A while back, a man went into a Target supermarket in Minneapolis.
He asked for the manager.
He said “I find this offensive. Your store has sent this leaflet, personally addressed to my teenage daughter.
Coupons for maternity clothing, nursery furniture, baby-clothes, baby milk, diapers.
My daughter is still in school, what are you trying to do, encourage her to get pregnant?”
It seemed like a mistake so the manager apologised.
A week later the manager still felt bad, so he called the man to apologise again.
This time the man was sheepish.
He said “Ah, there have been some things happening at home that I didn’t know about. My daughter actually was pregnant and she hadn’t told us”.
How did that happen?
How did Target’s mailing system know the daughter was pregnant before she even told her parents?
Like most stores, Target has an enormous amount of information on its customers’ purchases.
But none of that data is useful unless you know what to do with it.
So in 2002, Target hired a statistician called Andrew Pole.
Most customers’ shopping habits are well-formed and hard to change.
The only time they are vulnerable is during lifestyle changes.
Graduating college, moving house, changing jobs, marriage or divorce.
And the biggest lifestyle change of all is having a baby.
If a store can get pregnant customers to buy their baby goods, they’ll buy everything else there too, just for convenience.
But if they wait until the baby is born, it’s too late.
Because they’ll be bombarded with offers from all the other stores.
So Target needed to identify pregnancies before anyone else.
Andrew Pole spotted 25 purchasing changes during the various stages of pregnancy.
For instance: around the third month, women switch from scented soap to scent-free soap.
Around the 4th month, they begin buying calcium, magnesium, and zinc supplements.
Around the 8th month, they begin buying large packs of cotton balls and hand-sanitizers.
But this specific targeting created a problem.
Women began to feel uneasy about Target knowing so much about their private life.
They felt they were being spied on.
And this is where big-data needed creative marketing.
Andrew Pole disguised the contents of the leaflets they sent out.
They would still be full of baby-goods, but now there was a lawnmower next to the diapers, and a wineglass offer next to the baby clothes.
Lots of irrelevant offers amongst the baby-goods.
Now the women didn’t think they were being spied on.
Now they thought they’d spotted what they wanted in a leaflet full of lots of other money-off offers.
They weren’t interested in the other offers, but that didn’t matter.
They were just there to disguise the real offers.
Thanks to Pole’s statistical analysis, Target sales increased by 50%.
From $44 billion, when he was hired in 2002, to $67 billion by 2010.
We don’t need big data, we need smart data.