Finding Your Cues: Target

For the most part, the modern Target department store has pretty much everything someone would need – at least the essentials. While anyone who shops at the stores would probably acknowledge my statement, few individuals designate a Target as their sole shopping destination. For instance, if we need groceries (even the staples such as bread and milk) we’ll go to the grocery store even after stopping at a Target. Target has bread and milk. Why didn’t we purchase the bread and milk while we were there? Typically the answer to that question is that we need a myriad of other items exclusive to grocery stores and the rationale is that we will get the bread and milk while we are there. This is an example of an ingrained consumer shopping habit and it is one of the major challenges for Target’s marketing team. Market analysts seek to find are the moments in life where consumers are taken out of their routines and their shopping habits are disrupted. It is those moments where carefully placed advertising (or “cues”) could be inserted that have a very good potential to alter one’s shopping habits for good.

                The way to find out when such moments occur is to collect as much data you can about the individuals who shop at your store. While nearly all department stores have some elaborate data collection in place, Charles Duhigg gave readers of The New York Times this week a glimpse into Target’s Guest ID system this week via an article entitled “How Companies Learn Your Secrets”. Per Duhigg’s article, the Guest ID is a system that attaches a unique code to every Target shopper. Data is then funneled from various collection points (i.e., credit card purchase, e-mail viewing, survey completion, and coupon or refund claims) to the shopper’s personal repository. Such data is then collaborated with key demographic information (i.e, age, sex, ethnicity, place of residence, distance from store, education, job history, etc.) to develop a profile of the shopper. That profile is tediously analyzed by Target’s ‘Guest Marketing Analytics department’, a group of essentially marketers and mathematicians, to find out the shopper’s product preferences and where the store can meet those needs. As a results, seemingly tailor-made advertisements, mailers, promotional e-mails, and coupons (all “cues”) seem to find their way to the attention of the shopper. The hope is that the shopper will unconsciously respond the cues by shopping at Target for specific items of need, and while they are in the store they can pick up everything else on their list as well. The whole goal is forming new habits. Taken to another level, Target’s marketing analysts believed that at no other time is a shopper more vulnerable to such cues than major life changing events, most notably pregnancy. It is at this point where Target’s analysts embark on some major, yet controversial, marketing innovation.

                At some point in the not so distant past, marketer’s at Target discovered that expecting mother’s are the most susceptible to marketing cues primarily because of the course of their lives has been altered to an extent never before experienced. Expecting moms have to purchase all sorts of things from lotions, to vitamins with specific supplements, to sanitizers and cotton balls (lots of them). Obviously, Target sells all of those things so the objective proposed was to find all the expecting mother’s within distance of a store and pull them in. Of course, that is easier said than done. Most expecting mothers aren’t easy to identify early in their pregnancy, but Target figured out an ingenious way to do so. Using existing data like the baby registry and Guest ID Target formulated a new data collection repository that identified potential expecting mothers by their shopping patterns and products they purchased. From the moment they were identified, Target would begin sending specific advertising, promotion, and coupons to that individual for products that they would likely need at that point in the pregnancy. The system became so advanced that Target alleges that they could estimate a pregnant woman’s due date “within a small window”. Sound creepy? Seem borderline wrong? Sure, but representatives of Target quoted in the article maintain that they remained “very conservative about compliance with all privacy laws”. The process allegedly generated Target millions in additional sales. However, the program did receiving criticism when the department store seemingly “identified” a pregnant high school girl before her parents knew through their algorithms and targeted advertising. While a huge success, executives quickly realized that this approach could turn into a public-relations nightmare overnight so such specific marketing has been toned down dramatically, but not eliminated.

Bullseye! source: Forbes.com



                So thus we have come to the modern age of marketing. Stores are collecting data on shoppers so that they can provide them with the cues tailor-made to suit your needs and wants and essentially change their behavior, hopefully forever. Is this wrong? Is this an invasion of privacy? Or is this innovation? Maybe my Father-In-Law isn’t that far off the mark by not having the Internet and always paying for items with cash. Would I mind being a ‘Targeted’ shopper? I think it is nice to have the coupons come to you rather than digging through a cluttered Sunday newspaper to find them. Regardless of how one feels about the issue, I think it is fascinating reading.

Sources:

Duhigg, Charles, “How Companies Learn Your Secrets” The New York Times, February 16, 2012 (accessed February 16, 2012) http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all

Hill, Cashmir, “How Target Figured out a Teen Girl Was Pregnant before Her Father Did” Forbes.com, February 16, 2012 (accessed February 17, 2012) http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/