The arrival of social media has been both an opportunity and headache for retailers. It's certainly easier to build a community of loyal fans and to work on deals and offers with them, but it is just as easy for the community to share bad news about your company - especially when rivals are offering better deals.
With social media you can't just opt in to the upside. Transparency means the downside is always part of the deal, so there are many different ways that retailers are exploring to make this work for them.
Starbucks has used their website to create a conversation about the actual stores - a forum where customers can suggest improvements or what they would like to see in their ideal café. It's a nice way to engage the virtual community in a way that involves them in improving the physical stores.
Clearly this kind of experiential advertising can work for a company like Starbucks, due to the limited range of products they sell, but it would be more difficult for other retailers - like a supermarket - to make it work. Imagine a conversation between thousands of online shoppers on the best place to locate the baked beans?
Many retailers are exploring the use of social networks and how they can create communities of shoppers who are already known to like their brand - quite literally because they have clicked on a 'like' button.
Communities are becoming more important to retailers who are trying to sell and offer customer service across many channels. A problem for many is that the shopper will come into a store and try out the products with no intention of buying - they just want to have a look, see what they like, and then go home and use price comparison websites to find the cheapest place to buy it online.
This makes life tough for the retailers who have a large network of stores, but have yet to find a way to connect their web channel to the High Street. Engagement through community management can offer a way to create more loyalty - more like creating a relationship with the customer. This form of social support creates an enormous opportunity to interact with known supporters, but also opens brands up to the accusation of going too far in their relationship with the consumer.
Picture the scene. At some distant point in the past you had clicked the 'like' button on the Facebook page for Sainsbury's. Then you use Facebook Places to check-in to a Sainsbury's branch. Almost immediately your phone bleeps and a voucher valid for one hour at the branch you are in has been sent to you.
I'm just using Sainsbury's as an example - I'm sure they are not monitoring every move you make, but the point is clear. Multichannel retail will soon be embracing location awareness and surely this is when consumers are going to become wary of ever clicking another 'like' button?
Maybe. It feels a bit like the Tom Cruise movie Minority Report, where advertising posters could scan the retina of nearby pedestrians allowing them to then serve up relevant adverts, though even this futuristic ideal of advertising feels somewhat quaint today. Posters, how nineties!
But even if this kind of development is becoming possible, is it legal? Surely the existing data protection laws would prevent companies connecting where you are with what you like and initiating contact - such as sending a time-bound voucher?
Apparently not. I asked Kim Walker, a partner at law firm Thomas Eggar and an expert on data protection, for her view on British law as it stands. "This is all legal, even within the current definition of the rules, but it does depend on the brand being open and transparent about what they might do with the information you provide. It is easy to imagine a scenario where a customer is a fan of your company on Facebook and then checks in to a branch on Facebook Places, allowing you to text them a voucher valid for one hour," she said.
We have moved on from multichannel retail just being about the in-store experience with an ecommerce website bolted on as an afterthought. Social network communities, location-aware devices and the monitoring of what customers are saying about retailers on social networks are all creating the need for a more sophisticated approach and an appreciation of how to handle all this information.
At the end of the day, what the customer really wants is to be appreciated by a retailer. The old expression that the customer is always right applies even more in a multichannel environment because instead of complaining about a problem at an in-store service desk they can now broadcast any positive or negative comment to thousands of online followers. Retailers need to understand how to make multichannel work before consumers abandon them - across all channels.