Description: Andrew Pole had just started working as a statistician for Target in 2002, when two colleagues from the marketing department stopped by his desk to ask an odd question: “If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that? ”
Source: nytimes .com
Date: Feb 16, 2012
As the marketers explained to Pole — and as Pole later explained to me, back when we were still speaking and before Target told him to stop — new parents are a retailer’s holy grail. Most shoppers don’t buy everything they need at one store. Instead, they buy groceries at the grocery store and toys at the toy store, and they visit Target only when they need certain items they associate with Target — cleaning supplies, say, or new socks or a six-month supply of toilet paper. But Target sells everything from milk to stuffed animals to lawn furniture to electronics, so one of the company’s primary goals is convincing customers that the only store they need is Target. But it’s a tough message to get across, even with the most ingenious ad campaigns, because once consumers’ shopping habits are ingrained, it’s incredibly difficult to change them. Read Rest of Story
Questions for discussion:
- What do you feel are the greatest benefits of data analytics in the field of consumer retail?
- Are there any dangers to using data analytics for an organization?
Jillian
I think data analytics in the field of consumer retail is great to an extent. This article suggested that very personal information could be estimated such as salaries, etc. I do not feel that this kind of data is appropriate to collect about individuals. An individual should have some privacy to an extent. However, if I was pregnant and needed specific supplies to get ready for a child and Target wanted to send me coupons for these supplies I would need, then that is wonderful. Data analytics helps the retailer as well as the consumer. As a consumer I love to get deals, and I will shop with whatever retailer will give me the best price, and has the most products I need.
I believe the invasion of privacy can be an issue. An example in this article points out that a teenage girl in high school was pregnant, and the Target’s analytical system identified this and began sending her out coupons that had relation to baby products. This caused grief with the teenage girls father who went to talk to the manager of Target. An apology was later made by the father as he found out that his daughter was pregnant. This type of situation is quiet personal and although the daughter could have denied the fact, I believe target invaded her privacy on this issue.
carl
The benefits are endless for organizations using data analytics to attract consumers. The benefits being they can send flyers to a pregnant ladies house in her third trimester almost before she even shows signs of being pregnant. Catch her when she is at a major turning point in her life and push all sorts of advertising on her, to come to their store. Another benefit is that they know what you are probably going to buy, how much you are planning on spending and where you live. So they will be able to customize advertising that specifically targets you, making it totally unfair for retailers who do not use data analytics. The only downside that I can see for an organization using data analytics would be the cost of acquiring all this personal information. But this must be a very small cost, in comparison to the profits they will receive in additional sales. I do not like how much a company like target knows about their consumers, but it is becoming the norm and in order to be successful many companies will follow. Because yes we are creatures of habit and if it takes the acquisition of personal information to break a consumers habit and start to come to your store, then you have a consumer until another company comes along with a better method to attract you.
IDR
It is hard to believe how much information has become important to businesses. After helping my dad setting up his retail store, I wonder how corner stores, mini marts and other small businesses can make it in today’s world without having all the marketing tools mentioned in the article.
I found the information in the article very useful, somehow scary, but mostly useful. As a business student, I find these practices acceptable and necessary, especially for the main purpose of having a business, which is to make money. When dad and I were looking into buying merchandise for the first time, we had to rely heavily on the supplier. The thought that he could be selling us what he needed to sell, instead of what we really needed, never left our minds. We took a leap of faith and fortunately, most of our products sold out with minimum waste. Have we had enough available information about our market, we would have not had to worry too much and experiment with our products. So, in that sense, data analysis is the business’ best friend.
Sarah Lawson
Data analytics certainly benefit the company using them. They are getting inside the consumer’s brain and putting ideas in their heads. An example of this is described in the article: A customer walking through Target to pick up one item and they happen to walk past other items that catch their interest, they will buy those items too. It seems like a good marketing plan for Target to have everything a person could possibly need, all in one store, but it also makes it a hassle for the number of consumers that just came in for one item. Personally, I find it frustrating that the one item I want is at the back of the store. If I’m shopping for one or two items, I won’t go to large retailers like Target for the sake of time management. The article also talks about the use of personal information such as how pregnant a woman is to determine the products she will buy. I think Target is taking it a step too far. If the person doesn’t want you to know how far along they are in pregnancy, what their age is, or what their household income is, Target shouldn’t be sneaking around to get this information behind the consumer’s back. That isn’t fair to the consumer and is an invasion of privacy. If the person is not wearing a sticker on their forehead that says, I’m a 25 year old female and 6 months, 12 days, and 4 hours pregnant, then Target shouldn’t know that otherwise. Just because they can find this information, doesn’t mean they should.
