Scanner Panel Data

There's a bit of an uproar lately over Target's use of scanner panel data to analyze customer purchases to determine changes in customer lifestyle: in this instance, they found that one shopper was purchasing items that are commonly purchased by women who are pregnant and sent her a mailer advertising maternity clothing.

It turns out their analysis was accurate: the customer actually was pregnant. It also turns out that the customer was a teenaged girl, and her father was unaware of her condition - so what happened was that the father first went to the store and threw a tantrum about Target sending am inappropriate advert to his daughter, then apologizing a few days later when she admitted her condition to him and he realized the advertisement was entirely appropriate.

The public reaction to the incident (or at least the reaction the media seems to want to provoke in the public) is fear and outrage that companies are invading the most private aspects of our lives, but this strikes me as melodramatic and wrong-headed. Which is to say, it strikes me as being typical of the media.

It shouldn't be shocking news to anyone that stores that issue discount cards are collecting scanner panel data and compiling databases of what customers purchase. They've been doing so for well over a decade. Perhaps it should be shocking news that companies are actually doing something with the information rather than ritually collecting data simply because they can, and even more so that one company, for one customer, actually made an accurate an intelligent prediction.

In regards to privacy concerns, purchases at a store are not private, though they do disclose much about our private lives. I don't think you have grounds to feel invaded when the clerk at the grocery store knows what you're having for dinner out when you show up on a Saturday afternoon and purchase two steaks and a sack of charcoal. Perhaps it' a little less comfortable when he figures out your religion based on the fact that he's been at the register the past five Fridays when you bought fish, but it's still not an amazing incident ... except that a clerk would have the capacity to recognize a single customer and notice a pattern of behavior, given that they deal with hundreds of people every day.

I tend to be impressed, rather than shocked, when this sort of thing happens. To my way of thinking, paying attention to your customers and learning their preferences is a characteristic of good customer service - and being able to make good suggestions based on what you discover takes service to the next level. Such things should happen more often than they presently do, especially given computer technology that enables retailers have a virtually flawless memory of what each customer purchases and perform more accurate and astute analyses of their purchasing history.

Granted, the incident with Target and the pregnant teenager caused some embarrassment, but the company shouldn't be embarrassed about paying attention to customers and trying to provide better service - rather the father should be embarrassed for being less attentive to his daughter's behavior than the store where she sometimes shops has been.