Brandwashed Page 27

  This kind of speculation, in a nutshell, is what data miners do, only thanks to all the sophisticated data-tracking technology and computer models they have at their disposal, these few purchases tell them a whole lot more about this woman than the naked eye ever could. How? Every time you or I use our loyalty card in a store, a record of what we’ve bought, how much of it, at what time of day, and at what price is sent to a data warehouse, where it is added to our digital folder (most companies and retailers with loyalty programs amass data continuously, then parse it into chunks that sum up our weekly, monthly, and yearly behavior. Then algorithms so complex they would make a math major’s head spin crunch all the data to come up with all kinds of interpretations of who we are and what we’re likely to buy (based on our own buying habits and those of millions of consumers similar to us). For example, when we use a loyalty card to buy groceries, we are being pegged by at least one supermarket chain as one of six different customer profiles: a “Time Pressed Meat Eater,” a “Back to Nature Shopper,” a “Discriminating Leisure Shopper,” a “No-Nonsense Shopper,” a “One-Stop Socialite,” or a “Middle of the Road Shopper,” 25 categories used to target us with specific deals and offers.

  There’s no end to what this data can tell companies about what we’re likely to buy. If I buy yogurt and vitamins, the algorithms predict I am probably a good target for an invitation to join the new local gym that just opened up. If I buy ready-to-eat meals, the data shows it’s a sign that I’m a busy guy and more likely to use a coupon that’s delivered straight to my phone than one I have to clip from the newspaper or print from my in-box. If I suddenly start buying baby wipes and diapers, I’ve clearly recently experienced a life change that’s likely left me run down and tired and am statistically likely to jump at a special offer for a day at the spa.

  It is by crunching these kinds of numbers that the data-mining industry has uncovered some even more surprising factoids: Did you know, for example, that at Walmart a shopper who buys a Barbie doll is 60 percent more likely to purchase one of three types of candy bars? Or that toothpaste is most often bought alongside canned tuna? Or that a customer who buys a lot of meat is likely to spend more money in a health-food store than a non-meat-eater?

  Or what about the data that revealed to one Canadian grocery chain that customers who bought coconuts also tended to buy prepaid calling cards? At first, no one in store management could figure out what was going on. What could coconuts possibly have to do with calling cards? Finally it occurred to them that the store served a huge population of shoppers from the Caribbean islands and Asia, both of whose cuisines use coconuts in their cooking. Now it made perfect sense that these Caribbean and Asian shoppers were buying prepaid calling cards to check in with their extended families back home.

  This is all well and good, you might be thinking, but how could that supermarket use this information to make more money off us? Well, first and foremost, it could create what’s known in retail parlance as an “adjacency.” An adjacency is when a store positions two or more products next to each other that are seemingly unrelated but appeal to the same target customer. This way, after that Jamaican shopper has picked out a coconut to cook with, she need only glance to her left to find the strategically placed display of prepaid phone cards and be reminded she owes Mom a call.

  Often adjacencies make stores and companies money by offering us solutions to problems we didn’t even know we had. For example, imagine it’s mid-August and recent incoming data shows that a lot of people are buying frozen strawberry shortcake. Now, typically the ingredients for fresh, homemade strawberry shortcake—local strawberries, bottles of whipped cream, and pound cake—are located in three discrete aisles of the store. However, gleaning from the data that this particular demographic has a weakness for strawberry shortcake, the supermarket installs a stand-alone display of strawberries, whipped cream, and pound cake at the front of the store. Thus, the shopper enters the store, murmurs to herself, Instant fresh dessert? Why didn’t I think of that?, and swooshes all three into her basket—costing herself about three times as much as a box of Sara Lee.

