(Aside: I wrote this offline and just saw Sunil's below. I think it complements the data mining posts.)
With companies ranging from credit cards to retailers collecting all kinds of consumer data, it’s no wonder that “data scientist” is one of the current hot jobs. Also, today’s successful CMOs must learn to “harness customer data and leverage it” based on a recent Ad Age article. With digital data collection, the granularity can be so precise as to target an individual, and seeing patterns in data– such as understand shopping preferences and behavior - bring new marketing and business growth opportunities.
Now you intersect this with psychology, specifically habit formation, and you get the case of how the giant retailer Target was able to move in the minds of consumer beyond the place to buy cleaning products or toilet paper to a “mom, baby, and beyond” shop, hence growing revenue from $44 billion to $67 billion between 2002 and 2010. The February 19 NY Times article, How Companies Learn Your Secrets, demonstrates how Target marketers went after the pregnant mom segment using the predictive analytic capabilities of their statistical team. They tied in all sources of data (including purchased data) and linked it to a unique Target guest ID. Target’s marketing team also had to learn to temper the power of their data and subtly encourage spending without consumers feeling like Big Brother was watching…and knowing something personal about their lives.
If you’re a Target shopper and you read this article, you may be unnerved at the kinds of data they have on you. How far will they go to grow to $100 billion revenue? Based on Forrester analyst Josh Bernoff's take, "The only sustainable competitive advantage is knowledge of and engagement with customers," this means more targeting by Target and others.
What do you think as marketers and consumers?
That NY Times article is fantastic! Thank you for sharing Junko. It's often easier to speculate then actually execute and Pole has executed Target's Mom & Baby Strategy brilliantly. Another example of how important engagement and behaviour is opposed to "likes" and "followers".
ReplyDeleteI think that customers are willing to have data collected on them if it is used responsibly, especially if they receive some sort of benefit from it. It's great for marketers, because there is a lot of waste and inefficiency in marketing. The data helps marketers to be more effective in how they use their time and resources and reduce waste- both for the customer and for the company.
ReplyDeleteAnother example of predictive modeling :)
ReplyDeleteLast week, I tried walking into Target, but I missed, so I tried a couple more times and finally made it inside, where a lady from Target asked if she could help me, and I replied, no thanks, just practicing.
ReplyDeleteAgain, all joking aside, I've always been fascinated with their logo: why they chose it and what it really means.
Now, after reading the NYT article, and whew that was a long one, I think their Target logo may be the most appropriate logo in all of merchandizing, only we should be the ones wearing the logo, not them.
As a person that values his privacy, I don't like this "predictive modeling" at all, but as Mark Zuckerberg says, "The age of privacy is over."
But what's the benefit? After every marketer starts practicing this "targeting," will it still be an advantage -- or will they be back at relative zero sum? I say zero sum, but we will still have, irreversibly, lost our privacy.