Week 5 learnings

My readings/viewings this week focused on the concept of big data and methods of using data to target the right customers and improve profitability.  This week, I read "Shopping and Social Media: The Retailer's Guide to Big Data," "Advertisers Get a Trove of Clues in Smartphones," the introduction to The Numerati," and "The world's most valuable brands. Who's most engaged?"  I also watched "The History of the Internet" and the Kimberly Clark lecture.  It's amazing to think about the amount of data available (estimated at 7.9 zettabytes by 2015 or the equivalent of 18 Libraries of Congress) and the speed at which internet marketing techniques are evolving.

A few relevant big data examples from my daily life are below:

1) There was an article about a year ago in Forbes titled "How Target Figured Out a Teen Girl Was Pregnant Before Her Father Did" that explained Target's use of big data to predict when a female was pregnant and learnings they had along the way of incorporating big data into their marketing strategy.  The success is that they could accurately predict a woman's pregnancy based purchases, even down to the month of her expected arrival.  This enables them to gain customer loyalty by sending relevant coupons/advertisements at just the right time.  By gaining loyalty early in the pregnancy, Target positions itself to be the destination for many large upcoming purchases -- cribs, strollers, diapers, baby food, and eventually, playground equipment, party supplies, toys, games, and more.  The learning they had regarding big data was that customers do not appreciate being spied on!  Target changed its marketing strategy from sending fliers entirely about baby products to unsuspecting consumers to sending fliers containing baby products along with ordinary items (e.g. lawn mowers).  This enabled them to reach the consumer at the right time, but in a more subtle manner.

Well... I recently received a flyer in the mail!  The instructional pamphlet was all about the proper form of diapering babies (designed for new parents) and registry-building tips, along with coupons for Pampers baby products.  The inside stated "Welcome to motherhood!  Congratulations!  We're so excited for your little miracle that's on his or her way, so we've collected our favorite tips and coupons to help you plan for the big day."  I am DEFINITELY not pregnant, but the situation is humorous and makes me think about what products I've been purchasing recently and from whom Pampers is purchasing/compiling their "big data."  :-)  



2) As mentioned in a previous post, at my employer, we are working to segment our e-mail campaigns even further than before -- to the tune of thousands of versions per day based on previous customer shopping/browsing behavior.

Similarly, we are now working on a project of using big data to segment the catalogs that we mail to households.  There are specific product categories that have polarizing appeal to audiences.  Catalogs are created in 8-page segments and stitched/glued together at the production factory.  In theory, our business model would be most effective if we could target the right product to the right consumer, rather than sending out a consistent 112-page catalog to the entire file.  Like the discussion last week around Warby Parker, where brick-and-mortar locations are now trying to model the online experience, we are doing the same thing with segmentation.  How can we get the same efficiency achieved through digital media in our traditional catalog channel??!