What’s the best way to target our consumers? The profitable answer to this question is the spark that ignites every major retailer to use predictive analytics: the science of predicting consumers’ habits. The research of this has been transforming how organizations’ attract its consumers and keep them coming back.
The degree to which retailers know about us is alarming. To provide a better sense, let’s take a look at Target. Target is arguably one of the best stores at using predictive analytics. The company has recognized that consumers make purchase decisions based on quantifiable habits. These habits may be hard to break, yet, this major retailer has discovered a time in people’s lives when consumers’ habits waiver and their shopping patterns are most easily influenced: when a baby is on the way. “We knew that if we could identify [pregnant women] in their second trimester, there’s a good chance we could capture them for years,” Said Andrew Pole, one of Target’s statisticians. And it worked. Between 2002 — when Pole was hired — and 2010, Target’s revenues grew from $44 billion to $67 billion according to a 2012 New York Times article. Now I’ve probably got you wondering if that coupon that Target sent you about dorm ideas before university, or party ideas before your birthday was no coincidence, and you’re right, it wasn’t. With this revolutionary expertise, companies may even begin to know more about what you want than you do.