  Some businesses are using the adjacency technique to turn even bigger profits. Take Marks & Spencer, the upscale English department store chain. A few years back, by parsing the data taken from loyalty cards, its management noticed that more and more of its customers were buying Indian-style dishware, followed by ready-to-eat Indian meals. When management realized that a large number of first- and second-generation Indians must have started shopping there, a lightbulb went off. Why not open a currency exchange office right there in the store? Then another thought occurred: why not sell a service organizing travel to these countries? Which is why the retailer partnered with Thomas Cook, the UK’s largest travel agency, to create the Marks & Spencer Travel Club, which offers holiday discounts as well as “loyalty points when you book your holiday using your M & S Credit Card.” 26

  But this isn’t all companies do with the information they compile from our loyalty cards. Not by a long shot. To truly see the volumes that even an innocent trip to the grocery store can tell a company about us, and what it then does with that knowledge, let’s take a quick trip to a regional grocery chain we’ll call Sparky’s.

  First off, mind if I note right off the bat here that Sparky’s was smart to position its front door on the right? That’s because data compiled from a study of two hundred stores reveals that shoppers who move counterclockwise spend two dollars more per trip than those who go in the opposite direction. Human beings are naturally more inclined to move to the left (because it’s easier to reach out with our right arms to grab whatever it is we need), so a right-side entryway is a subtle yet effective way to ensure a counterclockwise shopping flow. I might add here that Sparky’s was smart to outfit its store with oversize shopping baskets, as studies show that the bigger the shopping basket, the more likely we are to fill it to the brim.

  After desperately making my way through the labyrinth of shelves, towers of products, and special displays looking for the apples, I find the Granny Smith apples and put five in my basket (I really only wanted three, but I saw the sign saying “buy four, get one free” and immediately fell for the classic ploy that author William Poundstone calls “nonlinear pricing,” meaning the store has upped the price of those four apples by 20 percent so I’m actually paying the exact same amount per apple even though I think I’m getting a bargain). My choice of organic apples tells Sparky’s database that I’m pretty well educated, make a good living, and am more likely to buy eco-friendly products. No surprises there.

  Let’s pause once again. Notice how I had to navigate around numerous displays before I chanced upon the apples? It’s no coincidence. The more complex the navigation paths we’re asked to walk, the slower we walk, and the slower we walk, the more stuff we are exposed to . . . and tempted to buy. In order to combat the increasing sophistication of shoppers, many of whom have learned to arm themselves with shopping lists and make a beeline for what they want, more and more supermarkets are mixing around groceries—or changing the location of items on a monthly basis—so it’s harder for us to find what we’re looking for. The result is that not only are we tempted by more products, but finding what we want becomes a game of sorts (remember the power of games?), at the end of which we often reward ourselves for our hard work by buying something that wasn’t on our list.

  Next, over by the pharmacy aisle, I pick up a package of Nicorette (even though I’ve never smoked; it’s just part of my little experiment). By my buying the Nicorette, Sparky’s is immediately able to establish that I’m almost certainly between the ages of twenty-five and fifty-four and more likely to buy name-brand products over the generic or store-brand variety. Again, makes sense, right?

  Next, just for fun, I buy a package of Jheri curl texturizer in the women’s hair-care section and a small box of Dora the Explorer Band-Aids. Now the store will make two fairly good assumptions about me: that I’m an Africa
n American female and that I have a child under the age of five—and am thus a good candidate for coupons and offers on those particular brands of everything from juice to breakfast cereals to cosmetics that the data miners have found to appeal to my demographic.

  Tucked away at the rear of the store, so the pharmacists can keep a close watch on teenage boys, the condom display takes up half a shelf. Just for fun, I pick up a pack of neon, ribbed ones. Now I’m confirming to the data miners that I’m a woman (who just happens to be named Martin). Why? Because most people who buy condoms are, in fact, female (note that the name of the section is “family planning,” which subtly targets the female of the household by implying that this is the section for the person who is generally in charge of schedules, date books, doctors’ appointments, and, yes, condom use). Incidentally, this is why nine tenths of the condoms for sale proudly exhibit the words “sensitive” and “thin,” two adjectives guaranteed to strike a chord with the contemporary woman.

