Having lived on the cusp of the digital era - and by that I mean that I first started playing the Oregon Trail on a big beige Apple desktop computer when I was in 6th grade - I often struggle with the amount of data I am giving out about myself. As a marketer, I can appreciate the quest for companies to learn about me. However, as the consumer I don't feel quite right giving away all my secrets.
I find the topic of data analytics fascinating, and I certainly expect to use this type of information in my future career. Some of the most interesting points of his article - which are a precurser to his book out February 28th called "The Power of Habit: Why We Do What We Do in Life and Business" - include:
Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a “predictive analytics” department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them.
Chunking: that the brain converts a sequence of actions into an automatic routine, which thus decreases brain activity, and thus we think less and less. (Even if it looks like we are thinking more!)
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.
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.
I love the idea of the cue-routine-reward calculator from a marketer's perspective, but it is also scary how susceptible to marketing I (and we) are! Duhigg goes on to talk about Target's targeted coupon circulars, sent to pregnant women but disguised as a normal ad. People were started to get spooked - understandably - so Target had to pull back and disguise how intelligent they were with their data.
In a time where we give up information so willingly, and usually without thinking, it is without doubt that corporations know way more about us than we would ever willingly tell them - if we had thought about it. As much a people are afraid about Google knowing what they are searching for, or Facebook knowing what they are doing - they have been providing similar information to retailers, credit card companies, banks, etc. for years. I believe it will be a fascinating study to see what other interesting trends in data analytics are surfacing.
Perhaps I can even do a report on Duhigg's book as well, although the gist of it seems to be more about how people form habits, and how marketers use these habits to better reach consumers. I find it all fascinating!
Looking forward to your thoughts, Professor Walls!
Hi Erin - I think this is a super-interesting topic. I was hoping you would conclude with exactly what you thought you might write about, but it looks like you are looking for my thoughts on this. Hmmm... I don't want to sway you too much because I want you to be sure you are choosing something that you are particularly interested in researching and writing about. Here are some of my immediate thoughts, some of which could possible be combined. Just know that I am doing this off the cuff and it may be better for us to sit down in-person to refine some of this.
ReplyDelete1. Where do data analytic uses seem to be having the most impact (e.g., routine decisions, life changes, etc.)?
2. Where do data analytic uses seem to be having the least impact and why?
3. Given that we are talking about analyzing people, isn't there always an element of unpredictability and does that matter? Maybe not when it is just one anomaly, but how about when it's a whole culture that shifts quite suddenly (e.g. a deep and prolonged recession that is a bit unprecedented)?
4. How far can all of this predictive stuff go and, once we are used to it, will we still be as manipulated by it?
5. Will this give bigger firms an even bigger advantage in the marketplace or is there a way for smaller firms, who can't afford the software or reports, to still compete and win?
Let me know if you want to get together to chat more.