This column was written by Evan Schuman, the editor of StorefrontBacktalk, a site that tracks retail technology, e-commerce and security issues. Retail Realities appears every Friday. Evan can be reached at E-mail and on Twitter.
With Twitter, Facebook and LinkedIn leading the way, many retailers are experimenting with a wide range of approaches for creating common-interest communities for their customers, especially online. Of course, such actions start to shift some of the power away from the chains and to the consumer. Amazon last month made its first defensive move in trying to control that type of community.
What Amazon did was change how it handles E-mail. Before, comments to a discussion forum would include a customer's real E-mail address. No more.
"Real buyer and seller E-mail addresses will be hidden by our systems. All sellers and buyers will be assigned an Amazon E-mail alias," said an Amazon statement. "This will enable both parties to continue communicating as they do today with standard E-mail providers (such as Yahoo, Hotmail, etc.). However, that communication will happen via their new E-mail aliases instead of their real E-mail addresses. All communication will be stored and available for review in case of disputes."
This move is very interesting. From a brand-building perspective, there are few things better than sitting back and creating a huge room for tons of your customers to gather and talk about you. In the meantime, you sit back and take notes, capturing all of the exchanges for later analysis-for both general trends and any individual situations that you can address with individual customers. That last part has become a Twitter specialty.
E-mail strategies have become crucial among major retailers these days, sitting right alongside of SMS, mobile and the Web. Best Buy, for example, recently slashed its E-mail list down to 2 million, only to discover that it immediately had to build it back up to 27 million names..
But even more than E-mail strategies, retailers are trying to figure out how to bridge the ever-popular virtual forums and bring them into their physical stores. Apple is stirring up a lot of retail excitement with an application for a patent for a concept called iGroups, where iPhone users could privately share information with others on their groups who happen to be in a very specific place, such as a music concert, a tradeshow, a rally or a wedding. But merchants think it could also work in shopping malls. Instant virtual discussion forum in a very non-virtual building.
The struggle, though, is to make this work for younger consumers (the so-called Gen Y consumers), whose feelings about virtual discussions is still evolving. One recent study has challenged the assumption that teen girls, for example, would love to share shopping ideas within large groups. Turns out that they don't, but that they will share just about everything within a very small group.
The E-mail problem that Amazon is now addressing is, "What happens when customers try to continue the discussions outside your room?" You quickly lose control, both in the sense of policing the room (no obscenities, SPAM, personal attacks or drug deals. I'm cutting you and you off) and being able to monitor all of the exchanges for the referenced general and specific feedback. And, yes, some of that policing might-for the short-sided among us-include deleting nice comments about your rivals and bad things said about your brand.
In an E-Commerce space, though, these exchanges can get even more dangerous. By allowing the E-mails in the open, you're offering an easy way for your rivals to talk with your customers. Customers can talk with each other privately, complaining about a perceived plight. One person can post an unhappy experience on Amazon, and it has limited damage potential. Someone has to search for it and find it.
But with E-mail, one disgruntled customer-who may or may not have a legitimate point-can place his or her concern in the Inbox of thousands of other customers. It may be time-consuming, but with the right software, it's not that time-consuming. Besides, angry customers (especially the crazier ones) tend to find the time.
In this specific Amazon situation, the grouping is not solely customers; it's an exchange of buyers and sellers. You can now creep into the "if one person cuts a break for one customer and drops the price another 8 percent, do they really want that screamed to every other potential customer?"
Amazon listed four reasons for its effort: increasing "privacy and security of buyer-to-seller communication"; resolving "disputes faster and better by ensuring that reviewers have access to all buyer/seller communications"; reducing "the number of A-Z claims filed by encouraging and verifying pre-claim buyer/seller communication"; and eliminating "unnecessary contacts during claims investigations."
Those points are all legitimate, and you'll note that Amazon neglects to note the treasure trove of additional CRM data it will gather. Consumers tend to speak more freely when it's point-to-point rather than when their comments are posted in a public forum, even if they know-but will probably forget-that the retailer is monitoring and capturing the exchanges.
The "unnecessary contacts" point is especially intriguing. Is that "unnecessary" in the sense of "you're saying things to each other that we don't want said about our brand" or "we can't police against SPAM, obscenity, death threats or anything else if it's happening outside our earshot"? To be fair, it's clearly both.
As chain executives accelerate efforts by joining social sites, setting up their own pages on those established sites and even creating their own forums, they need to think through little things such as E-mail access.
Setting up a community to help with brand building and making sales is fabulous. But even a friendly community needs a police force. The question is: Where to draw the line between a "protect and serve" group of guardians and a 1984-style group of monitor-everything overseers for the good of the public? Amazon seems to have made the right choice here. It understands that protecting its citizens and learning a lot more about them don't have to be mutually exclusive. That's true as long as the residents don't object and opt to move to a less gated community.
By Evan Schuman
Special to CBSNews.com
Copyright 2010 CBS. All rights reserved.