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Williams-Sonoma Zip Code Ruling: Just In Time To Be Irrelevant

February 17th, 2011

Keep in mind that this is a California law, and this ruling is specific to the Golden State. The impact is bigger than that, though—partly because California is so big, but also because the state is a bellwether for both retail and legal trends. When California courts decide to expand the range of what qualifies as personally identifiable information in retail, other courts are likely to follow.

That leads to the other irony, which is that old-school techniques such as collecting Zip codes are already on the way out. To stop collecting that information is much less of a hardship for retailers today. Sure, it’s easier than ever to feed names and Zip codes into database engines that spit out mailing lists to target unenthusiastic customers.

But today, huge numbers of in-store customers will voluntarily divulge much more—and much better—information. How much they spend, what stores they visit, what products they buy and which coupons they use can all be tracked in detail, and with customers’ full cooperation.

Online, customers will volunteer E-mail addresses and personal information and even tie themselves to retailers’ Facebook pages. Does that customer’s IP address qualify as personally identifiable information? Interestingly enough, an IP address in the online world is much more specific—and therefore identifies a consumer much more closely—than does a Zip Code in the physical world.

This fact was actually addressed in a 2009 court case, when a federal judge in Seattle ruled that “in order for ‘personally identifiable information’ to be personally identifiable, it must identify a person. But an IP address identifies a computer.” Is that a material distinction in a privacy discussion?

It hardly matters—the customers you want will likely be glad to tell you all about themselves.

Mobile commerce is still in its early stages, but it’s quickly developing the same pattern. You don’t have to be sneaky to squeeze phone numbers out of customers. They’ll jump at the chance to sign up to receive your text alerts, coupons and other mobile shopping offers. And this is above and beyond all of the location- and cell-phone-specific data that mobile devices surrender automatically.

Remember Best Buy’s ill-conceived in-store kiosks that looked just like its Web site, except with higher prices? Those turned out to be illegal, too. Today, of course, such a tricky gimmick is useless. So many customers can check a real Web site on their phones that a deceptive kiosk wouldn’t last a week. It’s not just illegal; it’s obsolete.

The days of trying to trick the unwilling into listening to pitches they don’t want to hear are gone. You have real, enthusiastic customers who believe loyalty programs and text alerts aren’t annoyances or invasions of privacy but valuable shopping tools. They want to spend more money at their favorite retailers.

But wasting your associates’ time in questionably legal efforts to scrape up a little information that can be spun out into mailing lists that will only irritate uncommitted customers? Even if it weren’t illegal, that’s a crime against retail.


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Why Did Gonzales Hackers Like European Cards So Much Better?

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