I know you are wondering what this article is all about. After all, I run Austin's leading linen service, not a pregnancy center.
In 2012, coupons for maternity goods began arriving at a Minnesota home from a local Target store addressed to the teenage daughter living at that house. The father not amused by this marketing strategy took the coupons with him and visited the local Target store. He confronted the store manager demanding to know if Target was now trying to encourage his impressionable young daughter to get pregnant. Naturally, the manager apologized. He even followed up with a phone call a few days later to apologize again.
On that call, the father, embarrassed thanked the Target manager for the call and apologized to him. He said, "It turns out there have been some activities in my house that I haven't been completely aware of. My daughter is due in August. I owe you an apology."
Target had figured out that this teenager was pregnant before her father did!
The answer: BIG DATA.
Retailers know the major life events like going to college, new buying habits, or even starting a new job, which they are eager to take advantage of.
For example, Gillette sends teenage boys free razors on their 18th birthdays. Similarly, pregnancy is a pivotal moment for retailers because new mothers need baby clothes, cribs, formula, and will be spending hundreds if not thousands of dollars along the way.
Because birth records are public, new parents get inundated with new offers from retailers encouraging them to try their business. To stand out, retailers like Target need to preempt birth and start much earlier by reaching expectant mothers as early as the second trimester, when they begin needing maternity clothes and prenatal vitamins.
Therefore, retailers like Target need to predict and preempt pregnancy or other situations to influence new buying habits.
To do this, they use data they gather about their customers buying habits so that they can target offers to you.
Two of the biggest retailers, Target and Walmart, assign each credit card used in their stores a unique code, which they use to track and understand a customer's purchase history and with marketing automation, they begin using targeted messages enticing customers based on their interests. Target, in this case, calls their code the "Guest ID number."
It's not just purchases, though. Target will link a lot more information to your Guest ID as noted here by Andrew Pole, Target's Director of Guest Data:
"If you use a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an email we've sent you or visit our website, we'll record it and link it to your Guest ID."
Demographic information including your address, age, ethnicity is also tied to your Guest ID. Target will also use public records to learn when you were born, got married, had kids, or even if you got a divorce.
As you can already imagine, Target uses this data to predict buying patterns based on your behavior. Target found that women who suddenly bought large amounts of unscented lotion were likely pregnant and around their second trimester because these purchases tended to correlate with births a few months later. Pregnant woman were also likely to purchase vitamin supplements like zinc, calcium, and magnesium.
Eventually, Target identified a group of roughly 25 buying habits that, when analyzed together, would let the company assign each shopper a "pregnancy prediction" score. With this "predictive analytics" solution, Target can predict pregnancy with 87% certainty.
As the example of the pregnant teenager, Target might even know soon-to-be-moms better than their parents!
Techniques like this have helped Target boost it's overall revenue. The challenge for retailers is capitalizing on customer insights without being creepy.