In Duhigg’s (2012) New York Times Magazine “Hey You’re Having A Baby!” article, clinical research on human behavior has shed new light on how people develop habits. Target’s understanding of universal cues and rewards, positions them to better allure customers to buy in other product categories. The Target organization takes a data-driven approach to launching campaigns. GuestID numbers and the transactional data assigned to them, provide marketers with insight on how they might want to develop tactics that will not only resonate with customers, but also elicit customer habits.
Target’s statistician, Andrew Pole, could predict with great accuracy whether a customer segment was pregnant and at what stage. Females who loaded up on unscented lotion and vitamins among other items helped Target to customize offerings that resonated with this group. Target singles out women who might be pregnant by tailoring messages and offerings that have the potential to capture and transform the group into high-yield, life-long, repeat customers. Understanding when customers are most adaptable is crucial and can lead to better conversion rates in other product categories (Duhigg, 2012).
Pregnancy milestones and other life changing event, like moving across country can affect consumer behavior. A key observation discovered is that people become more flexible to suggestion at these times, which can provide marketers with windows of opportunities to convert prospects into repeat customers. Target’s approach to customer segmentation of pregnant women is a fascinating example of how an analytical competitor can leverage enterprise-wide data and information to better identify its best customer groups and design offerings that meet that segment’s needs. Target’s ability to analyze a combination of factors at a moment’s notice gives the retail giant a real advantage (Duhigg, 2012). The article provides a good example on how new knowledge can affect campaign messaging in real time. However, how far is too far?
1.) Regarding transparency between consumer and marketer, do you think customers who participate in retail loyalty programs be explicitly told that the data collected on their purchases will be used to identify customer segments, which will inform marketing programs on how to best offer products in the future?
2.) From the perspective of a customer, what ethical concerns might become glaring red flags among people who feel their privacy is being compromised?
http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?_r=1&ref=charlesduhigg
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