It’s no surprise that retailers track your purchases. It’s obvious at the grocery store, particularly if you sign up for the supermarket’s loyalty discount program. If you provide your address, you’ll receive coupons and ads tailored specifically to your buying habits. My local supermarket allows customers to sign up anonymously; the coupons are offered right at the point of sale rather than through the mail.
Retailers use shopping habits to profile shoppers. These profiles can be very accurate. When you have a store that sells more than just groceries and wants to be the one-stop shop for every single item one might need for living — like Target — mathematical and neuroscience geniuses can with a high percentage of certainty determine your age, sex, marital status, whether you have children, how far from the store you live, whether you have children or are planning to, and what websites you visit. They can gather data linked to a personal shopping identification number by taking multiple factors into account, including the products you buy, surveys your complete online, and the ads you use and don’t use.
Combine this information with personal data that can be purchased, like what you talk about online, your political stances, and your charitable giving, there is no limit to the level of precision of your customer profile.
An article in the New York Times explains how a customer’s subtle shopping habits — perhaps buying more lotion than usual — resulted in the algorithm determining there was a high probability that she was pregnant. Target began sending ads to her house for products related to babies and pregnancy.
After seeing the ads arrive in the mail, the girl’s father stormed into the store to speak to the manager, blaming him for trying to convince his daughter in high school to become pregnant. Apparently, she was pregnant, but hadn’t told her father yet. She may not have been overtly purchasing baby-related items at Target to trigger this, but you can’t keep secrets from mathematics.
Here’s how that can happen:
[W]hen some customers were going through a major life event, like graduating from college or getting a new job or moving to a new town, their shopping habits became flexible in ways that were both predictable and potential gold mines for retailers. The study found that when someone marries, he or she is more likely to start buying a new type of coffee. When a couple move into a new house, they’re more apt to purchase a different kind of cereal. When they divorce, there’s an increased chance they’ll start buying different brands of beer.
Consumers going through major life events often don’t notice, or care, that their shopping habits have shifted, but retailers notice, and they care quite a bit. At those unique moments, Andreasen wrote, customers are “vulnerable to intervention by marketers.” In other words, a precisely timed advertisement, sent to a recent divorcee or new homebuyer, can change someone’s shopping patterns for years.
And among life events, none are more important than the arrival of a baby. At that moment, new parents’ habits are more flexible than at almost any other time in their adult lives. If companies can identify pregnant shoppers, they can earn millions.
The changes can be subtle. It’s not buying diapers in bulk that triggers the retailer’s pregnancy sensors. It’s the small changes in shopping habits that may not seem obvious to anyone other than the mathematicians and scientists who understand behavioral data and have applied it to customer profiling.
Do retailers have too much information on customers’ behavior, or are you comfortable knowing these companies can paint an accurate picture of your life and use this information to market directly to you? Do consumers have the right to a somewhat private life?
Published or updated February 17, 2012.