Food retailers have an unprecedented ability to zero in on their shoppers. Every time a shopper swipes her loyalty card or runs her credit card, the retailer is compiling important information on when she shops, what she buys, the brands she prefers and how much she spends.
The smart retailers can break this information down to sugar-fine granulation. And few retailers are as smart as Target. “If 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 email we’ve sent you or visit our web site, we’ll record it and link it to your Guest ID,” Andrew Pole, a statistician with Target, told The New York Times’ Charles Duhigg.
Target can use all these data to identify the most desirable customer fragment it feels it has: the expectant household. As a mass-merchandiser, Target wants shoppers to buy everything in its stores, from groceries to toys to lawn furniture. But shoppers have their own proclivities, ingrained in them by habit and behavior – until, Duhigg writes, they’re having a baby.
“There are some brief periods in a person’s life when old routines fall apart and buying habits are suddenly in flux,” says the article. “One of those moments — the moment, really — 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.”
Of course, at that time every retailer is barraging the happy couple with offers, incentives and advertisements. “Which means that the key is to reach them earlier,” writes Duhigg, “before other retailers know a baby is on the way.”
Putting exhaustive effort into the diagnostics, Target began identifying when shoppers suddenly began buying large amounts of unscented lotion; or calcium, magnesium and zinc supplements; or extra-big bags of cotton balls. It allowed Target statisticians to produce a “pregnancy prediction” score and begin reaching out with well-timed coupons.
It also led to some “oops” moments, such as when one of those shoppers turned out to be a high school girl whose father saw these coupons in the mail and put in an angry call to his local Target store. It turned out he had to redirect his feelings inside his household.
The Times article is much more detailed and interesting than I can do justice to in my word-count allotment. If you’re interested in how sophisticated this stuff can get, I suggest you go to The Times web site and read “How Companies Learn Your Secrets” by Charles Duhigg in the Feb. 16, 2012, issue.