This piece (the cover story in tomorrow’s New York Times Sunday Magazine) is a great look at how corporate America studies and seeks to influence our shopping behavior. Charles Duhigg takes readers inside the world of predictive analytics, in which statistics, cognitive science, and market research combine to pinpoint consumers’ shopping habits and the ways/times that retailers can influence them. The article includes a case-study of Procter & Gamble’s Febreze and a look at Target’s extensive work in this area, including their effort to identify and change the shopping behavior of pregnant women.
As Duhigg details, habits — including purchasing habits — “aren’t destiny — they can be ignored, changed or replaced. But it’s also true that once the loop is established and a habit emerges, your brain stops fully participating in decision-making. So unless you deliberately ﬁght a habit — unless you ﬁnd new cues and rewards — the old pattern will unfold automatically…. Andrew Pole was hired by Target to use the same kinds of insights into consumers’ habits to expand Target’s sales. His assignment was to analyze all the cue-routine-reward loops among shoppers and help the company figure out how to exploit them. Much of his department’s work was straightforward: find the customers who have children and send them catalogs that feature toys before Christmas. Look for shoppers who habitually purchase swimsuits in April and send them coupons for sunscreen in July and diet books in December. But Pole’s most important assignment was to identify those unique moments in consumers’ lives when their shopping habits become particularly flexible and the right advertisement or coupon would cause them to begin spending in new ways…. 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, [UCLA Professor Alan] 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.”
J and I are regular Target customers, and a few weeks ago found ourselves on the receiving end of a fairly obvious example of this kind of marketing. We don’t do much food shopping at Target, but there are a few things we regularly buy there, like Archer Farms Organic Blue Corn Tortilla Chips. We’re pretty devoted to our local, organic, fair-trade coffee roaster, but times are tough, and buying cheaper coffee would save us a few bucks each month. Since we were running low on coffee and had forgotten to pick up beans elsewhere, we decided to try a variety of Archer Farms organic fair-trade coffee beans. Lo and behold, upon checking out, the coupon printer at the register spit out a coupon for — you guessed it — Archer Farms coffee. Their system noticed a change in our shopping, and decided that one way to help make this a permanent change was to nudge us toward a second coffee purchase. It didn’t work (the coffee was mediocre at best, reinforcing what we already knew: for some products, you most definitely get what you pay for), but Target’s predictive analytics department saw a chance to influence our behavior and seized the opportunity.
Duhigg’s entire piece is definitely worth a read (you may find yourself shocked to realize just how much retailers know about you), so check it out.