How Companies Learn Your Secrets

Description:  “If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that? ”

Source: nytimes.com

Date: Feb 16, 2012

the-incredible-story-of-how-target-exposed-a-teen-girls-pregnancy

As the marketers explained to Pole — and as Pole later explained to me, back when we were still speaking and before Target told him to stop — new parents are a retailer’s holy grail. Most shoppers don’t buy everything they need at one store. Instead, they buy groceries at the grocery store and toys at the toy store, and they visit Target only when they need certain items they associate with Target — cleaning supplies, say, or new socks or a six-month supply of toilet paper. But Target sells everything from milk to stuffed animals to lawn furniture to electronics, so one of the company’s primary goals is convincing customers that the only store they need is Target. But it’s a tough message to get across, even with the most ingenious ad campaigns, because once consumers’ shopping habits are ingrained, it’s incredibly difficult to change them.  READ REST OF STORY 

 Questions for discussion:

1.  Are there any ethical dilemmas to using big data in consumer services?

2.  What other commercial applications can you see for organizations in using big data?

3. What skill would you need to be able to use Big Data in an organization that you work for?

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23 thoughts on “How Companies Learn Your Secrets

  1. Liz Martin

    Although the use of big data is amazing for creating successful marketing techniques and increasing sales, I definitely think companies who use it could run into some ethical issues. I think they are very wise to disperse the items they have determined people need with random ones; as with the baby products. If they didn’t do this, surely the customers would wonder where and how the store collected such accurate data on their buying demands. And if the customer suspects the store to be spying on their habits and lifestyle, they may lose them as customers. It bothers me that big companies like Target try to lure people into buying more stuff that they often don’t need, and with money they don’t have to spend. I get e-flyers from many stores in Lethbridge; M&M Meats, Safeway, Ten Thousand Villages, and although these companies probably don’t have as extensive a data analysis program (or one at all) as Target, I feel like the flyers are more annoying than useful. It really bothers me actually when I walk into stores like Walmart and impulsively buy $40 more stuff that I thought I needed. My method to avoid this is putting impulse-buy items back on the shelf half way through the store, because usually by the time I get to the check-out I’ve forgotten about the item, and am happy that I didn’t waste money on it. I think that barraging customers with flyers takes an unfair advantage of our human behavior, and doesn’t make the line between want-items and need-items any clearer for consumers.

    Reply
  2. Yaqian Diao

    Yes, there are some ethical dilemmas to using big data in consumer services. Nowadays, the companies collect data, get information and apply what they think the customers might need. However, sometimes it happens without customers’ permission. It is legal, but not ethical, because the address, phone number and other individual information is private. People care about their privacy more than before, and they don’t want too many people to know it. It is because sometimes, there will be some unnecessary troubles. On the other hand, there are lots of stores in the marketplace or online. In my point of view, I will never buy everything in one store. I will compare the species, price and quality among the stores, and find the best one. Thus, if a company applys something they think I need, but actually they shouldn’t know it, I will feel unhappy, and even avoid the company in the future.

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  3. Songxuan Wu

    I think there is an ethical dilemma to using big data in consumer services. I often meet this ethical dilemma in my online shopping, and I do not like this service. Especially, when my friend borrow my computer and use the website, they will see the advertisement which is relative my type and shopping record. However, some strange things also came to me, the advertisement continually suggests me to click the products links, and call me with the news about the brand that I have searched recently in Google.
    A growing number of companies are using a big data to get more useful information from customers and analysis their behavior and our habits. I think this operation is very disgusting because customers are not experimental subject and their information should protect. For example, when people register a new website, the website will require the user to fill out a series of information such as the true name, the birthday, and the address. Some websites will offer for sale these users’ information to the advertisement company, and the use would receive a lot of new production’s mails and phone. I think user who should to protect information correctly when their prepare to register new website.

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  4. Ahmed Awad

    For a company to the process of collecting data or Big data could be considered very simple by using any kind of loyalty programs. For example, Safeway uses their club card to know where their customers live and how much they do spend and its opposite from what everyone thinks “it for saving”. It would become very harsh topic to say if this is ethical or not. The main purpose for any organization is to be profitable. However when it comes to company to use data is different story. Personally it thinks it’s very wise for a company to use big data to improve their business but I think there should be a line drawn to differentiate privacy and data. It’s essential for a company to know how to extract the right information. Also by knowing how to extract info is very important and very vital. I think that for an organization to collect whatever data they want however without interfering with any ones privacy. For example, knowing that someone is pregnant might help the business to make ads for that but it introducing someone privacy. The collected data should be used for statistical purposes only and knowing that statistic could help company to grow and develop.