  The one exception to the women-buy-condoms rule? It comes in a box similar to the others, except nowhere on its packaging does it mention the words “sensitive” or “thin.” Instead, its packaging features what at first glance appears to be a Roman soldier’s helmet, or, wait, could that actually be the engorged head of a penis? The words on the box say it all: “Extra Large Trojan Condoms.” That’s right, had I picked up a box of Extra Large Trojans, Sparky’s data miners would have instantly revised their assumption about my gender, as swaggering (often hopeful) males, not females, are the ones who buy “extra-large” condoms (and I tip my hat to the marketing whiz who thought up that one).

  At the cash register, I give the cashier my Sparky’s card and pay, though not before grabbing a bag of those new pretzel M&Ms—a small impulse buy telling the data-mining company that I’m amenable to trying new products and therefore a good target for future coupons on newly rolled-out products.

  Next, the second the cashier swipes my loyalty card, Sparky’s database will know exactly what I’ve purchased and how much and will nail my demographic as an educated, health-conscious, sexually active African American ex-smoker between the ages of twenty-five and fifty-four who has a young daughter. Then the company will add my purchases to its databank, where its computers will crunch that data (and the data generated by every other card-wielding customer who walked into the store that day) to make all kinds of conclusions and predictions about who I am and what my preferences are. Then it will turn right around and sell the results not just to the companies that make the products that I bought but also to the companies that make the products my profile indicates I am likely to buy. It will do so for each and every subsequent visit, just as it will for the thousands of other shoppers in my particular zip code. And based on what the companies now know about me—and us—they will reformulate their marketing messages, rethink their inventory, and, sneakiest of all, start targeting each and every one of us with advertising so tailored, so personalized, that we’re powerless to resist it.

  Believe me, in the future supermarkets will get even smarter and more invasive. Recordant is an Atlanta-based in-store monitoring company that provides digital audio recorders to capture all customers’ conversations with store employees. Sophisticated software then analyzes these recordings to isolate recurring words or phrases. Then there’s Brickstream, whose clients include Toys “R” Us, Office Depot, and Walgreens and which uses dual-lens cameras to amass information about where and for how long people shop, as well as how they respond to various products.27 And PathTracker is an electronic monitoring system that combines buying data with the paths of shopping carts through supermarkets. How? It wires carts and baskets with a location-tracking device that emits an inaudible signal every few seconds. At which point “an array of antennae around the store’s perimeter captures the signal, which is then analyzed for individual shoppers as well as aggregated to provide composite views of shopping in the store.” 28

  Yikes.

  They’re Playing My Song

  But wait, that’s not all that’s going on at Sparky’s. As I meander out of the store, I catch myself humming the Paul McCartney song that was playing overhead while I was shopping. Think this is just some random selection? It’s not. It’s actually a very carefully and deliberately selected track of Muzak, a type—and in fact a brand—of music that has expanded beyond the insides of elevators and today serenades some one hundred million people a day29 inside Gaps, McDonald’s, Barnes & Nobles, and countless other restaurants and stores. So how does a store decide what tune to play overhead? Well, first, one of Muzak’s “audio architects”—a term for someone who’s trained in the physiological and psychological applications of music—pays a visit to a retailer or restaurant and looks at the store’s data-mining research to figure out what demographic shops or eats there. Then the audio architect carefully selects a playlist targeted at that demographic, a practice known in the biz as “narrowcasting.”

  It’s in this way that Muzak has designed seventy-four music programs in ten categories, ranging from indie rock to hip-hop to classical. Mapped out in fifteen-minute cycles that rise and fall in intensity using a technique known as “stimulus progression,” the speed and pacing of each individual playlist are carefully designed to have a certain psychological impact. Ever notice that the Muzak playing in supermarkets and grocery stores is much slower than the Muzak playing in restaurants? Well, again, it’s because research shows that slow music makes us move more slowly, and the longer we hang around in a store, the more likely we are to buy something. According to Douglas Rushkoff, author of Coercion: Why We Listen to What “They” Say, in U.S. department stores, customers exposed to Muzak with a slow tempo shop 18 percent longer and make 17 percent more purchases, and in grocery stores, shoppers make a whopping 38 percent more purchases when slow Muzak is overhead. On the other hand, says Rushkoff, fast-food restaurants play Muzak with more beats per minute “to increase the rate at which a person chews.” 30 Thus, they get us out of there sooner and can serve more customers and earn more money.

