Tuesday, May 01, 2007

Apples & Oranges

While I haven't been blogging about the TJX breach, I have been tracking the incident and there's a curious element to the response that has not gotten much attention in the news.

While it's clear that TJX was caught off guard by the breach from a communications perspective -- their public comments have often been inaccurate, contradictory, and misleading (likely not intentional, just symptomatic of their lack of preparedness). But one thing the discount retailer has done very well is amp up the marketing.

This article in Bank Technology News examines what may at first seem to be a contradictory response from consumers, but actually makes perfect sense. I've heard a number of people question consumer response, wondering out loud why affected shoppers continue to spend money at TJX. After all, hasn't research shown that consumers will bolt a vendor that doesn't respect privacy?

It's an apples and oranges comparison, actually. Consumers, above nearly all else, want convenience and a good deal. As a discount retailer, TJX stores know all about cutting price, and when they found themselves in the spotlight, while their corporate spokespeople were stuttering their way through explanations and interviews, their marketers were buying air time and (I suspect, though I can't tell for sure since I don't shop there) lowering prices. Here in TJX's back yard, the television is busting with commercials for the various TJX stores.

Ponemon Institute research showed the fallout for banks that fail to respect customer privacy, but banks are not able to manipulate costs the way a retailer can. Retailers have more and different options. Besides, a long-term relationship with a retailer is more of a series of short-term decisions. Choosing to do business with a bank is a more serious commitment on the part of the consumer, and requires a completely different level of commitment on the part of the bank.

In her article, Holly Sraeel understands and articulates the difference.


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