    Reply
  5. Xinying Du

    There is some ethical aspect which is big data in customer service. Many websites like Facebook always want to people to fill out name, address, telephone numbers or photos. Those person information are all stored in Big Data. It is very easy for big data to collect person information. First, companies use target can be easily to customers. Customers can get what they want very soon. Companies like Amazon have cookies so they can save the items that you like. Then, they track the items you clicked to figure out what you may like to buy. It is easy and convenient for customers to find what they like. Companies can make money from using target. Third parties can make a profit when people purchase items. Using target can make profits. Big data can be used with companies using recommendation. According to the customers’ habits or the amount of click items, Companies could bring some recommendation items on the pages like Amazon. Once customers buy it, the companies would get extra money from their purchase items if they customers did not want to buy it on the first time. People who want to use big data to make benefit, they should first have some technology skill and the ability to analyze the marking.

    Reply
  6. James Mahoney

    The ethics of big data comes into play for two reasons. First many consumers could feel as though a company could be invading their privacy and almost seem as though the firm is spying on them. Second the analysis of big data seems to almost take advantage of weaknesses of human nature to sell products; this gives the company bad publicity because it seems as though the company is taking advantage of what they would consider to be their loyal customers.
    I could see big data being used for thing such as sporting events or concerts. If someone constantly buys tickets for a certain genre of music through a website then it would only make sense that that site would start to send notifications to the user about upcoming shows and events. I think for this people wouldn’t take as much offence and be more grateful for the early warning.
    I think there are 3 necessities to use big data in an organization: Statistical analysis, knowledge of human behavior and thought, and the ability to properly use the analysis to create a proper marketing scheme to attract not only previous customers but new customers.

    Reply
  7. Eric Choi

    There are ethical dilemmas to using big data in consumer services. For pros, it does make shopping easier when the right advertisement gets to the right consumers, and for businesses, it’s a pro because it generates revenue. Just like Amazon or Netflix, it does highlight better preference and customization for people with different needs/wants/style, when the big data can be translated to consumer’s preference. The cons of this is, it violates privacy and is too intrusive to the consumer’s lifestyle. Also, these data could be sold for profit to other companies, which is very unethical.

    The commercial applications for the big data are like what I mentioned above, consumer’s preference. Businesses can create a more preferred ad to the consumers with different needs to a varying range of consumers instead of sending out a generic ad which can be not as effective.

    You would need to have strong statistical and micro economic skills to interpret the big data into usable information with programs such Microsoft access and excel. With Microsoft access, the data could be used by organizing the data and drawing numerous conclusions from it, while with excel, regression analysis could be performed, or even produce visual graphs instead of complicated and vast amounts of numbers. These information output could be used by the organization and deduct, analyze and determine what the consumers’ needs are.

    Reply
  8. Carlie Willimont

    Yes I believe there is several ethical dilemmas to using big data in consumer services. A company such as target being able to collect demographic information such as my age, education, and address ethnicity seems unreasonable. Target is not using this information make my shopping experience better, or to reduce prices on certain items of interest to me but instead to make profit. Also having the ability to buy and sell my information to other companies is alarming. My identity, spending habits, address, and personal characteristics shouldn’t be a part of Targets or any others companies strategy. If I want to shop at Target I will, but I don’t believe its because they have collected this information and targeted me.
    Big data could be used by any company to make profit, clothing stores, grocery stores, restaurants and virtually any other company could buy and sell this information and find some way to make profit off of it. You would need to understand how to track people purchases, be able to convince people to give you email addresses, have customers fill out forms to receive membership cards and basically anything that would entice a customer to provide you with personal information would be a skill needed to get access to big data.

    Reply
  9. Valentine

    I believe that their are ethical dilemmas in using big data in consumer services. Big data,collects a myriad of information on consumers health,financial standing,even social norms ,that consumers like.Such a load of information ,almost lead to have a feeling that “big brother ” is watching you.I think that the use of big data ,should be use wisely ,with the number one intention of protecting consumer privacy . I think,that the use of big data is a little too invasive as it strives to segment consumers base on character, taste, or habits. Which at times can be a little unsettling especially when they start to gather data on consumers in terms of the level of their pregnancy.Commercial application for the use of big data should be limited ,any company that goes beyond the scope ,to collect big data on consumers ,should be aware that a consumers privacy is of paramount importance ,and that some of the information gathered should not be something to be trifle with.Anyone interested in collecting big data, should have the ability to organize large amounts of data quickly and efficiently as their is a ton of information one could gather ,from just standing on the street corners and handing out surveys to passerby.

