Evan Schuman's StorefrontBacktalk

Neiman Marcus is testing a new iPhone loyalty app that the luxury chain hopes will finally turn a longstanding desire of retailers into reality: the ability to know when the chain’s best customers walk through the door, and to match those customers up with the right sales associates.

Retailers have been trying to get that right for years, using a variety of technologies. But if Neiman Marcus’ approach works, it may mean that associates and store managers will have to exercise much more discretion and discipline—and that chains will have to change the way they hire associates.

The “NM Service” app, which the chain announced on March 1, is being tested in four stores (Austin and Dallas, Texas, and San Francisco and Palo Alto, Calif.). It uses Wi-Fi triangulation and the iPhone’s geofencing capabilities to identify when the customer walks in. Once the customer is identified, she receives information on new product arrivals, upcoming store events, fashion trends and—most significantly—whether the customer’s preferred sales associates are currently in the store.

Meanwhile, those associates receive an alert that the customer has arrived, along with the customer’s in-store and online purchase history, a Facebook photo of the customer and potentially other notes on the customer’s preferences.

It’s a nice use of technology to extend the memories of associates—they can’t actually remember all customers, but thanks to CRM data it’s easier for customers to pretend they do. The illusion isn’t perfect—customers can select whether to automatically show up on the store’s radar or to require that they opt-in every time they walk into a store. In that case, it’s going to be hard for customers not to be aware that they’ve just announced themselves electronically.

There’s another illusion-puncturing element to that CRM data: The associate knows not only what she sold the customer but also what the customer has bought from the chain’s E-Commerce site, from other associates and from other Neiman Marcus stores.

That’s where things get tricky. All that CRM data is necessary for the customer to feel like the associate really does know her, and it’s that personal connection that results in customers buying up to ten times as much as from a random sales associate. But the same CRM data is available to other associates who may have never met the customer.

If one of those associates starts mentioning purchases that the associate has no obvious reason to know about, it could raise a customer’s concern about her privacy. If—as a planned future feature would enable—a preferred associate has put notes about the customer’s personal details or preferences into the system, and some other associate suddenly seems to know all those personal details, the shift from “friendly” to “creepy” can happen very suddenly.

That shift to creepy can happen even faster when the purchases in question were made online.