  Thanks to narrowcasting, Muzak can even tweak its selections to subconsciously persuade us to buy different items depending on what day of the week it is. Saturdays? The music will be more romantic, suggesting, Buy her something—like roses or jewelry. This technique has been found to be so effective that some Japanese supermarkets have split their stores into zones, each one serenading consumers with sounds designed to optimize spending per minute. In the fresh-fruits-and-vegetables department, water drips, birds sing, and the wind blows from overhead speakers; in the confectionery department, childish songs are interspersed with the sounds of children giggling, while over at the butcher’s a steak sizzles overhead.

  As if that weren’t enough, Muzak also offers retailers a more subtle service dubbed “atmospherics,” designed to hit us on an even deeper level.31 Imagine you’re a sixteen-year-old girl walking into a clothing store in Middle America. The mood and the decor are silvery, sexy, and urban. The employees are uniformly hip and attractive. Now add the seductive beat of fast-paced electronic music. Does this environment create a fantasy for a starry-eyed young girl who’s always dreamed of moving out of her small town and into the big city? I’ll say. On a subconscious level, the music allows the girl to imagine herself as the cool, sophisticated city dweller she’d like to be—then buy those shirts and pants to complete the picture. Believe me when I tell you that stores do this deliberately. When the Gap was rolling out a new sweater line, for example, Muzak vice president Alvin Collis determined that since sweaters represented friendship, family, security, and protection, the stores should play music that evoked fuzzy, cozy feelings. Among the songs Muzak selected to create this “atmospheric”? Louis Armstrong’s “It’s a Wonderful World.” 32

  A South American banking chain once tasked me to help it transform the widespread public perception of its having shoddy, second-rate customer service and long waiting times. When I analyzed the customer experience, including h
ow long people had to wait, I realized that the wait wasn’t actually that long; because people anticipated that their visit to the bank would be long and frustrating, they felt as if they were in line longer than they actually were. So using the data compiled by companies like Muzak, we carefully choreographed the rhythms of the music playing overhead and created what was essentially a three-act soundtrack. At the door of the bank, the music serenading consumers was slow and welcoming (in fact, it was a beat slower than the average human heartbeat). As they came closer to the counter, the music would gradually increase in tempo, culminating with a fast beat as they carried out their transactions. The result? Customers “perceived” customer service as being twice as good as before—and incidentally, the bank’s revenue increased by 10 percent—all thanks to the speed of the music playing overhead. The good news? The service was already great—yet it took music to convince the customers of it.

  I Know What You Bought Last Summer

  Have you noticed that those traditional printed price tags on the shelves of supermarkets and big-box stores like Costco and Walmart are slowly being replaced by digital pricing displays? You probably assumed this was for the sake of efficiency; after all, why have employees waste time walking around the store changing those prices every day or week when it can be done electronically? And sure, there’s some truth to this explanation . . . but it’s far from the whole story.

  Have you also noticed how, not unlike highways and commuter trains, supermarkets have their peak traffic times? Swing by the store at 5:00 p.m., and it will be jam-packed. Stop by at eleven in the morning, on a weekday, at least, and it will be nearly deserted (except for maybe that elderly couple buying a cantaloupe). No big shock here; everyone knows that the vast majority of people do their grocery shopping when they get off work, if not on Saturday or Sunday. But what you probably didn’t know is that now these stores can, in keeping with the traffic metaphor here, change the price of the toll depending on what time of day you’re driving. Have you ever felt that uncontrollable craving for an ice cream sundae at midnight and realized you were out of whipped cream? Such an urge is too powerful to be denied, so you gun your car to the nearest twenty-four-hour supermarket to buy some. I’m guessing that you’re willing to pay more for that can of whipped cream than you would have paid at the 5:00 p.m. peak shopping time. Now you can!