    Reply
  10. Calvin Chu

    Well sure there is ethical dilemmas when using big data in consumer services. Because in most situtaion, consumer would care the most about their private information and want to know how their private information is being used. The company might want to improve their customer service by using those information. That’s fine. However, they need customers’ permission in order to do something other than that. In customers’ prespective, they think it is always danger to give out their private information for example, ID number, home address or E-mail address. Which also mean, companies also have difficulties when they want to collect customers’ information.
    The number of companies adapt using big data to gather and obtain customers’ information is increasing. Like almost everyone think. Facebook is the most popular and most common website which everyon know. There are lots of information which users can choose to either write it or not. However, most of the user will write down their information no matter it is private or not. Not only that, but, many people upload their video, update their status or even telling others what they are doing now. Why they are willing to give out information in this way? Because it is a way to attract other people to check or chat with him/her.
    You need some certain level of analytical skills to use Big Data. it is important to understand it, in order to make sense of the data. Also great sense of numbers.

    Reply
  11. Regi Rocha

    I think there are ethical dilemmas to using Big Data in consumer services; first the company is using your personal habits, purchase habits or grocery list to profit. Second, the company is trying to learn about your behavior to sell more products even if you are not interested and third, all of this data can be used by a third party to profit without you even knowing it. As well as selling your information, another commercial application for organizations in using Big Data is to know the demographics for people’s tastes and habits. For example, in some communities people can buy some kind of food and then Big Data can track and discover if the community is predominantly Jewish, or Latin or Oriental through the products they are consuming. They can then target larger areas, like whole communities, with products specific to that area.

    The skills you need to be able to use Big Data in an organization are mathematics, statistical reasoning or a combination of both. The employee needs to see patterns through the numbers and data and make this result work for the company. The problem with this is sometimes small data is more accurate than Big Data, and if it is not well analyzed this can create a distortion of the real consumer reality.

    Reply
  12. Kai Zhao

    1. Yes, I will say there will be plenty of ethical dilemmas in using big data in consumer services. Most of time, consumers would concern about their private information. Taking mailing address as an example, retail stores want customers’ mailing addresses in order to send them brand new information about their new products or discount stuff. However, in customers’ concern, there is always potential danger to give strangers private information like their living addresses. Thus, when companies or retail stores are collecting information from customers, there is always difficulties about this kind of private information.
    2. As time goes by, there is an increasing number of companies are using big data to gain more useful information from customers. Taking Facebook as an example, this application leaves a whole bunch of blanks for users to fulfill, and most of these blanks are private information, such as cell phone number, living addresses, relationships etc. Even though it is not necessary to fill them, users are tend to fill them so that their information seem completed to attract more attention. The purpose of Facebook users is to know more about each other and know about their personal information. In this case, users are willing to give out their personal information. Lots of people like to upload their pictures and update their comments to grab others’ attention.
    3. To contribute to an organization, these skills are most likely to be statistical analyzing ability, great sense of numbers, personalities’ analytic skills etc.

    Reply
  13. Kristina Madarasz

    Yes there are ethical dilemmas in using big data in consumer services. The biggest issue is privacy. It is probably okay to collect the information and analyze it in order to improve the overall customer satisfaction, but when you start to personally send out promotion offers to people’s addresses, you would need to get permission from the customer in order to do that. The information collected can only be used for the purpose they said it was intended for. As soon as they start using it for other means, it becomes an ethical issue. The company needs to clearly define their intentions. For example: sobeys does this with their reward card system. They have you sign up for their card and have a statement at the bottom of it outlining what the purpose of the card, that new promotions will be mailed to them based on what they buy most frequently. If the company started having someone come door to door trying to sell them something, it would be breaching the intended purpose of their customer reward system.

    You would definitely need analytical skills to be able to use Big Data in an organization. Analytical skills are essential in order to make sense of the data, what it means, how it relates, and what you are going to use it for in the grand scheme of things.

    Reply
  14. Jingyi Wang

    Although our personal information will be sold between companies without a legal issue, there is the ethical dilemmas that exist in the using of big data to analyze consumer behaviour. Everyone cares for their personal pravicy, and we don’t want our personal information to be sold as a product, because this may cause us a security problem.

    I think nowadays, many companies are using big data to analyze consumer behaviour and our habits were collected without notice. I have registerd in amozon as a member last year, and they will send me adertisement several times a week according to what I have reviewed in the websit, but the strange thing that came to me is that they can even suggest me the products I have never looked up in their website, and offer me with the deal about the brand that I have srearched recently in other websites. They also have a part called guess what you like in their websites and give me suggestions that I may like or the things from other fields I am not noticed. Even when I was reading novels on a online book websites, the pop-up advertisement of this website on my screen will show the products I have looked before, which is quite amazing.

