Picture yourself walking into your local supermarket. What's the first thing you encounter? In all likelihood, it's fresh fruits and vegetables, laid out in lush piles. But, if you consider this for a second, it doesn't make much sense. As fruit and veggies tend to be soft and are easily damaged by other cart products, they should be displayed closer to the registers. But marketers figured out long ago that if we begin our shopping by filling our carts with fresh, healthy items, we're more likely to buy unhealthier products, like snacks and cookies, as we continue to shop.
This might seem pretty obvious. But retailers have figured out far subtler ways to influence customers' purchasing habits. For example, here's a surprising fact: most people instinctively turn right when entering a store. That's why retailers put their most profitable products to the right of the entrance.
As sophisticated as these methods are, however, they have one big drawback; they're all one-size-fits-all and don't account for differences in the purchasing behavior of individual customers. However, over the past few decades, increasingly sophisticated technology and data collection have made it possible to target customers with breathtaking precision. One of the true masters of this game is the American retailer Target, which serves millions of shoppers annually and collects terabytes of data on them.
In the early 2000s, the company decided to use the full force of its data to target a particular segment of the population long known to be one of the most profitable: new parents. However, to get a leg up on its competitors, Target wanted to do more than market to new parents; it wanted to draw in expecting parents before their babies had even arrived. It set out to determine pregnant women's purchasing habits to accomplish this.
In the end, Target's analysis worked so well that it was marketed to a pregnant teenage girl who hadn't yet told her family about her situation. Target sent her baby-related coupons, prompting her father to pay the local Target manager an angry visit: "She's still in high school," he said. "Are you trying to encourage her to get pregnant?!" When the truth came out, it was the abashed father's turn to apologize.
But Target soon realized that people resented being spied upon. So for its baby coupons to work, it figured out a clever way to bury them amid random and unrelated offers for things like lawnmowers and wine glasses; the offers had to seem like the familiar, untargeted ones.
Indeed, companies will do their best to make it seem familiar when trying to sell anything new. For example, radio DJs can guarantee that a new song becomes popular by sandwiched between two existing hit songs. New habits or products are far more likely to be accepted if they don't seem new.
Target got a lot of flack for its invasive approach to marketing, but that doesn't mean it wasn't a smashing success. Due largely to its work with targeting pregnant women, the company's revenues grew from $44 billion in 2002 to $65 billion in 2009.
