Data Security

Aaron's Inc., a rent-to-own retailer, has agreed to stop using software to secretly spy on and photograph customers who rented computers. The Federal Trade Commission (FTC) had accused Aaron's and its franchisees of using software to monitor customers’ computer keystrokes and secretly watch them in their homes through the computers’ webcams. In some instances, the company captured images of customers engaged in what the FTC called "intimate activities."

Concerned about privacy? Now you can see what data has been collected on you. I was in for a shock. In an admirable move toward transparency, Acxiom, one of the largest data collection companies in the world, will show you a summary of your personal data. You can see its view into your world at AbouttheData.com. The shock for me? Acxiom got me just plain wrong.

Unfortunately, it's not a question of if, but when your company will experience a data breach. Whether caused by a hacker, equipment failure, theft, disgruntled employee or a vendor error, most retailers will experience an incident resulting in the unauthorized disclosure of confidential customer or employee information. According to the Open Security Foundation and security consultancy Risk Based Security, last year set a record for the number of reported data breach incidents — 2,644 incidents, more than double the number in 2011, which previously had been the highest amount in one year.

Anyone who has attended a retail industry conference in the past two years to three years has likely seen a shift in focus. Where once it was all about merchandising, which led to shopper marketing, it's now all about mobile and big data. Many retailers are struggling with both of these ideas; they know they should be taking action, but exactly what action is unclear.

Differentiation can be difficult in the consumer electronics (CE) and appliance industries because most vendors offer similar products at similar prices. In many cases, the delivery of exceptional customer service at every step of the transaction sets the best CE and appliance retailers apart from their competitors.

Clothing retailer Forever 21 has added an interactive digital fashion experience to its website and is asking shoppers to contribute content. The platform, 21st Street, launched June 18. The brand calls it an "interactive fashion and street style shopping source." Accessible via a tab on Forever 21's website, 21st Street includes images with clothing and accessories and the tab "I want it all!" which pulls up online shopping options and allows users to select colors and sizes and add their selections to their Forever 21 shopping bags.

Wal-Mart yesterday warned consumers of a bogus phishing email purporting to come from the retailer. The fraudulent email looks like a confirmation of a purchase made on Walmart.com, but is actually an attempt to gather personal information from the recipients, the retailer said in a statement. "This email is not from Walmart.com, and it is important that recipients do not click on any links in the email or respond in any way," the company said. "We are investigating the source of the email and working with appropriate authorities."

Etsy breached some sellers' privacy with an email sent this week to buyers. The email was experimental in nature to test new features and went out to a limited number of buyers, though Etsy wouldn't reveal how many sellers were impacted. Etsy Spokesperson Sara Cohen wouldn't say whether the company would inform all sellers who were impacted.

Retailers are blessed with extensive data about their customers and their shopping behavior. This data comes in the forms of offline and online purchase data, extensive email databases, response data, loyalty card databases, direct mail response data, social media data, and website data.  Despite this wealth of information and most retailers' extensive history and expertise in offline modeling, I'm shocked to see that many continue to struggle with merging siloed information and leveraging it across the new digital landscape.

Don't like the price you're seeing on a coffee maker or a toothbrush? Try waiting five minutes. That lesson is starting to dawn on consumers as retailers embrace technologies that allow them to make rapid-fire price changes on a hourly or even minute-by-minute basis. Consumers are accustomed to rapid price fluctuations in the online world, used by sophisticated e-commerce retailers like Amazon.com, but brick-and-mortar retailers are embracing technologies that crawl the web for product prices and make adjustments on the fly both online and in stores for things like consumer electronics, power tools and even consumer packaged goods.