Evan Schuman's StorefrontBacktalk

Mobile geolocation is a tricky game, assuming you want to establish what product a customer is examining—or not examining—at a particular moment. It’s good at identifying the building the customer is in, but not much more. Best Buy has started a trial “in a few stores” where it’s using ultrasonic waves “as a fingerprint to say exactly where you are within the store,” according to a Best Buy marketing exec.

Describing the smartphone as a “cord to my soul” and a consumer’s “most personal device,” Tracy Benson, senior director of Best Buy U.S. marketing, said the trial is promising some contextual relevance to know precisely where a customer is standing and what direction they’re looking when they have their phone. Today’s mobile technology “doesn’t tell me where the customer is looking. This uses different sound waves to detect precisely where they are.”

Best Buy is working on the geolocation ultrasonic trial with Shopkick, Benson told attendees at Wharton’s (Univ. of Pennsylvania) 2010 Interactive Retailing conference Tuesday (March 23) in New York City.

The conference showcased retail exec talent from Wal-Mart, Saks, CVS and Best Buy at a pair of panels exploring how far retailers can—and should—push the marketing and technology intersection.

Steve Nave, the Senior VP and general manager of Walmart.com, said he typically commutes into work while silently listening to customer service calls as a way to better understand customer interest and concerns. During the holidays, Wal-Mart senior managers answer all the customer service calls, both to give the regular crew the time-off and to get a better handle on customer demands. (Note to consumers: Call Wal-Mart on the major holidays. You’ll likely get much better assistance.)

When Nave was asked to give an example of something Wal-Mart tried that failed, he mentioned upselling to customers who called into the call center. He said there was a disconnect because customers calling in were generally not happy with Wal-Mart at that moment, which is psychologically not the best time to try and sell them more. (It’s sort of like an employee being chastised by her boss for poor performance and the employee choosing that moment to ask for a raise.)

“You’ve disappointed that customer. I didn’t like how disingenuous it felt. It didn’t feel like the right thing to do,” Nave said.

The panel also discussed—with no particular resolution—the best ways to handle customers who complain about your chain on Twitter or some other social site. Some said leaping in and contacting the complainers quickly is the best way to turn a negative into a positive. Others said to do nothing and hope that some of your customers will come to your defense, which is even more credible. “Let it resolve itself,” said panelist Shawn Gaide, business development director at Bazaarvoice. “Get out of the way.”

Another interesting exchange involved data retention. Many have discussed the security implications of not keeping payment data around any longer than is absolutely necessary. But the panel’s concern was how much data should be maintained for purely marketing analysis purposes. “How much data do you really need?” asked Adrian Sosa, the director of consumer insights & analytics at pharmacy chain CVS.

Sosa’s answer to that question—at least for his 7,000-store chain—is “only six months, maybe a year.” When he’s run comparisons, he said, CRM data much older than that was simply ineffective because customer needs and products change. “We saw that 98 percent of the targeting value was in the shorter term data,” Sosa said, adding that he retains card-holder data for four years and “overall analytics” for 3 to 4 years.

Best Buy’s Benson said the nature of her chain suggested very different answers. While CVS customers return to those pharmacies often—although the average CVS customer only buys three things per transaction—Best Buy customers tend to spend a lot more per trip but return to Best Buy less frequently. The average Best Buy customer, Benson said, only shops at the store twice a year. “So our transaction history has to be much longer. But it’s not a question of ‘How long?’ but ‘What type of data do you really need?'”

She then asked about social sites, where the potential exists for much richer sources of information. She said that Facebook is now working with Experian, suggesting it as proof that social site data can indeed be mined.

Google is now saying that mobile search has increased 3,000 percent in just the last couple of months, Benson said. “That’s huge.”

Even E-mail analysis is going to become a more critical area, panelists said. Wanting to avoid SPAM accusations, Best Buy had slashed its E-mail list down to 2 million names, only to have to recently build it back up. Benson said the list is now back up to 27 million names. By comparison, CVS’s Sosa said his chain has now collected 8 million E-mail names.