Strategic Marketing: We're All Data Points

Data Collection

About a year and a half ago, I came home to an unexpected package on my doorstep. Inside the box were a free container of infant formula and some coupons for baby stuff.

There was one problem, I didn’t have any children and my wife wasn’t pregnant. I checked the package to make sure it was supposed to be for me and after I confirmed that it was, I just wrote it off as a poorly targeted marketing effort.

It wasn’t until a few months later that I realized how brilliant it was. My wife and I had just started talking about having a baby when we received the package, but how could any company know that? I’m not exactly sure how, but Target does.

In fact, the company is famously able to predict major life changes (especially pregnancy) earlier than anyone else because they have invested so heavily in predictive modeling through big data.  The theory is that consumers loyalty resets around major life changes, so if it can get a family to start purchasing baby products at Target, they will move their grocery shopping there too.

This experience spawned an interest in what large companies are doing with big data, and because I work in marketing, how they do it.

Fast forward to a few weeks ago. I was standing in line at Target listening to a sales pitch from a cashier to the customer in line in front of me. She was pushing a loyalty card that promised a 5% discount on every purchase. The catch? Use the card as a debit card, linking it to your bank account.

Immediately I realized what Target was doing. Their new REDcard gives consumers a small savings in exchange for massive amounts of data that it would otherwise have to purchase from third-party data collectors. Now, Target can see each of your purchases, even those outside of the store, and plot trends in your spending in order to predict major life changes.

I’m undecided whether or not I think this level of data collection is creepy or cool. As a consumer, I’m skeptical about any entity having this much of my personal information. But as a marketer, I think it will ultimately benefit consumers. It will create personalized shopping experiences that generate loyalty leading to fiercer competition among companies.

What will be interesting to watch over the next few years is where consumers draw the line.

How much is too much data? Is there even a line to draw?

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