Albertsons Learns the Legal Dangers of CRM - Page 2

Trust"> The issue here comes down to trust. Customers want to trust that their pharmacists know best and are acting with their best interests at heart. Typically, consumers can purchase the same prescriptions for the same price from many pharmacies, so the only effective pharmacy value-add is service, expertise and advise.

Medicine is an especially touchy area. If they were using personalized letters that were supposed to be from the produce manager pushing McIntosh apples over Red Delicious, this wouldnt be an issue. How Albertsons could have not seen the strong potential for this to blow up is stunning. Was the almost $5 per letter enough compensation to shatter consumer confidence in their pharmacy recommendations?

/zimages/6/28571.gifIn Europe and Asia, retail technology efforts are often more cutting edge than in the U.S. Read "Is U.S. Retail IT Being Killed By Complacency?"

Like CRM advocates needed another headache. Back in July, Krogers got into trouble for not using its CRM data to alert customers that they had purchased recalled contaminated beef.

Even among drug store chains, Albertsons is not alone. Rite-Aid, Eckerd and Walgreens have also been involved in similar accusations of over-aggressive CRM usage. In Eckerds case, the retailer had reached a consent agreement with the Florida Attorney Generals Office whereby it agreed to stop using drug logs, which are signed by customers, in direct-mail marketing.

These are crucial retail IT issues because IT execs are going to use these lawsuits as another reason to back off individualized consumer campaigns. The sad fact is that they will be drawing the absolutely wrong conclusions. A good idea poorly executed does not instantly morph into a bad idea.

/zimages/6/28571.gifToys "R" Us found out that CRM isnt of much value if its not used.

The individualized information in a well-done CRM program is extremely powerful. The lesson to be taken is that marketers must use the information in ways that customers will value and appreciate. If anyone asks in a meeting, "What if they find out?" thats a pretty good hint that this is not a good implementation.

Ive cited before my favorite CRM-aggressive retailer: There you have a retailer who pushes individualized information further than almost anyone and does so with topics that might have been expected to sound all kinds of 1984-like alarms: lists of books read, what DVDs someone even looked at, what kind of images they are attracted to, etc.

And yet Amazon has been able to mostly steer clear of privacy pushback fights. Why? They use the information in ways that most customers appreciate and want more of. Thats not easy, but Amazon proves it can certainly be done.

Dont look at companies that try to trick customers or show disregard for their safety or even their money as reasons to not aggressively pursue retail CRM any more than youd look at Charles Manson or Ted Bundy and say, "See? We shouldnt invite people to dinner anymore."

Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at

To read earlier retail technology opinion columns from Evan Schuman, please click here.

/zimages/6/28571.gifCheck out eWEEK.coms Retail Center for the latest news, views and analysis of this vital industry.