Testing the Boundaries of Consumer Research

Several recent articles have addressed what companies are doing to mine information on consumers and trends from data and in-store observation. There have been articles about Target’s efforts to track customers and predict what they might buy, then send coupons, etc.  An article in The New York Times Sunday magazine in February stated:  “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 them.”  Target was featured in the article, but chose not to comment directly. Marketers are also making efforts to better use data. McKinsey Quarterly recently published a very interesting article that discussed Proctor & Gamble’s efforts to better use all of the data available to it.

A former colleague of mine, Ralph Blessing, Executive Vice President, GfK Custom Research,LLC.had this to say about the subject:  “Digital technology is influencing market research in many different ways - from data collection which is much more immediate and mobile to understanding behavior in much deeper ways throughout the entire shopping process (from purchase consideration, researching, shopping, buying, using and post use). As this occurs the industry also has to be much more thoughtful and careful about maintaining confidentiality. For example, many companies use net mining (or netography) which can yield very rich insights, but can also unearth potentially sensitive information.”

“It raises all sorts of privacy, security and ethical issues about what is appropriate to collect, use, and 'sell' as well as how to use the information. Consumers will certainly react very negatively if the power of this information is misused and feels evasive or leeks out something they feel is private. Retailers should be highly transparent and cautious before over-zealously using the data and power they now possess.”

Stay tuned for more discussion on this topic.  As Ralph said, it is something that responsible companies are addressing in an effort to provide what consumers want without over-stepping bounds in many important areas.