Friday, October 26, 2012

How Target Can Predict a Woman's Pregnancy.

"Target sent baby-related promotions to a teenage girl before her father even knew she was pregnant," and for some, this is a major invasion of privacy. Author of The Power of Habit: Why We do What We Do in Life and Business Charles Duhigg, showcases Target's model of customer tracking. Many consumers are aware that their online purchases are tracked and monitored, but few realize the extent to which a company will go to learn more about you. 

I came across an article from USA Today called "How retailers study and test us to maximize profit".  In it, Jayne O'Donnell and Sarah Meehan discuss the host of ways stores monitor our shopping behavior. Think about this, we live in a world where competitive pricing and effective marketing are the only tools companies have to get your attention. The days of Mr. Johnson running the only grocery store in town where every one knows every one's name are gone. Companies like Target, Wal-Mart, Staples, and Dick's Sporting Goods are hiring on other firms to get to know the consumer better, and it may be the only way they can stay on top. 

Remember those free cards I told you all that I sign up for? The ones that always get me some really awesome free stuff? The most magical part about those loyalty cards and e-mail lists is that you have allowed that company to get to know you better. They know your birthday, your age, your gender, your approximate location, etc. For the most part, Coldstone's Creamery e-mail database knows you better than a casual friend knows you. Many times, after you signed up for these perks, you are issued a customer ID, generally in the form of a barcode for easy computer access. Then, when you check out at Staples with a customer reward card, a multitude of really awesome things happen. 

For one, the store now knows what to replenish the shelves with. If a company is smart, they will keep track throughout the day of what items have been purchased from the shelves, and replenishing with what is in stock. This will promote customer satisfaction because there will be more product available that the customer needs. Secondly, it keeps track of how much you are spending. People, like my mother, who spend upwards of $100 a week in office supplies alone will get rewarded and preferential treatment for promotions over someone like me, who goes in with her and just buy a soda from time to time. They will keep providing my Mom with deals on the ink, paper, and other supplies she needs. They will inform her about exclusive shopping nights, and preferred customer deals. And although Staples will try to contact me and send me timely updates, I am not responding to their contacts and so they haven't found a way to understand my needs. Third, it tells the company who buys from that store, what they buy from that store, and when they buy from that store. They can sit back and look at Store #1438 and say, okay, this store gets shopped by mostly young adults in the 18-25 range, what can we do to get products they want into this particular location. Ever notice how many corporations and large chains have USF Bulls themed stuff in their stores? They know where we are, what's around us, and what they can use to improve their sales. And I love it. 

For some, it's a little scary. There are plenty of consumers that are not okay with this, and feel as though their privacy is being breached. My feelings are simple: the company is not going to use this information to one day take over the world. I'm not an idiot, I won't give out my social security number, or a bank account number. What harm can it really do to give Panera Bread my birthday? They gave me a free bakery item and $2 off of a You-Pick-2, by the way.  Besides, wouldn't you want to shop some where that is going to take the time to personalize your shopping experience to you?

The psychology behind shopping has always fascinated me, and it's definitely what I want to be doing with my life. How did Target know that the young girl was pregnant before her own father knew? By watching what she browsed through online and what she was searching for through their website. Creepy, huh?

14 comments:

  1. Wow! I am amazed at how far companies go to market their products. Where is the right to privacy? This is extremely unsettling but the rewards are so tempting. I guess it boils down to a person's discretion. Thanks for sharing!

    ReplyDelete
    Replies
    1. No problem =]. It is all about what a consumer is willing to share with a company for a reward. Thanks for reading!!

      Delete
  2. I remember reading about this, but you explaining it in a deeper sense made more sense than the original article!

    Now that you say they only ask for our information so they stock the shelves with certain products we like, does this mean if I sign up with a local store, and always buy their Coke Lime (if they have it, sadly I don't think they ever have) they will keep stocking the shelves with that? Interesting ...

    ReplyDelete
    Replies
    1. That's the idea. Especially with your example about Coke Lime. If they store never carries it, then stocks it for a limited time, and the product flies off of the shelf, a good stock manager will continue to request that item to boost sales. That's how they know whether to focus on more diet flavors than regular flavors or if this area prefers Coke Lime to Vanilla Coke, etc. Granted, not all management is competent and will not keep to this formula, but in theory that is how it works =]

      Delete
  3. This is great information. I honestly never took the time to fill out any of my personal information for any kinds of stores, just because of the social norm that you are told not to when growing up. Your completely right though, its not gonna hurt anyone if I give out my birthday and get coupons in the mail. That seems like a pretty fair deal if you ask me. I think its kind of neat that Target can go to that extent to see what people are looking for in their stores. That's a great marketing tool and I don't blame them.

    ReplyDelete
    Replies
    1. I don't either. Times are tough, and as a business student, I can understand trying to find ways to cut costs with out cutting quality, and enforcing store loyalty. It's really a win-win.

      Delete
  4. thats pretty creepy, makes me think about getting a restraining order on some of these places lol.

    ReplyDelete
    Replies
    1. Well, at least you know that Target won't hang out in your bushes watching you at night. That would just be going a bit too far.

      Delete
  5. I can really relate to this post because I work in a retail store, and with "that magical card", as you put it, we can track items that our customers buy. By doing this we want nothing but to reward customers with automatic print coupons for items that they actually desire to use, which we give after each transaction. It saddens me when people chose not to sign up for the card because its "Government run and everyone is out to get them," which is very untrue and actually makes the person appear to have a guilty conscious; at least in the eyes of the cashier. I really enjoyed this article because it's true, and I experience it first hand.

    ReplyDelete
    Replies
    1. I love that you are a retail employee too. I feel like being on the other side of the cash register opens our eyes to so much about the company, and you're right, people do seem totally sketchy when the won't even provide you with their email address to give them freebies. I think the last thing the Government wants is a list of the things you have purchased at Wal-Mart. I'm glad I know someone who can relate to how I feel about this =]

      Delete
  6. Yea thats mad creepy, but I guess thats what they need to do to make money, ive never shopped online so now ill definitly think twice before buying online again.

    ReplyDelete
    Replies
    1. I wouldn't worry so much about shopping online as an invasion of privacy. It is not a bad thing that a store you like having a personal relationship with you. The problem comes when you give out personal information to unreliable stores. I personally don't even shop in smaller stores, but that's because I like the reliability of larger chain stores. Just use your head, I know you're a super smart cookie =]

      Delete
  7. I read about this somewhere. I can't remember where, but this is crazy. I remember reading that the dad went to Target and asked for an apology from the manager. Later he came back and apologized to them because it turned out that the girl was pregnant, but his daughter hadn't told him. One thing is for sure, if you treasure your privacy you're in a world of hurt, because every day we have more technology that erases that. A van, with the right equipment, can sit in front of your house and download all your data from your router. They can see every website you go to. In fact, I wouldn't be surprised if Bright House has a record of every website you go to.

    ReplyDelete
  8. Wow, as a marketing major this scares me and interests me at the same time. I do think it's an invasion of privacy in a sense but it does usually benefit the recipient. On a different and not completely unrelated note. Computers will rule the world one day!!

    ReplyDelete