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By accessing this password protected document, you are verifying that you are enrolled in this course and are using this document for coursework. The complete text of the U.S. copyright law is on Reserve at both the Main Library and Science Library Reserve Desks. How Target Knows What You Want Before You Do e 183 himsel£ He once threw a party and polled everyone on their favorite jokes, and then attempted to create a mathematical model for the per­ fect one-liner. He had sought to calculate the exact amount of beer he needed to drink in order to work up the confidence to talk to women at parties, but not so much that he would make a fool of himsel£ (That particular study never seemed to come out right.) But those experiments were child's play, he knew, to how corpo­ rate America was using data to scrutinize people's lives. Pole wanted in. So when he graduated and heard that Hallmark, the greeting card company, was looking to hire statisticians in Kansas City, he HOW TARGET KNOWS WHAT YOU submitted an application and was soon spending his days scouring WANT BEFORE YOU DO sales data to determine if pictures of pandas or elephants sold more When Companies Predict birthday cards, and if"What Happens at Grandma's Stays at Grand­ (and Manipulate) Habits ma's" is funnier in red or blue ink. It was heaven. Six years later, in 2002, when Pole learned that Target was look­ I. ing for number crunchers, he made the jump. Target, he knew, was a whole other magnitude when it came to data collection. Every year, Andrew Pole had just started working as a data expert for Target millions of shoppers walked into Target's 1,147 stores and handed when a few colleagues from the marketing department stopped by over terabytes of information about themselves. Most had no idea his desk one day and asked the kind of question Pole had been born they were doing it. They used their customer loyalty cards, redeemed to answer: coupons they had received in the mail, or used a credit card, un­ "Can your computers figure out which customers are pregnant, aware that Target could then link their purchases to an individual­ even if they don't want us to know?" ized demographic profile. Pole was a statistician. His entire life revolved around using data To a statistician, this data was a magic window for peering into to understand people. He had grown up in a small North Dakota customers' preferences. Target sold everything from groceries to town, and while his friends were attending 4-H or building model clothing, electronics and lawn furniture, and by closely tracking rockets, Pole was playing with computers. After college, he got a grad­ people's buying habits, the company's analysts could predict what uate degree in statistics and then another in economics, and while was occurring within their homes. Someone's buying new towels, most ofhis classmates in the econ program at the University of Mis­ sheets, silverware, pans, and frozen dinners? They probably just souri were headed to insurance companies or government bureaucra­ bought a new house-or are getting a divorce. A cart loaded up with cies, Pole was on a different track. He'd become obsessed with the bug spray, kids' underwear, a flashlight, lots of batteries, Real Sim­ ways economists were using pattern analysis to explain human be­ ple, and a bottle of Chardonnay? Summer camp is around the comer havior. Pole, in fact, had tried his hand at a few informal experiments and Mom can hardly wait. 1 84 • T H E P 0 WE R 0 F HABIT How Target Knows What You Want Before You Do e 1 85 Working at Target offered Pole a chance to study the most com­ ••• plicated of creatures-the American shopper-in its natural habi­ tat. His job was to build mathematical models that could crawl Once upon a time, a company like Target would never have hired a through data and determine which households contained kids and guy like Andrew Pole. As little as twenty years ago retailers didrit do which were dedicated bachelors; which shoppers loved the outdoors this kind of intensely data-driven analysis. Instead, Target, as well as and who was more interested in ice cream and romance novels. grocery stores, shopping malls, greeting card sellers, clothing retail­ Pole's mandate was to become a mathematical mind reader, deci­ ers, and other firms, tried to peer inside consumers' heads the phering shoppers' habits in order to convince them to spend more. old-fashioned way: by hiring psychologists who peddled vaguely sci­ Then, one afternoon, a few of Pole's colleagues from the market­ entific tactics they claimed could make customers spend more. ing department stopped by his desk. They were trying to figure out Some of those methods are still in use today. If you walk into a which of Target's customers were pregnant based on their buying Walmart, Home Depot, or your local shopping center and look patterns, they said. Pregnant women and new parents, after all, are closely, you'll see retailing tricks that have been around for decades, the holy grail of retail. There is almost no more profitable, product­ each designed to exploit your shopping subconscious. hungry, price-insensitive group in existence. It's not just diapers and Take, for instance, how you buy food. wipes. People with infants are so tired that they'll buy everything Chances are, the first things you see upon entering your grocery they need-juice and toilet paper, socks and magazines-wherever store are fruits and vegetables arranged in attractive, bountiful piles. they purchase their bottles and formula. What's more, if a new par­ If you think about it, positioning produce at the front of a store ent starts shopping at Target, they'll keep coming back for years. doesrit make much sense, because fruits and vegetables bruise easily Figuring out who was pregnant, in other words, could make Tar­ at the bottom of a shopping cart; logically, they should be situated by get millions of dollars. the registers, so they come at the end of a trip. But as marketers and Pole was intrigued. What better challenge for a statistical fortune­ psychologists figured out long ago, ifwe start our shopping sprees by teller than not only getting inside shoppers' minds, but their bed­ loading up on healthy stuff, we're much more likely to buy Doritos, rooms? Oreos, and frozen pizza when we encounter them later on. The burst By the time the project was done, Pole would learn some impor­ of subconscious virtuousness that comes from first buying butternut tant lessons about the dangers of preying on people's most intimate squash makes it easier to put a pint of ice cream in the cart later. habits. He would learn, for example, that hiding what you know is Or take the way most of us turn to the right after entering a store. sometimes as important as knowing it, and that not all women are (Did you know you tum right? It's almost certain you do. There are enthusiastic about a computer program scrutinizing their reproduc­ thousands of hours of videotapes showing shoppers turning right tive plans. once they clear the front doors.) As a result ofthis tendency, retailers Not everyone, it turns out, thinks mathematical mind reading is fill the right side of the store with the most profitable products cool. they're hoping you'll buy right off the bat. Or consider cereal and "I guess outsiders could say this is a little bit like Big Brother," soups: When they're shelved out of alphabetical order and seem­ Pole told me. "That makes some people uncomfortable." ingly at random, our instinct is to linger a bit longer and look at a 186 • THE P 0 WE R 0 F HABIT How Target Knows What You Want Before You Do e 187 wider selection.