Stores discover secrets in information goldmine

By carefully analysing our buying habits retailers can discover a great deal about us. A remarkable report has revealed how they do it – but is it moral?

Somewhere in the offices of American superstore Target, a maths whizz is analysing thousands of bills. He’s searching for some very particular items: unscented body lotion, mineral supplements, multipacks of cotton wool.

Why? Women who make these purchases are usually pregnant. And for marketers, that knowledge is gold dust: using it, they can target customers with specially designed promotions and adverts that could make their store impossible to resist.

Welcome to the world of hyper-targeted marketing – the rapidly-growing practice of using data about individuals to tailor the advertising to which they are exposed.

It is sometimes an alarmingly effective technique. The New York Times tells the story of a father storming into Target, furious at his teenage daughter being sent vouchers for maternity clothes. Weeks later, he discovered she had been pregnant for months. Her shopping habits told Target the secret long before her family knew.

Gathering data on individual consumers has never been easier. Each purchase made with a debit or loyalty card adds to a constantly evolving shopping history of each individual. By adding this to search history, internet browsing data and information published on Facebook, companies can create an impressively detailed profile of a person’s habits and interests.

In a crude form, targeted advertising has always been a part of our commercial lives. Upmarket dress designers, for example, place adverts in Vogue, not What Car? Magazine or Gardeners’ World.

But now technology allows advertisers to go much further: Amazon compares similar customer’s purchases to offer personalised book recommendations. Online, search terms and key words trigger the appearance of particular advertisements.

Some instances of this personalisation seem almost Orwellian. Tiny cameras in some Japanese vending machines can tell a hungry customer’s gender and age, and change the goodies on their screens accordingly. Scientists have even developed billboards that do the same, changing their advertisements in response to who is looking at them.

On target

Many find this new frontier of marketing deeply sinister. So much knowledge about us, they say, gives companies an unacceptable power over people’s desires. By altering them to manipulate us, we sacrifice our own free will at the altar of profit.

Advertisers argue that hyper-targeted marketing makes the world a better place. Carefully tailoring each person’s consumer experience to their unique interests means people are not bombarded with stuff they don’t care about, and are more likely to connect with things that are relevant, exciting and interesting to them. What is so wrong with that?

You Decide

  1. Is there anything wrong with targeted advertising?
  2. Should we worry about how much shops know about our habits?

Activities

  1. What would happen if all advertising was banned? Write down a list of consequences, both good and bad. Which side is stronger?
  2. You are charged with making an advertisement for a new shampoo. It is aimed at 15 to 17-year-old girls, whose personal data profile indicates they are interested in popular music, clothes shopping andHarry Potter. Create the advert.

Some People Say...

“All adverts do is lie.”

What do you think?

Q & A

Advertisers might use this knowledge – but it won’t change the way I buy, surely?
Though it might seem that people make free choices about what is in their shopping baskets, the reality is not so simple. Studies show that 45% of our daily decisions are made by unconscious habit, and retailers exploit that. Supermarkets, for example, pump the smell of freshly basked bread through their stores because we are more likely to spend when we’re hungry. Goods with higherprofit margins are placed in our eyeline, where we are unconsciously attracted to them.
So does this equal more sales?
Absolutely. In the period Target started tailoring their advertising, their profits jumped from $44 billion to $67 billion. The rise was significantly credited to the ‘mom and baby’ section.

Word Watch

Internet Browsing Data
Information about search history, and the websites people view during internet sessions, can tell companies valuable information about a consumer. It can be accessed using information like the IP address, which identifies a particular computer or set of computers, and cookies, which travel between a web browser and the server it is accessing. They allow servers to distinguish between individual users of web pages, which makes it possible to build up information about how a website is used.
Orwellian
This word is used to describe a situation reminiscent of the works of George Orwell – in particular, his imagining of a totalitarian state. In his book 1984, Orwell imagined a society whose citizens were constantly observed by ‘Big Brother’, and in which any dissent was spotted and brutally punished. Its frightening suggestions are often quoted today as a warning against over-use of surveillance, like CCTV or giving companies access to personal data.
Profit Margins
Profit margin is the percentage of revenue remaining after the costs of a business have been subtracted. Supermarkets typically sell goods at margins of around one or two percent.

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