Your Purchases Tell a Story: How Brands Use Your Buying Habits for Targeted Marketing (Infographic)

Did you know that major brands profile you based on what you buy? Retailers like Target and Domino’s Pizza gather and store this data via barcode technology, and they use it to determine everything from how best to market to you, which coupons you’re most likely to use based on your life stage, and what you might buy based on previous purchasing habits. Yes, they get all this from scanning a barcode! It’s what’s known as predictive technology, and major retailers use it to create database-driven consumer profiles to not only boost sales, but also to create more personalized buying experiences.
We decided to take a closer look at predictive technology and its role in consumer profiling. We did some digging and put together this infographic called, “You are Not Special, but Your Purchases are.”
If you like it, we encourage you to share it with others on social media. You also can add the infographic on your website using the HTML code below. We ask only that you credit us, Camcode the leader asset labels solutions, as the source.

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Full Infographic Text Transcription:

YOU ARE NOT SPECIAL BUT YOUR PURCHASES ARE

2 side by side receipts:
Receipt 1 (This is a new mom – don’t show it)

• Store: Target
• Location: 90210, Beverly Hills, CA
• Date / Time: Wed. 10:28am
• Save Card ID#: 48576392
• Items purchased / price / sale price
  • o Baby Crib 3000 (maybe add used a coupon – mail in / 20% off)
    • § (1), price
  • o 20 pack Infant diapers age 1-3 month (pregnant)
    • § (4), price, BIG SAVINGS
  • o 20 pack Big Boy Now pull-up diapers (has a small child)
    • § (3), price
  • o Yoga pants Size 2 (wants to lose that baby fat)
    • § (1), price
  • o HDdvd Player
    • § (1), price, Redeemed 20% off mail in Sale
  • o Runner’s Magazine
    • § (1), price
• Redeemed 20% off any 1 item Mail in offer [cribb]
• Total SAVINGS! :
• Total
• Payment method: Husband’s Visa
• “Thank you for shopping!”

Receipt 2 (New College Student – don’t show)

• Store: Target
• Location: 40207 Louisville, KY
• Date / Time: Sat. 8:59 pm
• Save Card ID#: 927846787
• Items purchased / price / sale price
  • o Shower Caddy color: blue
    • § (1), price,
  • o Mini Fridge
    • § (1), price
  • o Picture Frame: GRADUATION!
    • § (1), price
  • o Sheet set size Twin. color: Red
    • § (1), price
  • o SuperStation gaming Controller
    • § (1), price, Redeemed 20% off Text Message Sale
  • o a lot of junk food
• New Value Card Member! 10% discount
• Total SAVINGS! :
• Total
• Payment method: Mom’s Master Card
• Cashback: $40.00
• “Thank you for shopping!”

Visualized pregnant mom and Gawky College, what they have and what they “need”
(Above, this is how the corporation sees your receipt.)
Visualization through a retailer marketers’ eyes
Estimates Guest Profile: Receipt 1

• Expectant Mother [Crib = ~90 days to birth (Source: target example)]
• Kids: 1 & ⅔
  • o Boy: ~2 years [Big boy pull ups]
• Hobbies: Yoga, Running [yoga pants, magazine]
• Occupation: Stay at home mother [Weds 10:28 am]
• Avg. Household income for zip: 90210: $700,000
• Responds to: Mail Offers
• (Corp says) Does not need: [visually: greyed out yoga pants, crib and HDdvd player]
• ‘Needs’ Categories:
  • o Health Conscious / Post pregnancy
    • § Athletic clothing, Exercise Equipment, Health food, new clothes
    • § Potential big purchases: Treadmill,
  • o Will need – energy / ie; coffee / vitamins, etc.
  • o New Baby
    • § Baby Formula, Infant Clothes, Infant equipment,
      • potential big purchases: Stroller, Diaper Genie
  • o 2 year old boy
    • § Potty training gear, toys,
  • o Electronics
    • § HD dvd movies, HDTV, Entertainment Center, Surround Sound.
• Save Card ID#: 48576392 monthly spending: $874.59 (Monthly potential: $1,350)

