The Target store knows your family member’s pregnancy
progress better than you do. Can you believe it?
For many people, this might be hard to even imagine, but it
can be true if you shop there often. Just three years ago, New York Times published an article that raised a lot of tension on the topic of data mining. The
story started with an angry father stormed into a Target store in Minneapolis demanding
to see the manager. The father assail the store’s abrupt move of sending her
teenage daughter coupons for baby clothes and cribs, accusing the store for
encouraging teenagers to get pregnant. The store manager was so confused by the
strange event, he gently apologized and called back a few days later to console
the family. To his surprise, the father had a conversation with his daughter
and apologized to him instead and said: “It turns out there’s been some
activities in my house I haven’t been completely aware of. She’s due in August.
I owe you an apology.”
All these might have been shocking for many, but definitely
not statisticians such as Andrew Pole who was hired by Target to do data mining.
Just a couple of years back, the terms Big Data, Data Mining were still vague to
the general public but a small group of people. At that time, people had already been
utilizing computers to improve work efficiency in various organizations, yet not
so many have imagined how Information Technology could revolutionize the way we
actually conduct businesses, especially marketing. Target is one of the many companies who are
utilizing the amazing power of these methods to improve their business conduct,
well, “improve” might be hard to justify given the unpleasant experience of the
father. Nevertheless, these methods do open doors for future development in how
marketing and sales are conducted. As much evidence would suggest, this is just
the commencement of a greater trend. But how do the consumers view it?
Every technology advancement we made could be a double edge
sword, Data Mining is no exception. If not played safely, there is no guarantee
that the power would not backfire. For businesses who rely heavily on long term
customer loyalty, more often than not this could lead to a massive publicity
crisis where thousands if not millions of customers would be affected. For
example, when Facebook just started to put ads in the event streams on people’s
Facebook page, there were a lot of push backs from users who view this as an
insult to their privacy. However, these ads did prove to be more effective than
billboards on the streets. A lot of the firepower of these targeted online ads actually
come from data-mine information that people voluntarily post on their webpage. Assuming
most of these information is true, Facebook actually knows you so well that
they probably know more about you than any one of your friends or even your
parents. This offers the online marketers great potential to present suitable
products to people who have the highest probability to be converted into
customers, not to mention the speed this matching process has.
One anecdote I heard from before is about a jeans retailer
who had a lot of trouble selling off the remaining stock of its jeans. When they
advertised on Facebook targeting people based on their posts, they had a much
higher conversion rate since people who were targeted were inherently more
likely to purchase giving effective data mining methods. The retailer sold out all their stock, and
the newly acquired customers found their jeans at a cheaper and more efficient
way, who wouldn’t say it is a win-win situation? Although not every story
turned out to have a happy ending, people do take advantage of the benefit of
data mining results when they are presented appropriately.
So what might the future be for data mining and
statistical-model driven online marketing? No one knows, but it do seem like customer
analytics and purchase predictions are growing, which could potentially help us
find our best-match product in a more efficient way. That been said, it is hard
to judge how fast the society would accept such a way of marketing and sales.
In closing, let me quote Joanne’s comment on the NYT
article: Target, just because you can, doesn't mean you should.
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