Being a new parent is expensive, so what company wouldn’t want to tap into the gold mine? First, there is maternity wear, then the constant need for new clothes as the baby grows and a mountain of diapers!
If you have to hope for major life events to gain customers, a child’s birth is more pleasant than the dreams of custom coffin makers.
For brands it is a unique opportunity. When it is someone’s first child, they need to form a new habit. Who should they go to for everything they need? If they already shop with you, you don’t want them looking elsewhere.
They may have never ventured into your baby food aisle before. If you can make them aware of all the products you sell then the dollars will pour in.
But this is no secret. Any business this attractive will have competitors hovering around trying to get a piece of the pie.
Not every company is Target though. They sell everything and are one of the most recognizable brands in the United States. Multi-billion dollar revenues and hundreds of thousands of employees is a clear advantage. They have a huge amount of data to analyze from their membership schemes.
Birth records are public so every company can reach out to parents by then. It’s too late. Maternity wear is a leading indicator but it’s also too late. The mother would have already needed to make some decisions for Target to tag them. If the soon-to-be mother chose to buy maternity elsewhere, the advantage is lost.
Charles Duhigg, in The Power of Habit, uncovered their plan. Target had a brilliant and slightly sinister idea to identify these customers earlier. Now what exactly they looked for isn’t disclosed and I’m smarter than to try to speculate about what the signs were. Enter Andrew Pole, a statistician who created an algorithm to do precisely this. He found 25 products could be used to predict pregnancy and assign a score.
When every female cardholder was analyzed, well over ten thousand had high scores. Now Target could pre-emptively target this market. Yes, I am proud of that pun. They would send coupons for baby-related items to anyone the algorithm highlighted. What could possibly go wrong?
They were too good, that’s what went wrong. A father of a high school girl was furious at baby coupons being mailed to his daughter. In his mind she obviously wasn’t pregnant and it was totally inappropriate. The store manager apologized and felt so bad he rang the father a few days later to say sorry again.
Yet the situation flipped. The father was now apologizing to the manager for his anger. After talking to his daughter, he found out she was pregnant. Can you imagine the embarrassment of telling the Target manager this?
“I had a talk with my daughter. 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.”
While they were correct in this case, it’s clear how this could turn customers away. It’s pretty creepy for a department store to know you are pregnant before you’ve told anyone.
It reminds me of a scene from Modern Family where the real estate agent stalked his client to make the house perfect for them. Once the client realized the estate agent knew his dog’s name and birthday, he ran away!
Target learned from experience and changed their strategy. They sent baby coupons amongst other unrelated items. Now it wasn’t so obvious what Target had done but the seeds were still planted.
There’s a great takeaway from this story for marketers everywhere. In the age of big data, people don’t like to feel violated. Don’t be so direct if you draw powerful insights from your analysis.
To paraphrase Google’s old mission: don’t be creepy.
Thank you for reading and have a wonderful day.