With the amount of data companies have access to these days, it’s just plain dumb not to take advantage of it. Research has shown that consumers develop shopping habits without any real thought behind why they choose to always shop for their groceries at a specific store, but for other goods at another. Since these purchases are made habitually without any complex reasoning behind it, it makes it tricky for marketers to convince shoppers to change. However, marketers have done their research, and studies have shown that when a person goes through a major life event, their shopping patterns suddenly become flexible and are more vulnerable to change.
Some companies, like Starbucks, have gained so much valuable data on their customers through the use of loyalty Gold Cards and the accompanying phone app, but they haven’t quite figured out what to do with it yet. As a current Starbucks barista, I’m very curious to see how they start to use this gold mine of information on those poor caffeine addicts (which includes me – I may or may not have just finished half a pot of coffee all by myself…).
Other companies have recognized the potential powerful influence nested in the data and have started to apply what they have learned about their customers in the way that they personalize promotions and the coupons they will send. Take Target, for example, and the infamous case where Target knew a teen daughter was pregnant before her dad did. After analyzing all the data on shoppers, Target was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. Not only this, but they were able to take their findings to another level and estimate the woman’s due date. Having a child is a major life change, and what better time to take advantage of a customer’s vulnerability to marketing by sending targeted coupons for baby products, cleaning supplies, and groceries, to show new parents how convenient and easy it is to get all their household needs in one stop at a store like Target? It’s sneaky, but smart!
If you think about it, it can be pretty creepy that companies have figured out that you just went through a divorce, moved, got a new job, got married, or are even pregnant, purely based off of the purchases you have made. It’s even creepier when you start getting coupons in the mail congratulating you on that big life event when most people in your life still don’t know. It can feel like the company is taking a page from Andy Samberg’s book and are sitting in a tree outside your window, peeping in at you.
But in reality, all they are doing is making an easier and more personalized shopping experience for you. After the story got out about the father finding out from Target that his daughter was pregnant, Target conducted some surveys and found out that as long as they camouflage how much they knew so it doesn’t feel creepy, customers are ok with having companies know the intimate details of their life.
Want to learn more about how Target gets it’s information on you? Or how other companies are using all that data? Check out these articles:
- On Orbitz, Mac Users Steered to Pricier Hotels
- How Companies Learn Your Secrets
- At Starbucks, Data Pours In. But What to Do With It?
- Using Analytics to Predict Hollywood Blockbusters
- Inside the Secret World of the Data Crunchers Who Helped Obama Win
- Obama’s ‘Big Data’ Victory
- When the Nerds Go Marching In