have ever declared bankruptcy, the year they bought (or lost) their house, where they went to college or graduate school, and whether they prefer certain brands of coffee, toilet paper, cereal, or applesauce.
There are data peddlers such as InfiniGraph that “listen” to shoppers’ online conversations on message boards and Internet forums, and track which products people mention favorably. A firm named Rapleaf sells information on shoppers’ political leanings, reading habits, charitable giving, the number of cars they own, and whether they prefer religious news or deals on cigarettes. [197] Other companies analyze photos that consumers post online, cataloging if they are obese or skinny, short or tall, hairy or bald, and what kinds of products they might want to buy as a result. (Target, in a statement, declined to indicate what demographic companies it does business with and what kinds of information it studies.)
“It used to be that companies only knew what their customers
If you use your Target credit card to purchase a box of Popsicles once a week, usually around 6:30 p.m. on a weekday, and megasized trash bags every July and October, Target’s statisticians and computer programs will determine that you have kids at home, tend to stop for groceries on your way back from work, and have a lawn that needs mowing in the summer and trees that drop leaves in the fall. It will look at your other shopping patterns and notice that you sometimes buy cereal, but never purchase milk-which means that you must be buying it somewhere else. So Target will mail you coupons for 2 percent milk, as well as for chocolate sprinkles, school supplies, lawn furniture, rakes, and-since it’s likely you’ll want to relax after a long day at work-beer. The company will guess what you habitually buy, and then try to convince you to get it at Target. The firm has the capacity to personalize the ads and coupons it sends to every customer, even though you’ll probably never realize you’ve received a different flyer in the mail than your neighbors.
“With the Guest ID, we have your name, address, and tender, we know you’ve got a Target Visa, a debit card, and we can tie that to your store purchases,” Pole told an audience of retail statisticians at a conference in 2010. The company can link about half of all in-store sales to a specific person, almost all online sales, and about a quarter of online browsing.
At that conference, Pole flashed a slide showing a sample of the data Target collects, a diagram that caused someone in the audience to whistle in wonder when it appeared on the screen: [198]
The problem with all this data, however, is that it’s meaningless without statisticians to make sense of it. To a layperson, two shoppers who both buy orange juice look the same. It requires a special kind of mathematician to figure out that one of them is a thirty-four-year-old woman purchasing juice for her kids (and thus might appreciate a coupon for a Thomas the Tank Engine DVD) and the other is a twenty-eight-year-old bachelor who drinks juice after going for a run (and thus might respond to discounts on sneakers). Pole and the fifty other members of Target’s Guest Data and Analytical Services department were the ones who found the habits hidden in the facts.
“We call it the ‘guest portrait,’ ” Pole told me. “The more I know about someone, the better I can guess their buying patterns. I’m not going to guess everything about you every time, but I’ll be right more often than I’m wrong.”
By the time Pole joined Target in 2002, the analytics department had already built computer programs to identify households containing children and, come each November, send their parents catalogs of bicycles and scooters that would look perfect under the Christmas tree, as well as coupons for school supplies in September and advertisements for pool toys in June. The computers looked for shoppers buying bikinis in April, and sent them coupons for sunscreen in July and weight-loss books in December. If it wanted, Target could send each customer a coupon book filled with discounts for products they were fairly certain the shoppers were going to buy, because they had already purchased those exact items before.
Target isn’t alone in its desire to predict consumers’ habits. Almost every major retailer, including Amazon.com, Best Buy, Kroger supermarkets, 1-800-Flowers, Olive Garden, Anheuser-Busch, the U.S. Postal Service, Fidelity Investments, Hewlett-Packard, Bank of America, Capital One, and hundreds of others, have “predictive analytics” departments devoted to figuring out consumers’ preferences. “But Target has always been one of the smartest at this,” said Eric Siegel, who runs a conference called Predictive Analytics World. “The data doesn’t mean anything on its own. Target’s good at figuring out the really clever questions.”
It doesn’t take a genius to know that someone buying cereal probably also needs milk. But there were other, much harder-and more profitable-questions to be answered.
Which is why, a few weeks after Pole was hired, his colleagues asked if it was possible to determine who was pregnant, even if that woman didn’t want anyone to know.
In 1984, a visiting professor at UCLA named Alan Andreasen published a paper that set out to answer a basic question: Why do some people suddenly change their shopping routines?
Andreasen’s team had spent the previous year conducting telephone surveys with consumers around Los Angeles, interrogating them about their recent shopping trips. Whenever someone answered the phone, the scientists would barrage them with questions about which brands of toothpaste and soap they had purchased and if their preferences had shifted. All told, they interviewed almost three hundred people. Like other researchers, they found that most people bought the same brands of cereal and deodorant week after week. Habits reigned supreme.
Except when they didn’t.
For instance, 10.5 percent of the people Andreasen surveyed had switched toothpaste brands in the previous six months. More than 15 percent had started buying a new kind of laundry detergent.
Andreasen wanted to know why these people had deviated from their usual patterns. What he discovered has become a pillar of modern marketing theory: People’s buying habits are more likely to change when they go through a major life event. When someone gets married, for example, they’re more likely to start buying a new type of coffee. When they move into a new house, they’re more apt to purchase a different kind of cereal. When they get divorced, there’s a higher chance they’ll start buying different brands of beer. [199] Consumers going through major life events often don’t notice, or care, that their shopping patterns have shifted. However, retailers notice, and they care quite a bit. [200]
“Changing residence, getting married or divorced, losing or changing a job, having someone enter or leave the household,” Andreasen wrote, are life changes that make consumers more “vulnerable to intervention by marketers.”
And what’s the biggest life event for most people? What causes the greatest disruption and “vulnerability to marketing interventions”? Having a baby. There’s almost no greater upheaval for most customers than the arrival of a child. As a result, new parents’ habits are more flexible at that moment than at almost any other period in an adult’s life.
So for companies, pregnant women are gold mines.
New parents buy lots of stuff-diapers and wipes, cribs and Onesies, blankets and bottles-that stores such as Target sell at a significant profit. One survey conducted in 2010 estimated that the average parent spends $6,800 on baby items before a child’s first birthday. [201]
But that’s just the tip of the shopping iceberg. Those initial expenditures are peanuts compared with the profits a store can earn by taking advantage of a new parent’s shifting shopping habits. If exhausted moms and sleep- deprived dads start purchasing baby formula and diapers at Target, they’ll start buying their groceries, cleaning supplies, towels, underwear, and-well, the sky’s the limit-from Target as well. Because it’s easy. To a new parent, easy matters most of all.
“As soon as we get them buying diapers from us, they’re going to start buying everything else, too,” Pole told me. “If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.”
New parents are so valuable that major retailers will do almost anything to find them, including going inside maternity wards, even if their products have nothing to do with infants. One New York hospital, for
