN WebVox™ is my firm’s name for this business service. We help clients combine multiple Web-based tools and services to create, maintain and propagate a commercial “online voice.”

We craft thematic consistency and interlink the elements to create a high level of Web activity that helps companies score high on search engines and expand their reputation. The result is an evolving Web presence – a combination of visibility and credibility, across the multiple linked channels of the Internet. Companies become more search-able, more find-able, more believed, more in contact, more heard.

At VSN we’re in the camp that firmly believes social media for business is definitely not “CRAP.” Furthermore we maintain that mastery of its subtleties is an essential pursuit for both B to C and B to B marketers. We’d like to see some improved vocabulary emerge to differentiate the activities that take place between individual consumers, businesses and consumers, and businesses with other businesses.

For B to B, I propose “voxology,” the new science of the online voice.

© Copyright 2010 James Tenser