I would be quite upset if I found out a company was using these “over the top” data analytics to gain personal information about my consumer habits behind my back. Companies that do this sort of thing should be careful of losing customers that find out about it.
Rose
Most Organization view information as cash. Cash flows, so information flows.
It is quite funny, how generated information helps the organization to make decision about the data collected, run analysis on it, and derived a profitable outcome from it. People has needs, and their needs have to be met through the organization marketing products from the store, marts and large supra-market. The higher information the organization can get, the better they would be to reach the desire of the consumers. But my own concern is how protected my information will be save, for how long would they keep it, things changed so my information about consumers can change at anytime. Would the organization keep consumers updated about the changes made or consumers have to walk up to them and tell them about changed the information. For example, information collected information about consumers five years ago, might not be relevant in today’s decision. Demographics information like age, work, lifestyle etc. With the help of technologies, company can minimize the risk involved, by updating their database, delete what it is not relevant and pursue with a mind of winning the goal.
Sarah Fletcher
I think there are definitely a lot of benefits to corporations when they use consumer analytics in the field of retail. Obviously it works or they wouldn’t do it. It’s also obvious that the benefits outweigh the disadvantages to this method or else they wouldn’t do it. It benefits the corporations because it’s a way for them to increase sales in particular items. It can also benefit the end consumer because they save money on things they actually want to purchase. I definitely feel as though a line of ethics can be crossed along the way. Consumers should have the right to a certain level of privacy. Just because corporations can do this doesn’t mean that they should use consumer analytics. Even if it makes the corporation money, it can be the wrong thing to do. However, this seems unimportant because it’s a business and their sole purpose is to make money. I think at the end of the day it depends on the companies values. However, companies should be careful when using consumer analytics because there are dangers that it may upset consumers. If consumers find out what is going on and become upset then this could result in bad publicity for the company.
Garang
The greatest benefit of data analytic are vast for both the retailers, companies, producers and prospective Consumers. As a matter of fact, data is like a “raw material” for retailers; wholesalers and manufacturers. They need data to guide their line of products, best fit and quantity desire by their consumers.Equally important, majority of consumers are more happier and satisfied if they get their products of their choice. Data gathering and analysis allows the producers, retailers and wholesalers provided the goods and services to their customers based on their choices. Besides the good sides of data analysis, there exist a few weaknesses when an organization mismanage the information they gathered from their customers. One key example is the increasingly identity theft. unfortunately, some organization do not value the privacy of their customers which in extreme instances, the information may fall under the hands of hackers.
Rasika
As this article suggests, using a data analytics could give an organization a competitive edge over its competitors. I think, using our personal data to market products has pros and cons for both organization and consumers. Organizations may benefit from increased revenues; on the other hand, it could lose consumers for invading their privacy. As a consumer, I would like to receive free coupons and discounts for the stuff that I need to buy. I think this is the compensation we get from the companies for having our personal data in their data banks.
As we learned, there are many ways that companies could acquire a customer data base that includes customer purchasing behavior, demographic details, salaries, and so forth. This is beneficial for companies and can help the consumer to some extent. But it can also be a threat to the consumer as the companies can reveal confidential and personal issues about the consumer to the public. This is a major privacy concern. Consumer benefits by knowing about great deals. For example, a first time pregnant woman may not know where to start. A departmental store can help the woman through their advertising as to where and what to buy. But this can also lead the customer to lot of unnecessary expenses.
Tyler
The greatest benefit of data analysis in the field of consumer retail is for both the customer and the retailer. By knowing what consumers are interested in the retailers are able to target what they consumer wants with coupons and such they are able to get them to come into the store to buy their products while at the same time consumers are able to get a better deal on products that they want since the retailers are able to give them coupons on items that they will actually buy instead of simply getting a flyer that’s filled with random coupons that they would never use. If they’re able to get them into the store happy with their shopping experience it makes it easier to get them to keep coming back to shop there.
However there are some concerns with this kind of marketing. When retailers are tracking all this information about their customers privacy concerns really start to grow. If a retailer is tracking all this information without informing or asking permission of the customer they may feel that their privacy has been violated and not want to shop there in the future so the retailers must be careful not to do things that may come across as unethical.
Claudia
– Data and focus groups can help marketer to successfully fill the needs of the consumer with the products that would be of the most demand and offer less buyers remorse or options for substitution.
