Your shopping habits are the result of deeply ingrained patterns--and figuring out those patterns and getting ahead of them is "gold" to America's business giants.
Journalist Charles Duhigg explains how companies like Target penetrate those patterns in a new book, titled "The Power of Habit: Why We Do What We Do in Life & Business."
"Companies are very, very good -- better than consumers themselves -- at knowing what consumers are actually craving," Duhigg said on Fresh Air.
Duhigg gives a telling example of Target's system in his New York Times piece:
A man walked into a Target outside Minneapolis and demanded to see the manager. He was clutching coupons that had been sent to his daughter, and he was angry, according to an employee who participated in the conversation.
"My daughter got this in the mail!" he said. "She's still in high school, and you're sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?"
The manager didn't have any idea what the man was talking about. He looked at the mailer. Sure enough, it was addressed to the man's daughter and contained advertisements for maternity clothing, nursery furniture and pictures of smiling infants. The manager apologized and then called a few days later to apologize again.
On the phone, though, the father was somewhat abashed. "I had a talk with my daughter," he 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."
Duhigg joined The Daily Circuit to talk about his book and explain what companies know about you.
Video: How to break habits
Consumers are not that upset about the intrusion by businesses.
Do you mind companies tracking your habits?
I have been agitated by this topic since Duhigg's article was published. I have known (and for a while worked for) Andrew Pole for a number of years; and have spent a number of years developing the capabilities at the heart of this story at a number or large companies.
First, I thought the characterization of Andrew Pole in the article was incredibly misrepresentative. On both a professional, and personal level, he is one of the best people I know in both of those capacities. Shame on Mr. Duhigg for using him as the centerpiece of his book tour.
Secondly, the ability to connect data together in these ways is incredibly powerful. Not only in a marketing capacity, but in many other avenues (social services) that are really only in their infancy. The biggest problem with the current state of "one to one marketing" is not whether or not the ethical considerations are being taken (as those discussions do frequently happen), but rather a lack of transparency into what is being specifically targeted to you and why.
You do see some inroads to this in the online world: with Amazon's recommendation engine and Google's ad engine allowing you to see why something was targeted for you and giving you the option to fix or modify the categories. You also see momentum in browsers for the implementation of the "do not track" button. Lastly, President Obama recently put forth an "Online Bill of Rights" that lay out principles for data collection and use that, if implemented, will have a positive impact on what happens in the online space. Unfortunately these initiatives have been limited to the online space, and most of the work being done by people like Andrew is still very much coupons, catalogs, and direct mail.
My proposal is 3 simple principles that would bring more transparency to the collection and utilization of personal information for marketing purposes.
1. You own your own data: You should be able submit a request to have all of your personal information erased, or see what they have collected--similar to a FOIA request with the FBI, and the ability to correct things that are incorrect.
2. Personalized content should be easily identifiable: At a minimum it should be watermarked with text like "Personalized for you" so that people can see and understand what content is targeted to them.
3. Companies should better disclose when and what they are collecting about you. This type of information should be available in store and online in a similar capacity to the way 1,000s of other things are disclosed.
To me, these seem like common sense approaches that would substantially eliminate a lot of the legitimate concerns people have regarding the collection and use of their data as the terrifying part is fundamentally the lack of transparency to these practices.
Marty Moylan of MPR News did a story about how Minnesota companies use datamining.
Companies track your purchases through barcodes and your receipt. If one buys through credit card, they then get your address. If you do not use a card, or do, they usual ask for your zip code. They then map that information on geographical information systems (GIS), a mapping program. The company then can map out the trends of the kind of uses in that area per zip code, how far you travel to use that store, and then stocks its shelves with specialized distribution and disburses specialized coupons for that area of products readily used. There is other software used, but it all stems from the barcode and mapping it out.
It is not only retail getting into this, but also water utilities, electric utilities, sewer utilities, road utilities, healthcare, land developers, traffic reports, and other industries. Call it efficiencies, call it ‘big brother’, but everybody is getting into specialized mapping.
Guest Charles Duhigg. Photo courtesy of New York Times.
