How Companies Learn
Your Secrets
[aka: how target knows you’re pregnant before you do]
CHARLES DUHIGG,
February 16, 2012
modified article:
For companies like Target, the exhaustive rendering of our conscious and unconscious
patterns into data sets and algorithms has revolutionized what they know
about us and, therefore, how precisely they can sell.
THE BACKGROUND
SCIENCE:
Basically, habits help us think less:
An M.I.T. neuroscientist named Ann Graybiel told me that she
and her colleagues began exploring habits more than a decade ago by putting
their wired rats into a T-shaped maze with chocolate at one end. The maze was
structured so that each animal was positioned behind a barrier that opened
after a loud click. The first time a rat was placed in the maze, it would
usually wander slowly up and down the center aisle after the barrier slid away,
sniffing in corners and scratching at walls. It appeared to smell the chocolate
but couldn’t figure out how to find it. There was no discernible pattern in the
rat’s meanderings and no indication it was working hard to find the treat.
The probes in the rats’ heads, however, told a different
story. While each animal wandered through the maze, its brain was working
furiously. Every time a rat sniffed the air or scratched a wall, the
neurosensors inside the animal’s head exploded with activity. As the scientists repeated the experiment,
again and again, the rats eventually stopped sniffing corners and making wrong
turns and began to zip through the maze with more and more speed. And within
their brains, something unexpected occurred: as each rat learned how to complete
the maze more quickly, its mental activity decreased. As the path became
more and more automatic — as it became a habit — the rats started thinking less
and less.
This process, in which the brain converts a sequence of
actions into an automatic routine, is called “chunking.” There are dozens, if
not hundreds, of behavioral chunks we rely on every day. Some are simple: you
automatically put toothpaste on your toothbrush before sticking it in your
mouth. Some, like making the kids’ lunch, are a little more complex. Still
others are so complicated that it’s remarkable to realize that a habit could
have emerged at all.
Take backing your car out of the driveway. When you first
learned to drive, that act required a major dose of concentration, […] Now, you
perform that series of actions every time you pull into the street without
thinking very much. Your brain has chunked large parts of it. Left to its own
devices, the brain will try to make almost any repeated behavior into a habit,
because habits allow our minds to conserve effort.
To understand this a little more clearly, consider again the
chocolate-seeking rats. What Graybiel and her colleagues found was that, as the
ability to navigate the maze became habitual, there were two spikes in the rats’ brain activity — once at the beginning of the maze, when
the rat heard the click right before the barrier slid away, and once at the end, when the rat found
the chocolate. Those spikes show when the rats’ brains were fully engaged, and
the dip in neural activity between the spikes showed when the habit took over.
From behind the partition, the rat wasn’t sure what waited on the other side,
until it heard the click, which it had come to associate with the maze. Once it
heard that sound, it knew to use the “maze habit,” and its brain activity
decreased. Then at the end of the routine, when the reward appeared, the brain
shook itself awake again and the chocolate signaled to the rat that this
particular habit was worth remembering, and the neurological pathway was carved
that much deeper.
The process within
our brains that creates habits is a three-step loop. First, there is a cue, a trigger that tells your brain to
go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental
or emotional. Finally, there is a reward,
which helps your brain figure out if this particular loop is worth remembering
for the future. Over time, this loop — cue, routine, reward; cue, routine,
reward —becomes more and more automatic. The cue and reward become
neurologically intertwined until a sense of craving emerges. What’s unique
about cues and rewards, however, is how subtle they can be. Neurological
studies like the ones in Graybiel’s lab have revealed that some cues span just
milliseconds. And rewards can range from the obvious (like the sugar rush that
a morning doughnut habit provides) to the infinitesimal (like the barely
noticeable — but measurable —sense of relief the brain experiences after
successfully navigating the driveway). Most cues and rewards, in fact, happen
so quickly and are so slight that we are hardly aware of them at all. But our
neural systems notice and use them to build automatic behaviors.
