Target is an
international discount department store retailer that now has 1,797
brick-and-mortar stores spread across the United States, an additional 124
stores in Canada, as well as locations in the growing market of India
(Corporate Fact Sheet, 2013). Additionally, the company has thirty-seven
distribution centers, 361,000 team members around the world, and of course its
online ecommerce site, target.com (Corporate Fact Sheet, 2013).
Since the first
store opened in Rossville, Minnesota in 1962, Target has grown to become one of
the top retailers in the United States.
The brand has made a pretty good name for itself over the years by
providing high quality merchandise at discounted prices, which has attracted a
customer base consisting mostly of middle-class families with an annual
household income of roughly $64k (Corporate Fact Sheet, 2013).
With technology
continuing to develop at a rapid rate in the U.S., shopping online has become
less frightening than when it was first introduced to the consumer market. The popularity of online shopping has given
rise to numerous online-only retailers such as Amazon.com and has also led to
the vast majority of brick-and-mortar retailers expanding their brands via an
ecommerce site. But even with all of the
competition, especially is the department store industry, Target has managed to
become the second largest general merchandise retailer in the United States,
with its ecommerce site, target.com, being ranked as one of the most visited
websites (Corporate Fact Sheet, 2013).
Target launched
its first online website in 1999 and partnered with Amazon to help perfect the
customer shopping experience online.
But, in 2009, Target decided to end its decade long relationship with
Amazon, despite the fact that Amazon had spent years developing technology to
help perfect the online customer experience (Zmuba & Patel, 2011). Because the company was growing at such a
substantial rate, Target decided it would be best for it to develop its own
ecommerce technology and create and manage its own website (Zmuba & Patel,
2011).
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| First Target Website |
So, instead of
using Google Analytics or other Analytics tools as a primary way to track its
web analytics, Target decided to do things a little differently and develop its
own website and tracking systems. To
help Target in its endeavor to gain control for the first time over its online
website and sales, the company recruited help from more than 20 vendors, which
included IBM, Endeca, Infosys, and appointed SapientNitro as its partner and
lead integrator (Zmuba & Patel, 2011).
At the beginning
of this new venture, things didn’t seem to go exactly as Target might of
hoped. According to the AdAge article
published shortly after the redesigned target.com was launched, Target's Site Plagued by Glitches, Friction Between Marketing
and Tech Teams,
the company faced a long list of problems only six weeks after the site launch
which included broken links, missing registries, and shopping carts that seemed
to be doing more of the shopping than the actual customers.
Although the company may not
have been up to speed on how to create a website and use analytics in a timely
fashion to gain a better understanding of where on the site customers were having
the most problems, Target was already ahead of the game when it came to
tracking customers data online. Target
statistician, Andrew Pole had already developed a system for how Target would
collect customers (or “guests” as Target refers to them as) information in order
to effectively market to them efficiently as possible.
According to a blog post from
Avinash Kaushik, the diagram created and presented by Pole at a predictive
analytics conference showed “the variables in play that Target collects (across
online and offline touch points, mobile and desktop) and ties to the Guest ID
(you) in order to do better marketing.”
Below is Pole’s diagram titled Bringing
It All Together: Guest ID:
As you can see, this model has various paths that data can
take in order to link a user to their unique Guest ID.
If you ask me, that’s a pretty
incredible amount of data Target is able to collect about each customer and
store it under each customers own Guest ID.
This model allows the company to analyze every point of interaction the
brand has with every customer and combining customer behaviors both online and
offline to determine the best way to market to them. Back in 2010, Pole also stated, “that Target was able to associate half of
its in-store sales, nearly all of its online sales and about a quarter of all online
cookies with specific Guest IDs” (Hill, 2012).
In his presentation at the
predictive analytics conference, Pole explained the personal information Target
would collect for each customer in order to associate them with his or her
Guest ID. “It starts with name, address and tender
(the credit card or debit card you use) and expands from there to a history of
your store purchases, online purchases, mobile phone ID, actions taken in
response to Target emails, and Internet browsing activity if you click on a
link in one of those emails” (Hill, 2012).
Additionally, according to Hill (2012), Target uses its combined
analytics system and location data to steer customers living near a competitor
to shop at target.com instead.
Target also has a potential value model
that allows the company to determine how much each customer could potentially
spend. Also in his conference
presentation Pole explains, “With data mined from past years’ spending and
demographic databases — showing whether Antonia’s married, whether she has
children, what her job is, the average income for her neighborhood — ‘we think
she should be spending $5000’” (Hill, 2012).
So, if Antonia’s data reveals she was only spending $1,000 a year,
Target will continue marketing towards her.
However, if a customer is spending $1,000 a year and the data leads
Target to believe that is all he or she can spend based on discretionary
income, then Target will stop marketing towards that customer in order to save
the company money (Hill, 2012).
Target also uses customer data both online
and offline to determine the coupon value they will offer to each
customer. If the data for a specific
customer from both online and in-store coupon redemptions reveals that a $1
coupon is enough to get that person to make a purchase, then the company will
likely continue offering coupons for that amount. Target personalizes customer
coupons so the value is equal to the amount that the data predicts will push
them to make a purchase.
In its current Privacy Policy, Target
states that the company may automatically connect information they already have
about you in order to identify your Guest ID.
Below is the Automated Information Collection section of the Privacy
Policy:
Automated Information Collection
We may connect information collected automatically with
information we already have about you in order to identify you as a Target
guest. If we are able to identify you as a Target guest we may, for example,
link your activity on our website to your activity in a Target store. This
allows us to provide you with a personalized experience regardless of how you
interact with us – online, in store, mobile, etc.
Automated Information Collection
We and our service providers use cookies, web beacons,
and other technologies to receive and store certain types of information
whenever you interact with us through your computer or mobile device. This
information, which includes the pages you visit on our site, which web address
you came from, the type of browser/device/hardware you are using, purchase
information and checkout process, search terms and IP-based geographic
location, helps us recognize you, customize your website experience and make
our marketing messages more relevant. This includes Target content presented on
another website or mobile application, for example, Target Weekly Ad. These
technologies also enable us to provide features such as storage of items in
your cart between visits and Short Message Service (SMS)/text messages you have
chosen to recieve. We also use Flash cookies for fraud prevention purposes.
In order to provide the best guest experience possible,
we also use these technologies for reporting and analysis purposes, such as how
you are shopping our website, performance of our marketing efforts, and your
response to those marketing efforts.
Overall, Target has developed and
implemented a sophisticated methods and technologies to track customers
behaviors both online and offline to determine the most efficient and effective
marketing efforts. In terms of creating
a better experience online for customers (and that I’m sure Target is already
doing) A/B testing could be used to help with effective site design. I would also suggest using a heat mapping
tool because from my own personal experiences I think the homepage can become a
little cluttered, especially during the holidays, making it harder to navigate.
References:
Hill, K. (2012, February 24). Target
isn't just predicting pregnancies: 'expect more' savvy data-mining tricks.
Retrieved from
http://www.forbes.com/sites/kashmirhill/2012/02/24/target-isnt-just-predicting-pregnancies-expect-more-savvy-data-mining-tricks/
Kaushik, A. (2012, April 12). Retrieved
from https://plus.google.com/ avinash/posts/f5K1ueN9Tk1
Target. (2013). Corporate fact sheet.
Retrieved from http://pressroom.target.com/corporate
Target. (2013). Privacy policy. Retrieved from http://www.target.com/spot/privacy-policy
Zmuda. , & Patel (2011, October 06). Target's
site plagued by glitches, friction between marketing and tech teams.
Retrieved from http://adage.com/article/news/target-faces-hurdles-site/230188/






