Irrational rationalization in marketing

A few weeks old, but I finally read the article that features Target's ability to tell a customer is a pregnant woman just by what she buys.

I was surprised to discover that half of the article was actually about the "science of habit formation," which amounts to a kind of gussied up behavioralism in which the usual schema of stimulus-response is expanded to "cue, routine, reward." As is the wont of gee-whiz science journalism, the author seems to have an inflated view of the insightfulness of this formula. Take this passage:

“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 we found out that as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don’t spook her, it works.”

In other words, if Target piggybacked on existing habits — the same cues and rewards they already knew got customers to buy cleaning supplies or socks — then they could insert a new routine: buying baby products, as well. There’s a cue (“Oh, a coupon for something I need!”) a routine (“Buy! Buy! Buy!”) and a reward (“I can take that off my list”). And once the shopper is inside the store, Target will hit her with cues and rewards to entice her to purchase everything she normally buys somewhere else. As long as Target camouflaged how much it knew, as long as the habit felt familiar, the new behavior took hold.

What's remarkable here is that the "in other words" of the final paragraph doesn't clarify what's being expressed in the quotes from the previous two, but instead makes it needlessly more complicated. The Target executive is talking, quite straightforwardly about the targeted customers getting offended about the idea that the company was deducing that they were pregnant from their purchasing behavior. It has nothing to do with whether "the habit felt familiar" or not, and nothing to do with cues, routines, or rewards. Instead, it's about the customers' sense of privacy, and as long as Target avoided making customers feel like that had been violated, it could nudge buying behavior. In fact, I'm pretty sure I saw this same passage quoted elsewhere, to make the point about privacy, completely annoying the extraneous stuff about habits.

Anyways, on to the non-silly parts of the article. I suppose there's a lot that could be said about the "technology" of marketing and statistical analysis used by Target and Procter & Gamble, and about the manipulation of individuals' behavior through it. Were I better socialized in the norms of my academic discipline, I probably would write about that. But instead, what I take away from this is the utter irrationality, in a typically capitalist fashion, of what these companies are described as doing. Leaving aside the utterly classic "manufacture of wants" by P&G, Target's data analysis is a truly astonishing example of immense effort and technical sophistication going into an activity that has a social utility of exactly zero. Target's marketers try to find out when its customers are moving or having a child in order to get them to shop at Target as opposed to somewhere else. They wouldn't have had any trouble getting the product elsewhere, if the Target coupon hadn't conveniently arrive when it did, and though they might save a bit of money on the product in question, the whole premise of the operation is that that will be outweighed by the non-discounted products they'll buy at Target when they're there just because it's more convenient. On the whole, competition in capitalism is the engine that produces ongoing economic growth: in order to offer a product slightly cheaper than the competition, and thus expand market share, a firm improves its productivity, and when competitors match the leader's improved productivity, the price charged to consumers falls accordingly, freeing up money that can be used for other goods and services, and thus marginally expanding the material wealth of society. However, the production or distribution of goods is not a whit more efficient because Target has managed to statistically pinpoint its marketing; the only benefit goes to Target at the expense of other retailers. And don't even get me started on how this puts the lie to the idea that the price system is what transmits information about supply and demand: both the P&G and Target cases in the story show clearly that far from passively observing the information in prices, capitalist firms routinely go out and actively investigate (not to mention try to manipulate) what consumers will buy.