Our relationship to e-mail operates on the same
[cue-routine-reward] principle. When a computer chimes or a smartphone vibrates
with a new message, the brain starts anticipating the neurological “pleasure”
(even if we don’t recognize it as such) that clicking on the e-mail and reading
it provides. That expectation, if unsatisfied, can build until you find
yourself moved to distraction by the thought of an e-mail sitting there unread
— even if you know, rationally, it’s most likely not important. On the other
hand, once you remove the cue by disabling the buzzing of your phone or the chiming
of your computer, the craving is never triggered, and you’ll find, over time,
that you’re able to work productively for long stretches without checking your
in-box.
PERSONAL ANALYTICS:
Find the customers who have children and send them catalogs
that feature toys before Christmas. Look for shoppers who habitually purchase
swimsuits in April and send them coupons for sunscreen in July and diet books
in December.
In the 1980s, a team of researchers led by a U.C.L.A.
professor named Alan Andreasen undertook a study of peoples’ most mundane
purchases, like soap, toothpaste, trash bags and toilet paper. They learned
that most shoppers paid almost no attention to how they bought these products,
that the purchases occurred habitually, without any complex decision-making.
Which meant it was hard for marketers, despite their displays and coupons and
product promotions, to persuade shoppers to change.
But when some
customers were going through a major life event, like graduating from
college or getting a new job or moving to a new town, their shopping habits became flexible in ways that were both
predictable and potential gold mines for retailers. The study found that
when someone marries, he or she is more likely to start buying a new type of coffee. When a couple move into a new
house, they’re more apt to purchase a different kind of cereal. When they divorce, there’s an increased chance they’ll
start buying different brands of beer.
Consumers going through major life events often don’t
notice, or care, that their shopping habits have shifted, but retailers notice,
and they care quite a bit. At those unique moments, Andreasen wrote, customers
are “vulnerable to intervention by
marketers.” In other words, a precisely timed advertisement, sent to a
recent divorcee or new homebuyer, can change someone’s shopping patterns for
years.
And among life events, none are more important than the
arrival of a baby. At that moment, new parents’ habits are more flexible than
at almost any other time in their adult lives. If companies can identify
pregnant shoppers, they can earn millions.
…able to identify about 25 products that, when analyzed
together, allowed him to assign each shopper a “pregnancy prediction” score. (like unscented lotion)
One Target employee I spoke to provided a hypothetical
example. Take a fictional Target shopper named Jenny Ward, who is 23, lives in Atlanta and in March
bought cocoa-butter lotion, a purse large enough to double as a diaper bag,
zinc and magnesium supplements and a bright blue rug. There’s, say, an 87 percent chance that she’s pregnant and
that her delivery date is sometime in late August. What’s more, because of
the data attached to her Guest ID number, Target knows how to trigger Jenny’s
habits. They know that if she receives a coupon via e-mail, it will most likely
cue her to buy online. They know that if she receives an ad in the mail on
Friday, she frequently uses it on a weekend trip to the store. And they know
that if they reward her with a printed receipt that entitles her to a free cup
of Starbucks coffee, she’ll use it when she comes back again.
About a year after Pole created his pregnancy-prediction
model, a man walked into a Target outside Minneapolis
and demanded to see the manager. He was clutching coupons that had been sent to
his daughter, and he was angry, according to an employee who participated in
the conversation.
Using data to predict a woman’s pregnancy, Target realized
soon after Pole perfected his model, could be a public-relations disaster. So
the question became: how could they get their advertisements into expectant
mothers’ hands without making it appear they were spying on them? How do you
take advantage of someone’s habits without letting them know you’re studying
their lives?
“We have the capacity to send every customer an ad booklet, specifically designed for them, that says, ‘Here’s everything you bought last week and a coupon for it,’ ” one Target executive told me. “We do that for grocery products all the time.” But for pregnant women, Target’s goal was selling them baby items they didn’t even know they needed yet.
“With the pregnancy products, though, we learned that some
women react badly,” the executive said. “Then we started mixing in all these
ads for things we knew pregnant women would never buy, so the baby ads looked
random. We’d put an ad for a lawn mower next to diapers. We’d put a coupon for
wineglasses next to infant clothes. That way, it looked like all the products
were chosen by chance.
“And as long as we don't spooky her, it works."
As Pole told me the last time we spoke: “Just wait. We’ll be sending you coupons for things you want before you
even know you want them.”
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