Charles Duhigg recently revealed in the New York Times how companies — like Target, specifically – learn your habits in order to make you a more loyal shopper. Through meticulous data collection and no shortage of fancy algorithms, retailers can figure out your shopping habits and what forms them. Then, they can manipulate you better than ever.
Duhigg recalled a story of an interesting incident at a Target. A man walked into a Target outside Minneapolis, demanding to see the manager. He was angry over coupons for baby clothes and cribs that had been sent to his daughter who was still in high school. How dare Target encourage teen pregnancy, he ranted.
The manager apologized and then called a few days later to apologize again. On the phone, however, the father said he’d had a talk with his daughter. It turned out she was pregnant, and the father apologized to the manager.
Who Target Is Targeting
Expectant parents are a retailer’s holy grail. Once shoppers’ habits are ingrained, it’s incredibly difficult to change them, but there are some brief periods in a person’s life when old routines fall apart and buying habits are suddenly in flux. One of those moments — the moment, really, according to Target’s statisticians — is right around the birth of a child, when parents are exhausted and overwhelmed and their shopping patterns and brand loyalties are up for grabs.
The moment a couple has a new baby, they are almost instantaneously barraged with offers and incentives and advertisements from all sorts of companies — birth records are public, after all. This means smart retailers must reach expectant parents before any other retailers know a baby is on the way. Target’s marketers send customized ads to women in their second trimester, which is when most expectant mothers begin loading up on things they haven’t bought much of before — like vitamins and maternity clothing.
“We knew that if we could identify them in their second trimester, there’s a good chance we could capture them for years,” Andrew Pole, Target’s lead statistician, told Duhigg. “As soon as we get them buying diapers from us, they’re going to start buying everything else too. If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.” So, if you start stocking up on unscented lotion, hand sanitizer, magnesium supplements, and washcloths — don’t be surprised to start getting prenatal ads in the mail.
When some pregnant women started getting creeped out by all the pregnancy coupons, Target cleverly began mixing up the ads to make them look more random. “We’d put an ad for a lawn mower next to diapers. We’d put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance. And we found out that as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons . . . it works.”
Target has raised its revenue tremendously since it hired Andrew Pole and began focusing on mother and baby items about a decade ago. The key has been carefully profiling Target customers. When you use a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an e-mail from Target or visit their website, they record it and link it to your “Guest ID.” Also linked to your Guest ID is demographic information like your age, whether you are married and have kids, which part of town you live in, how long it takes you to drive to the store, your estimated salary, whether you’ve moved recently, what credit cards you carry in your wallet and what websites you visit. Target can buy data about your ethnicity, your job history, the magazines you read, whether you’ve ever declared bankruptcy or been divorced, the year you bought or lost a house, where you went to college. They can find out your preferred brands of coffee, paper towels, cereal or applesauce. They can find out your political leanings, reading habits, and what you talk about online. Target’s Guest Marketing Analytics department takes this information to advertise and essentially program your brain to shop for everything you buy at Target. For companies like Target, discovering what causes our habits has helped them predict how precisely they can sell.
An Inevitably Increasingly-Analytic World
Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a “predictive analytics” department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them. “But Target has always been one of the smartest at this,” says Eric Siegel, a consultant and the chairman of a conference called Predictive Analytics World. “We’re living through a golden age of behavioral research. It’s amazing how much we can figure out about how people think now.”
Target assigns every customer a Guest ID number, tied to their credit card, name, or email address that becomes a bucket that stores a history of everything they’ve bought and any demographic information Target has collected from them or bought from other sources. What Target is doing is certainly not illegal, but it is a bit disturbing to know that they can pick up on aspects of your personal life that you haven’t yet announced to your family. Such is our day, though: illegal or not, our privacy seems to be slowly disappearing thanks to technology and smarty-pants mathematicians.