    I think a person who wants to use big data correctly in their company needs to be good at math, logistics, statistics and analytics. Only when they can combine these abilities together and use them professionally, can they analyze the data correctly and give out the accurate result of those mass of information.

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  15. Litchi Peng

    Yes, I think there are some ethical dilemmas to using big data in consumer services. For example, consumers give their some personal information such as telephone numbers, addresses, and email addresses and so on. All of these information are stored in big data. Some ethical may steal consumer’s personal information and get profits. They may send some garbage emails or call your telephone numbers to promote their products. These behaviours interpret consumer’s lives. I think the biggest advantage to use big data is that I can get to know more about consumers so that companies can design the best and convenient way to satisfy customers. Through these personal information and the history records to know about each consumer’s preferences, which is a very good way to promote products and increase sales in marketing. Like groceries’ stores, they encourage customers to get a card of their store. It is true that customer can use that card to get discounts, the main reason that store encourage customer to have their card is that they can know the information of people’s preference. Which products are the most sales and which brand is better than another one. Big data helps managers to make decisions.

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  16. Crystal S.

    Yes, because the amounts of data become so large they become unmanageable creating risk for the company because there are no control or safety measures which ensure privacy and confidentiality. Organizations must also be responsible for how they handle the information such as transparency and accountability and who can have access to it. As data becomes huge it is also hard for organizations to manage the big data without taking risks, so they are faced with extra responsibilities in how they handle it. One way is to have some sort of software to help with storage solutions and manageability to make data management easier. This will also help organizations with processing abilities when using big data for analysis in determining predicative buying patterns of consumers. With these organizations would need to ensure that they have the right staff trained to be able to operate and use the software programs to ensure proper analysis techniques are carried out. Overall, I think that big data if managed properly would be beneficial to organizations that cater to consumers and that provide products and services that they need to know the future buying patterns of so that they remain competitive and successful in the marketplace.

    Reply
  17. Jill

    While I absolutely think that big data in consumer services is amazing, I am a little bothered to think of Safeway or Airmiles collecting information about me. A company’s objective is to make money. My first reaction to this story is if they can use technology this way, they should. However it gets a little personal when I think of what they are studying. If they are just looking at my current shopping habits and want to introduce me to a new or similar product compared with something I’m already buying, then I’m comfortable with that. But if they anticipate in the future I will have a new baby or be divorced, and start marketing to me based on those major life events, then I find that more than creepy and I’m very uncomfortable with it. In both scenarios, I am uncomfortable with whom else are they may give or sell my information to. If the store was to sell the info to their suppliers, then I could be bombarded with junk flyers or email. And what if the information is passed to health insurance providers? Would they stop insuring people who have unhealthy habits? I suppose the only way to remain anonymous is to use cash and to never use a loyalty card for a discounts. I suspect every large company is doing something similar to this, so it’s my responsibility as a consumer to “caveat emptor”.

    Reply
  18. Cameron Pituley

    I would say the biggest ethical issue in regards to big data is that of invasion of privacy. Some people may not like that a company can find out personal information just by paying the right person or doing a little research. I think that this is just a part of life now and that if you don’t want someone somewhere to find out about something you did in the past or are currently doing you should not have done it at all. I see potential in the use of big data to make peoples’ lives easier as people are marketed more precise and actually useful things.

    Big data is without a doubt a money maker. There is always someone willing to pay for more information about past, previous, or current clients. Anywhere that personal information can be gathered it will be if the company has the potential to do so and as a result the information can be sold or utilized for marketing purposes. The money can be made from personal use by a company or by selling to the highest bidder.

    To use big data in an organization I would say the primary skill someone would need to possess is an amazing analytical ability. Once an organization has someone who is able to analyze the data all they need to do is log it and create some kind of program to analyze it to whatever means to an end the company seeks.

    Reply
  19. Brad Melchin

    The biggest ethical dilemma to using big data in consumer services such as Target is the invasion of privacy. Although I wouldn’t mind the coupons coming to me based on information that they have stored about my past purchases, it’s an ugly thought to think that a grocery store might know more about me than my friends do. Personally, I just wouldn’t feel very secure knowing that there is a bunch of information about me that could potentially get into the wrong hands. This could lead to spam, junk mail, and other inconveniences that I would rather do without. Also consider the case used when Target sent baby catalogues to a man’s daughter who was still in high school. Target’s breach of privacy took away the daughter’s chance to reveal that secret information to her family first. Maybe she didn’t want to tell them at all, which means that consumer services, like Target, using big data could be experiencing confidentiality issues.

