Data Collection
Here’s how using customer data might get you in trouble.
Marketers from Target were able to analyse the shopping habits of customers who scanned their loyalty cards when paying.
Predictive Shopping Habits
Once they had collected enough data, they were able to create what’s called “predictive shopping habits” for each customer.
Through this, they were able to predict for example when a woman was pregnant so they could start to send her catalogues with coupons and discounts specific to pregnancy and maternity products. They could even figure out what trimester she was in and come pretty close to predicting her due date just by the type of products being purchased.
Using all the data collected, they would then assign “a pregnancy prediction score” to each customer.
For example:
Jenny – whose 23-year-old from Atlanta, bought coco butter lotion, a purse large enough to double as a diaper bag, zinc, magnesium, and a bright blue rug, there’s a 87% chance she’s pregnant and her delivery date is sometime in late August.
Liz – 35 years old and from Brooklyn, purchased 5 packs of wash clothes, sensitive skin laundry detergent, baggy jeans, vitamins containing DHA, and a few different types of moisturisers, she’s got a 96% pregnancy prediction score, and will probably give birth in early May.
Caitlin – 39 years old from San Francisco, bought a $250 stroller, but nothing else, she’s probably buying a gift for a friend’s baby shower.
Even though it’s all within the law, all this data collection made some people pretty uncomfortable, and it even landed Target in a bit of trouble.
The Angry Customer
About a year after Target implemented their ‘pregnancy prediction model’, an angry man walked into Target demanding to speak to the manager.
He was holding onto a catalogue his daughter had received in the mail, saying “she’s still in high school, and you’re sending her coupons for baby clothes and cribs. Are you trying to encourage her to get pregnant?”
Since most of the advertising decisions were made at headquarters inside the marketing department, the Store managers had no idea what he was talking about.
The store manager looked at the catalogue. Sure enough, it was addressed to the man’s daughter and contained advertising for maternity clothing, nursery furniture and pictures of smiling babies. The manager apologised over and over, and then a few days later decided to call back and apologise again.
On that second call though, the father said: “I actually have to apologise, I had a talk with my daughter, apparently there’s been some activities in my house that I haven’t been completely aware of, she’s due in august”.
If you haven’t already done so, purchase the book “Think Again” by Adam Grant – “Brilliant… guaranteed to make you rethink your opinions and your most important decisions.”
