Sears Really Has More On Your Life

By Lawrence Walsh Print this article Print

Sears' stalwart venture into the murky end of social networking with spyware is a harbinger of invasive, targeted marketing to come.

One of the funniest scenes from the 1995 Brady Bunch movie comes when the sugary-sweet brood stuck in a twisted '70s time warp believes they've saved their shag-rugged home. In triumph, patriarch Mike Brady declares: "Kids, put on your Sunday best. We're going to Sears!"

Yes, in an age before mega-malls and the Internet, perhaps double-stitch polyester suit-wearing families would dance and sing on the escalators at Sears. After all, the great American department store had everything from women's lingerie and Buster Browns to chain saws and refrigerators.

But like Brady Bunch and the bygone happy-go-lucky era from which they came, Sears has fallen on hard times.

In the third quarter of last year, its profits plummeted 99 percent and year-over-year single store sales sharply declined. While Sears struggled with a stodgy low-class image, it was eclipsed by upstarts Target and Wal-Mart among the brick-and-mortars and a host of specialty online resellers.

No wonder that Sears is tryingto do more online and through social networking. The trend going forward for online product sales and marketing is targeted advertising and promotions. The more you know about customers' purchasing power, product preferences, personal needs, brand affinity and shopping habits, the better the chance of capturing more wallet share. The problem all resellers and marketers face is staying within the invisible line of privacy respect—something which Sears isn't doing so well with.

Unlike social networking giant Facebook's retreat from using member's personal information and habits for targeted advertising, Sears remains unapologetic for installing spyware on members of its "My SHC Community." As security specialists at Computer Associates have reportedover the past several weeks, the Sears social network surreptitiously installs tracking software on member's PCs, capturing intelligence on everything from the towels they buy at competitors to the bank account and credit card numbers they use.

In response to media inquiries, Sears released this defiant statement:

"It is impossible to become a tracked member of the My SHC Community by simply joining through the website link or general e-mail. Becoming a tracked member of the My SHC Community is by invitation only. Invitations are generated randomly and kept to a minimum by design. My SHC Community goes to great lengths to describe the tracking aspect for those members who receive an invitation. Clear notice appears in the invitation. It also appears on the first signup page, in the privacy policy and user licensing agreement. We provide additional notice of the tracking feature in the form of a welcome email that is sent to everyone after they become a member."

Sure enough, the My SHC Community Web siteonly states that Sears "may" ask that members share personal information and will be "invited" to share information. Further, the site's privacy statement is distinctly different from the general Sears and K-Mart Web site privacy statements. Security and privacy researchers who have reviewed the service say that the notification about tracking software is obscure and intentionally vague.

Neither the Federal Trade Commission nor the Illinois Attorney General's office of consumer protection has responded to inquiries as to whether there have been consumer complaints about the Sears program. Neither has there been any online chatter about consumer dissatisfaction. For now, the brunt of the backlash is coming from the security and privacy community.

Facebook faced the same backlash after announcing a somewhat similar effort. Rather than using tracking software installed on member's machines, Facebook planned to mine users' profiles and surfing, communications and surfing habits to target advertising. Yahoo and Google are both developing advertising products that match ads displayed to users' unique profile, interests and habits. And consulting firm Accenture has developed a proof-of-concept personal coaching toolthat will provide mobile computing users to receive special messages and promotions based on personal information they share with marketers.

The promise of online marketing is reaching the right people with the right information at the right time. The concept is vastly different from the days of conventional mass marketing, when advertisers would spend millions of dollars on general distribution ads in hopes of getting in front of select eyeballs. Targeted marketing is the wave of the future, but it will take time to sort out the parameters for what are acceptable practices.

Eventually, consumers will get use to the idea of surrendering some of their personal information in exchange for discounts and special promotions. It will be programs like those launched by Sears and Facebook that will initiate the discussion about those standards. Until then, as the Trojans may have said, "Beware of Web sites bearing tracking software."

Lawrence M. Walsh is the editor of Baseline magazine. Share your thoughts on consumer privacy and online marketing with Larry at lawrence.walsh@ziffdavisenterprise.com.

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This article was originally published on 2008-01-07
Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.
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