Estimates Guest Profile: Receipt 2

• New College Student [Shower Caddy, Mini Fridge, Graduation Picture frame]
• Hobbies: Video Games
• Occupation: Student
• Avg. Household income for zip: 40207: $70,000
• Responds to: Text Offers
• Does not need: [visually: Mini Fridge and SuperStation]
• ‘Needs’ Categories:
  • o Dorm Room
    • § Bedding, Futon, TV, Microwave,
    • § Potential big purchases:
  • o School Supplies
    • § Bookbag, folders, Highlighters,
    • § potential big purchases: Laptop, Calculator
  • o Video Gamer
    • § Games, Controllers, DVDs, 50 ft. Ethernet cable
    • § Potential big purchases: surround sound, new game system
• Save Card ID#: 927846787 monthly spending: $251.32 (Monthly potential: $350.00)

Retail Brand Individual Marketing Strategy:

• Segment consumers into demographic categories:
  • o Visual: icons of new mother, College Student, Newly Weds, Income brackets, location etc.
• Establish individual needs
  • o Based off of past purchases (barcodes)
  • o Have vs Have nots
  • o Complementary items
• Establish Response to Incentive Vehicles
  • o Visual icons: email, text, in store apps, POS coupons, Mail, Banner ads, social coupons.

Win/win
Consumer:

• Consumers received $4.6 billion in coupon savings in 2011
• 78.6% of Consumers reported using coupons regularly
• More than one-third reported using more coupons than the prior year
• “It’s a little bit creepy, but I figure they’re checking everything anyway,” she said. “I might as well get a good deal out of it.”

Retail Brands Using targeting practices:

• +33% revenue growth aka 12x normal profit growth
  • o McKinsey Global Institute projected 60% revenue growth if potential is maximized

 

• 10% increase in data accessibility would mean an additional $1.2 billion annual sales for the retail industry

Is customer tracking/targeting Creepy?
Note: this is a 2005 study, but was referrenced in a NYTimes article from Aug. 2012. I assume it’s the most recent valid source.

• “The pricing at grocery stores and other retailers is not transparent enough to give consumers any real power or choice.” -Joseph Turow, a Communications professor University of Pennsylvania
• 71% did not know it is legal for “an offline store to charge different people different prices at the same time of day.”
• 64% do not know that a supermarket is allowed to sell other companies information about what they buy.
• 76% agree that “it would bother me to learn that other people pay less than I do for the same products.”
• 64% agree that “it would bother me to learn that other people get better discount coupons than I do for the same products.”
• 66% disagree that “it’s OK with me if the supermarket I shop at keeps detailed records of my buying behavior.”
• 72% disagree that “if a store I shop at frequently charges me lower prices than it charges other people because it wants to keep me as a custmer more than it wants to keep them, that’s OK.”
• [source] http://repository.upenn.edu/cgi/viewcontent.cgi?article=1035&context=asc_papers

Targeting Case Studies-
Call out: “Catalina studied purchase data from 54 million Americans over a year, and found that a significant portion of the sales of individual products came from a small percentage of shoppers.” -New York Times

• [Dominos Pizza Logo]
  • o Tracked Pizza purchases based on weather
  • o Discovered: more pizza is ordered when it’s raining.
  • o Result: Dominos bases ad campaigns around local weather patterns.
• [Target Logo]
  • o Target tracked purchases such as prenatal vitamins that indicate pregnancy
  • o “We knew that if we could identify [pregnant women] in their second trimester, there’s a good chance we could capture them for years,” -Andrew Pole, Statistician for Target
  • o Provided expecting mothers with coupons for baby supplies.
  • o Result:
    • § Result 1: Target Identified 30% more guests to contact with profitable acquisition mailer
    • § Result 2: significantly increase coupon redemption and guest conversion.

 

• [Kroger Logo]
• Kroger tracked “elasticity at a household level,” -Stuart Aitken, the chief executive of dunnhumbyUSA
• Kroger mails customers customized coupon sheets specifically for a household
  • o Result 1: 70% of customers who received the coupon mailings redeemed at least one of the offers
  • o Result 2: 34 consecutive quarters of same-store sales growth, attributed mostly to the coupon offers.
  • o Result 3: Now testing personalized prices via “other devices” like smartphone apps or loyalty card swipes.

 

• Anonymous Major Retailer
• tracked which sale lingo was more effective: “30% off” or “Buy 1 Get 1 Free”
• Discovery: certain demographics prefer different sale lingo.
• Result: Saved $3.2 million by appropriately adjusting sale lingo per location.