Simply use cash OR use cash to buy a prepaid debit card.
@KerriMPR I never register promo cards (ie.Petsmart perks card) but still get discount, if I pay w cash they cant track me
#dailycircuit It's not that companies KNOW more about you as a result of analytics, it's that they can make better educated guesses.
What's stopping them from selling this information to 3rd parties such as insurance companies ?
Kind of scary to think how valuable this information is to companies, if they will then sell it to others, it could go further than anyone wants. I get enough junk mail as is, would hate to see more of it.
@KerriMPR Cannot grasp why people would PREFER to receive offers for products/services they DON'T need rather than those they DO.
Data Mining has been going on for decades by almost every company that can. If you want to keep your data unknown, your going to have to neglect credit cards along with how you browse the web
@KerriMPR this is why I avoid shopping at big box stores and shop at small businesses. could be used to create "shortage" and drive up price
Excerpt from Duhigg's book about Alcoa (on the Alcoa site.)
In a small town, the local shop owners have "collected" this information forever. When I lived in a small rural area, i couldn't look at a big ticket item locally, unless I was certain that i was going to actually BUY it locally...
What are your bad habits that you want to change? Have you managed to change a habit?
I think people like to think they're so unique but are getting a surprise at how easy it is to track them because we really all have the same habits.
what weirds me out is that twice now my boyfriend and i were having a conversation about something and when we went to the computer and his smart phone the device directed us to a search on what we were talking about...are the devices listening to us...do they have that capability?
When thinking about the data mining. Don't forget the "old" internet. Limited data, full screen pop-ups,and fee for service.
Here's a couple things for those of you concerned about web privacy.
Google tracks everything you do and with their new private policy in place they can now legally cross-reference all your data. (gmail, search, maps, GPS, +1, mobile etc.)
View your data by logging in to your account and then go to:
You can turn it OFF and erase your past history for now. If you don't...later this year they will keep web tracking permanently on for your account.
If you use Firefox to browse the web download the free plug-in "Ghostery"
This plugin blocks all tracking scripts & cookies websites place on your computer for marketing.
It not only blocks tracking code but allows you to see what its blocking and look up the company that's tracking you.
I can not believe the whining about how inconvenient it is to purchase a visa card card or use cash. Almost every major grocery chain in the city has a bank branch in it. Perhaps if people had to do a little more work to spend money, the average revolving credit card debt wouldn't be $15,000+ (or whatever it is).
I do not see an issue with this, welcome to the modern world.
Now that we have the ability to track what everyone is doing and where, we can learn more about ourselves and how we work.
Target sending coupons ahead of time is a bit much, but they would be wise to use data mining techniques to learn about their customers to sell to them more effectively.
Please realize that this is happening everywhere; when this type of data mining is used in a Medical Sense, we call it good care; when this type of data mining is used for security, it is called the Department of Homeland Security. Please realize that this is truly a non-issue and that almost every larger business is using this type of information.
When we shop locally, we VALUE the store owner or clerk knowing us by name and knowing what we need before we ask. We like being known. What's the big deal if its a bigger company employing that same mindset?
Advertising is just the innoucuous tip of the iceberg. It's the sharing of info among entitites that poses the greater problem.
Just one more reason to avoid Target, now a shadow of its humane, Daytons-devised corporate self. I quit shopping at Target back when its CEO, Gregg Steinhafel, made that donation to Emmer's campaign on Target's behalf. His "sorry if anyone was offended" non-apology (read: "Please keep spending your money at Target!") was as bad an none at all, in my opinion. He and his wife have funded Michele Bachmann's campaigns. As long as that creep is in control at Target, I'll stay away.
So what if Target knows I buy tampons and little debbies once a month?
What is the worst thing a company can do with this information?
Send me coupons that I don't have to use if I don't want to?
Am I worried that this giant company with thousands of employees and thousands of customers is going to single me out and judge me for my purchases? Even if I relate it to being stalked by an individual, if all this individual wanted to know was what kind of toothpaste I bought or if I was getting married soon I would be relieved... you know... because I am not getting raped or murdered.