Analytics Stories

CHAPTER 28How Does Target Know If You're Pregnant?

My beautiful wife Vivian, loves Target. She goes at least once a week and spends over $5,000 a year at Target. She knows where everything is, goes early in the morning when the store is not crowded, and every other week she comes home with a very cute outfit. I am sure Target has a reasonable estimate of Vivian's customer lifetime value (CLV). (For more discussion of CLV, which is the value in today's dollars of the profit Vivian generates, see Chapter 19 of Marketing Analytics, Winston, 2014, Wiley.) Target knows that once a shopper like Vivian chooses Target over competitors like Walmart, Costco, or Kohls, Target probably has them as a loyal customer for a long, long time. Enticing customers to choose Target as their go-to store is crucial to growing Target's bottom line.

An opportune time to make someone a loyal customer is during a woman's (especially first) pregnancy. If Target convinces the woman that Target is on target for them, then the customer will generate profits for many years based on purchases for her growing family. A 2012 New York Times article (see www.nytimes.com/2012/02/19/magazine/shopping-habits.html?mtrref=www.google.com&gwh=1DADCD60FE8964BBA7D4ACAE5977C697&gwt=pay&assetType=REGIWALL) by Charles Duhigg, author of the bestseller The Power of Habit (Random House, 2012), describes the methods used by Target to identify women who were likely in the second trimester of their pregnancies. In this chapter, ...