Do you carry and use customer loyalty cards from grocery stores, drug stores or other retailers? Do you shop online? Do you know that your shopping patterns and interests are being tracked and analyzed in order to better understand who you are and what you might be interested in buying in the future?
There has been a lot of discussion in the press and other media about how companies are beginning to exploit the huge amounts of data (often called “big data”) now becoming available from Web site statistics, social media posts, loyalty card and credit card purchase tracking and other “big data.” While this new resource can provide valuable market information to designers, manufacturers and distributors, it is not without its concerns and its critics.
Stores rely on loyalty cards to entice customers to shop in their stores by offering discounts to cardholders. But use of the card also allows the stores to track every item purchased and use advanced analytical applications to sort through this data in a process called “data mining” to identify patterns and interests. Based on this deep understanding of the customer, the store can then present special offers most likely to appeal to the specific consumer. The machine at the checkout counter that prints coupons as you are paying for your goods is creating coupons just for you, and the offers you receive in the mail or e-mail weeks later might be specifically targeted to your profile.
And this purchase tracking and analysis is not limited to loyalty card holders. A number of retailers like Target create profiles tied to credit card accounts (their own, as well as the bank card accounts), along with demographic data available from public sources. The only way to avoid this kind of profiling is to refuse any loyalty programs, always pay in cash and refrain from shopping on the Internet.
To me, this advanced marketing is a win-win. The company can laser-focus its marketing efforts, getting the most return for its investment by extending offers only to those most likely to be interested. The consumer gets far more offers that are of real interest; a middle-aged single male won’t have to sort through baby product and feminine hygiene ads to get to the tools and beer coupons.
But not everyone sees it this way. Privacy advocates fear that there is danger in having companies know too much about individuals. And others are just uncomfortable with the idea of a corporation having that much personal information about them.
But “big data” and ever more finely targeted marketing is here to stay. Internet shopping, which is growing as a percentage of all retail sales, offers nearly unlimited opportunity to monitor and analyze individual visitor navigation through the site — allowing the retailer to make suggestions in real time as well as targeting follow-up offers and communications.
“Big data” is a real game-changer for marketing. Companies that ignore the potential of modern analytics will soon find themselves at a distinct disadvantage to those that exploit this evolving technology.
Reprinted from Portsmouth Herald / Seacoastonline.com – May 28, 2012