    Big data could pretty much be used with any commercial application that involves habitual purchasing or recommendation systems used by companies such as Netflix. Organizations can use it to find spending habits, consumer preferences, demographic information, and as a means to make money by selling the information to marketers of other businesses.

    If you have the technology with the algorithms already in place, it wouldn’t take very much skill to use Big Data in an organization. But as for Pole from Target, it took economical, statistical, and psychological skills to implement the Big Data system into the organization.

    Reply
  20. Sean Annis

    I would say that the two biggest ethical issues with big data are privacy and that companies could maliciously market towards these customers because of all the information they have available to them. With the possession of one’s shopping habits and information about what one if buying, this is valuable tool that thieves could use to target customers, should the information ever leak into the wrong hands. Also because target purchases and or collects so much data on individuals, they could use this to constantly harass customers. I feel they could abuse the information with excessive marketing.

    I think commercial organizations could use big data to determine when customers are financially able to buy certain products. for example, if a travel agency bought big data they could find out which household have the money to afford certain trips and these firms could selectively market to those who have money to spend. Also if phone companies used the data to Predict the age group of consumer, they could market to parents whose children are nagging them about cell phones.

    If you needed to use the raw data in your organization you’d need a strong statistical background and great analytical skills. Also you’d have to other create software and algorithms to make sense of the data or be able to purchase and run the programs that already had been designed for that purpose.

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  21. Victoria Wells

    The main ethical dillema that could occur surrounds the concern over privacy. If a company has access to information that could result in a potential sale, they may begin to pester a client with new information regarding a service that the client never expressed interest in. The data was provided for a specific reason, and if companies take advantage of this information and begin to use the information for other reasons, there is an ethical concern over intentionality. In addition, if these companies were to sell or share this data, then there is no privacy agreement made between the new company and the consumer whose data was just purchased.

    I think that in order to use Big Data, you will need to have great analytical skills (or be savvy with technology that analyzes it for you). Having a vast amount of information is only helpful when it is organized in such as way as to allow users to analyze the information and develop conclusions from it. Using software such as Microsoft Access allows users to easily organize the data and be able to pull different results from it. By organizing the information, companies can identify trends as well as identify which business strategies are efficient and successful and which ones are not. Through this identification, companies will be able to improve their efficiency, develop more successful business strategies, and maximize profits.

    Reply
  22. Heather Allan

    The ethical dilemmas are obviously present when using big data, however it would be extremely difficult to decide on a standard set of ethics to govern the use of big data because of individual moral standards are differing. Some people may believe that big data is an invasion of privacy and is creepy. Other people may believe it will improve their lives.

    The biggest issue with Big data is the privacy concerns with companies that collect consumer information and then sell it to other companies. Perhaps a way to improve the issues raised by Big Data would be to be more transparent with way they collect the data and implement it. If it were more of an open process people may not be so skeptical about it. I am indifferent towards it. I believe that it will take time to be able to define what is ethically right or wrong surrounding big data and it will not be a simple task to develop rules to govern the privacy issues. Governments should be pressing companies to really evaluate the possible intrusions on peoples private information. Big data could offer many opportunities to consumers that would not be possible without the data that these companies collect, so i believe it is a good thing and the rules should be discussed and ethically based.

    Reply
  23. Matthew Malm

    There is a vast amount of ethical dilemmas surrounding the usage of big data. For one, privacy is a major concern. Lets take political activist and current Premier of Alberta Alison Redford for example. Lets say someone of her caliber was watching Netflix and her preference in TV was specifically pornography. Now lets say that there is a Netflix employee who has access to these databases and notices Alison’s records. What stops this employee from confidentially dropping off said information to major broadcaster? Nothing and the impact would be tremendous on her campaign!

    However, for as many disadvantages there are advantages. Big Data, if available to the public, can be used to make informed decisions and can provide accurate inferences. In addition, businesses can find better strategies for maximizing profits by observing customer needs. For these two benefits to be accomplished, this information should not be sold B2B but instead made public through the use of the internet.

    Through the use of Microsoft Access, for example, anyone with an ounce of technical knowledge could yield results. In Access, results are just a few user friendly steps away. Now SQL databases on the other hand, would require a bit more programming knowledge but the computations that can be handled outweigh those of Access. I frequently have access to a global corporations databases and I can confidently say that personal information, including address/fullname/CreditCardInfo, is at my fingertips for the majority of the public and there is very limited supervisory activity monitoring personal privacy. The company that I am referring to also has the central database password as the word “password”, which is about the extent of their security.

    Reply

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