It’s an old case and I’m not sure if you have heard about it, but I think it is still a nice story to share.
In the early 2000s, a US-based retailer, Target sent out a bunch of deals to pregnancy-related products. One of the coupons went to a 17 years old girl who was still in high school.
And you could have imagined how her father reacted. He is mad! So mad that he stormed into the local Target store, calling out the store manager, who initially didn’t have any idea what the father was mad about. The manager later realized it after looking at the mailer.
He later apologized to the father and called him again after a few days to apologize for the second time.
No, I’m not talking about how good the manager reacted to an unhappy man nor how nice Target’s customer service.
But here’s the interesting reply the manager got on the phone from the father.
“I had a talk with my daughter. It turns out there have been some activities in my house I haven’t been completely aware of. She’s due in August. I owe you an apology,” the father said.
So how could Target figure out the girl was pregnant even before her father did?
Target was running a set of data analysis that in result able to predict whether a woman was pregnant or not. So, you can see that the coupon was sent for a valid reason.
The people at Target analyzed purchase history of its customers. They found out that pregnant women bought certain types of products. Some of them are cotton balls, food supplements and lotions.
By evaluating this data, together with other demographics and contextual data, Target was able to build an accurate prediction to create a good marketing tactic. It is so good that it could increase its revenue from $44 billion to $67 billion in eight years.