– real answers from patrons
– ability to constantly adapt to new markets
-incorrect data
I think that the greatest benefits that come out of this type of data collection are that marketers will be more successful at marketing towards the proper demographic. Marketing is a very intangible thing to invest in, therefore, companies that can see any benefits from data collected through focus groups and other forums are far more willing to invest money and research into proper marketing. This gives retailers and suppliers the information needed to provide the services and products that are in demand. It also allows companies to adapt to the consumer quicker and continue to gain or hold their market share.
The only really dangerous threat would be the quality or the information. The decisions being made need to be based off of data that is current and applies to the specific marketing question being asked. I think organizations will continue to data mine and analyze their consumers to be able to remain flexible, profitable, and alive.
Claudia
I think that the greatest benefits that come out of this type of data collection are that marketers will be more successful at marketing towards the proper demographic. Marketing is a very intangible thing to invest in, therefore, companies that can see any benefits from data collected through focus groups and other forums are far more willing to invest money and research into proper marketing. This gives retailers and suppliers the information needed to provide the services and products that are in demand. It also allows companies to adapt to the consumer quicker and continue to gain or hold their market share.
The only really dangerous threat would be the quality or the information. The decisions being made need to be based off of data that is current and applies to the specific marketing question being asked. I think organizations will continue to data mine and analyze their consumers to be able to remain flexible, profitable, and alive.
Maria Rana
I think data analytics in the field on consumer retail are very beneficial for these organizations. This is because it helps an organization figure out who their customers are and which market to target. It can also help them target new consumers and place products in a way that will be most beneficial. They can figure out your buying preferences and how much you are willing to spend. This can help organizations advertise in a way that best suits their research. However, I do feel like some of the information that these companies can invade an individual’s privacy even though this information is probably kept private. It is kind of freaky that they can figure out that you are pregnant and which trimester you are in. This is personal information that I do not think random store management or staff should be aware of. In the article, it says that they can even figure out what websites you visited and which topics you talk about online. I feel that is invading a person’s privacy especially since they are not aware of what the company is doing. I think it would be fine if it were all done with the person’s permission.
Chance Engel
The greatest benefits of data analytics in the field of consumer retail can be summed up as the basic who, what, when, where, and why, approach. Using data analytics helps retailers to know Who you are, What you like and dislike, Where you go doing all of your everyday activities, When you do everything you do such as when you are at work if you do work, and these can help them determine why you do the things you do or purchase things when you do if they dont already have that information. From there they can use this information to create a strategy to get information about products that they know you are interested in, to you, in the most productive and effective way. I think that the obvious downfall to using data analytics is the invasion of peoples privacy.
Mattie E
I think the greatest benefit of data analytics in customer retail is the ability to reach a larger market and a larger number of consumers. By knowing its customers, a customer can better predict what they will buy in the future and can then market its products more effectively. As in the Target example, the company can market baby items to expecting mothers and have a competitive advantage over other big box stores. I think using these strategies is a smart business practice; however companies must be careful to respect their customers and not offend. People do not like their privacy invaded, and data analytics can be alarming to some people. It makes me slightly uncomfortable that companies can know even the most intimate details of my life. If these corporations are not careful, they might find that a customer feels the same way and decides to file a lawsuit against them. I think these data analytic practices are extremely useful for businesses, but they should be used cautiously, as to not offend their valued customers.
Le Liu
As the market developed so rapidly and companies provide more and more varieties, customers today becomes more demanding but less loyalty today. The customer of one company does not mean it will be forever. Thus, companies are all trying to know their current customers and reach the potential consumer groups. Data analytics in the field of consumer retail provides huge amount of benefit for companies. There are many different categories of analytics like Introducing Analytics, Descriptive Analytics and Predictive Analytics. The researchers use the data to find out customer satisfaction, target customers more effectively, response more quickly to market changes, increase employee productivity etc. the data analytics helps the company gain competitive advantage as a whole.
The issues raise at the same time is about privacy since the companies are not just studying shopping habits but also personal habits. When customers make purchase, the information like “your age, whether you are married and have kids, which part of town you live in, how long it takes you to drive to the store, your estimated salary, whether you’ve moved recently, what credit cards you carry in your wallet and what Web sites you visit” will all exposure to other people without your recognition. Publics may concern about their privacy right.
Veronica
Wow! I think using data analytics is important in a company however if the company doesn’t want to discuss anything to possibly “improve” viewpoints in this article then maybe the author nailed it. I think they took it too far and went a little to personal. A lot of that information isn’t any of their business. At the same time a child changes everything so every coupon helps. But being greedy and taking too much information can be a company killer once other people hear about how intrusive their system is. Often times a person won’t even share with their loved one who they voted for in a political election so why should a stranger know? I get it, companies are going to take, buy, and sell our information but is any of the benefit ours? I think this article, Target in particular questions the ethics of the business, is it wrong to exploit someone to make a dollar? I think it is.
