“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.”
– Andrew Pole, Statistician at Target Retail Chain
For decades, retail chain Target has collected vast amounts of data on every person who regularly walks into one of its stores. Target usually assigns each shopper a unique code — known internally as the Guest ID number — that keeps tabs on everything they buy, in addition to this whenever customer uses a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an e-mail sent by Target or visit their website, Target records it and links it to guest ID.
This vast data when subjected to predictive analytics becomes a goldmine for retail store. For this they hired a statistician called Andrew Pole.
One of the tasks he was given was to keep track of pregnant shopper. If you can predict pregnancy earlier then you can target the customer with different products depending on what stage of pregnancy she is in. So predicting pregnancy cycle and child birth can drastically improve your sales.
Andrew Pole started analysing the data and he was able to identify about 25 products that, when analysed together, allowed him to assign each shopper a “pregnancy prediction” score. More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy. For example a customer, who is in her early twenties, in month of March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements and a bright blue rug. Then there is 87 % chance that she’s pregnant and that her delivery date is sometime in late August.
About a year after Pole created his pregnancy-prediction model, an angry man walked into a Target store and demanded to see the manager. He was clutching coupons that had been sent to his daughter.
“My daughter got this in the mail!” he said. “She’s still in high school, and you’re sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?”
The manager didn’t have any idea what the man was talking about. The manager looked at the mailer, it was addressed to the man’s daughter and contained advertisements for maternity clothing, nursery furniture and pictures of smiling infants. The manager apologized and then called a few days later to apologize again. To his surprise the father did not sound angry at all; in fact he started apologising to manager. He had talked to his daughter after his visit to Target store and to his surprise she was indeed pregnant!