September 28, 2004

Is Corporate Hoarding the CRM Goodies?

By Evan Schuman, eWEEK

Store managers are starting to complain that their data-collection efforts are baring fruit, says Evan Schuman, but they're not being allowed to eat any of it.

It's a common complaint within retail circles. Store management is given the most hard-line responsibility—your store beats its numbers or you're in serious trouble—along with much of the work of executing every corporate IT decision, but yet those store managers have virtually no say in what those systems will be or how they will be used.

It's the explanation for the spotty—sometimes great, sometimes awful—success rates of many self-checkout programs. The weak performers almost always just dropped equipment on store managers with little explanation and just another mandate. Surprise: The programs were executed in the most perfunctory fashion and left to wither.

Now comes word of store managers rebelling against CRM systems, complaining that the answers that come back from headquarters are too late, too few and typically are not answering the questions the store managers want answered.

Is this an indictment of the top-down IT approach? Not at all. Retailers must have accurate global views of where sales are going, and those decisions can't be made by majority rule.

But this does raise the question of whether store managers should be given the freedom to set up their own parallel CRM systems, as some isolated retailers have been trying. The problem is not so much with gathering two sets of data. Ostensibly, the store managers and their staffs would handle all of the additional labor involved and would have the best feel for when customers were being asked too much, too often.

As this column has said about RFID privacy issues, the problem is not so much the technology used to gather the data and how it's gathered, but what will be done with it.

Here again, conflicting agendas and psychological issues obscure rationality. The store manager makes a convincing argument that the customer is the store's local customer, that the store's reps made the sale, that the face the customer sees is the local store personnel, and that commissions and job security make the store manager the one who will ultimately be held responsibility for an unhappy customer. The corporate IT person makes a much shorter and pithier argument: We pay the salary of the store manager.

And, for that matter, the store workers, the building, the stock, the advertising and just about everything else. Store managers should be consulted on customer contact, and they should be free to gather their own data, but the idea of having thousands of store managers given the ability to independently contact their customers above and beyond what corporate does is asking for trouble.

That said, the idea of corporate deciding to give regional store managers full autonomy over any contacts made to their customers is attractive. On Kerry campaign commercials, the candidate is heard at the end saying, "This is John Kerry, and I approved this message." That might not be a bad idea for e-mail and snailmail campaigns. "I'm Jane Doe, store manager of the Main Street Widget Emporium, and I approved this message." It gives them a person to ask for. (You'll note I didn't include phone bank campaigns. I think store managers are too smart to associate themselves with those forms of legal torture.)

What some store managers have been exploring are modern-day interactive kiosks, such as the ones Nike is using to let customers design their own sneakers in exchange for personal data and a lot of cash.

As the latest in a series of do-it-yourself retailing kits, this one has some serious promise. Here again, the ultimate value of the kiosks will be dictated by how intelligent and self-restrained the systems will be.

If the units become TVs on wheels, displaying continuous product commercials, they will deserve their fate. But if they are able to compare customer-selected products with non-promotional illustrative animations, they have promise. If they are able to answer detailed questions about the products that go well beyond what's printed on the label, it's getting better. If the boxes are given a Web connection so that the displays can communicate live with product experts and allow for real-time communications (think of the customer service kiosks at Disneyworld), this is getting very interesting.

But there's a limit. The day a kiosk greets me at the store's front entrance and tells me that it is fluent in 6 million forms of communication, I'm gone.