Amby O
I think it’s very uncomfortable for companies to have such great power over your personal life. There is no privacy anymore in this world and if you want privacy, you have to pay for it. I don’t think that is a just or ethical way to live. Why do we as individuals have to pay for our privacy just because we don’t want to have anything to do with the rest of the world? It really bothers me. I understand that data analytics can be an advantage because by knowing what individuals want, they can target the right things to purchase and produce for society. However, companies have to be aware that not everyone will want their personal or private information out there. They need to be very careful as to how they retrieve customers information and also open to customer’s taking this to another level such as the court for invading their privacy. Like i said before, not everyone is comfortable with their personal life information being used simply to collect data. Data analytics is indeed advantageous for business practices but they have to be careful as to respecting customer’s privacy or letting the customer know what they are doing.
Xuan Wang
The greatest benefits of data analytics in the field of consumer retail is customers can buy the right goods at a good price more easily. Some people do not like the retailers get too much information from customers because it is not fair to customers sometimes. This information may contain some private information and may make customers feel not comfortable if they know the retailers use this kind of information to find what they need to consume, such as the salaries. But I do not agree to this argue.
All kinds of information are all important to the consumer retailers. There is not the privet issue, but this is the business issue. Even though some information is a kind of private, the retailers only use this information to find the customers’ need. The retailers target is good and they do not want to hurt any customers’ feeling. And the customers also can get benefit from the data analytics and do not need to be very sensitive about the private issue.
Data analytics is good for an organization except the bad purpose data analytics. People who are charge to do the data analytics must have a responsible sense for this job. Or it can make many troubles for a organization.
Keely
The greatest benefits of data analytics is being able to determine what type of goods consumers are looking for. By using data analytics, stores are better able to price items, put on promotions and determine what types of items to have in their stores. Although, it may not be entirely fair to the customer, as their private information is being investigated to determine which goods will most likely keep them coming back for more visits.
Although in the long run it is in the company’s best interest to buy people’s personal information, is it ethically correct? I don’t believe it is, it may be a good thing, in the fact that the company can better assess your needs and find out what exactly you are looking for in order to make you shop more at their store its a good thing. But, they’re using your personal information to determine not only what you need, but also what you may just pick up because you walked by and it was on special, its almost like brainwashing you into buying something because it was there for cheap.
I don’t believe using data anayltics is ever bad for the company. Although, if the people in charge of analyzing the data aren’t careful and don’t do it correctly, this could be bad news for the company. If the data is not analyzed properly companies may end up buying different goods for their store which may not be needed, or may just end up sitting on the shelf, selling very rarely.
Jenn Burton
I think that marketers are trying too hard at marketing items. Items such as: newborn baby clothes, diapers, furniture. These items along with the multitude of others are becoming more easily found and in more stores. Stores like: Wal-Mart; Target; and Superstore, are over marketing the ‘one-stop’ shopping idea and a barrage of companies causing confusion and higher stress.
Higher stress that, more stores need to be doing this or consumers having too many choices and statistical analysts feeding a marketers “wet dream” before and ad campaign is launched. With Target trying to find a way to know when a consumer is pregnant before she gives birth, just to get to her before another store, seems to take the joy out of being new moms before the baby is born. I know many females that when pregnant utilize word of mouth and the web to find best bargains and stores to shop at. If a store sends out personalized marketing, it would be nice to see a store cares; however, in reality it is a computer program that tracked and reminded a marketer that you need to receive a special promotion card.
Having a personalized marketing strategy is awesome in theory but in reality you need the manpower to implement and in the end takes the human element out of the sanctimonious event that is telling others your pregnant, telling only a select few what’s happening, and the peacefulness of enjoying the chaos that is “what do I do now?”, “where do I start?”.
Rod white quills
in todays market getting the upper hand on any consumer is key to the survival of any company. and with this type of information avalable to almost anybody why not use it to your advantage stores like target are finding information about almost anything from what you buy to what you need at the present time in your life. like the story that jim told about the guy who was getting calls about baby supplies when he knew he wasn’t having a baby but his daughter was. for me this type of information goes a little to far into the personal lives of the consumer but they are trying to get the upper hand and get the most business. that is what they are being paid to do, is it unethical maybe but anybody can get this information thanks to the wonderful world of computers. really marketers will go to any lengths to sell there product and stoop to any level of course not all marketers do this but most do and will. for me i still go to the grocery store for groceries and wal-mart for pretty much everything else. butwill it change most likely and walmart will eventually be where i go for even groceries.