This week we’ve been talking about Anthropologie’s customer service and return policies as part of a larger conversation about retailers and the consumers they serve. (Part 1: Customer Service; Part 2: Return Policies.) Now we come to most complex part of the conversation: consumer tracking.
The impetus for these posts was when an EA community member, Jen, posted about receiving a threatening phone call banning her from Anthropologie after making returns at her local store. It’s incited many reactions within the community. There’s the angry reaction: how dare they make a threatening call to a customer. There’s the fearful reaction: If I make too many returns will this happen to me too? And there’s the paranoid reaction: Why are they tracking us? How do they know how many returns we’ve made?
It’s time to talk about all of those reactions and more.
WHAT IS CUSTOMER TRACKING?
Chances are your keychain has a few store loyalty cards on it. Maybe there’s one for your grocery store that gets you special discounts for loyalty members only. Or it could be your gas station fob that’s connected to your credit card. Perhaps your pet store card that keeps track of all of Fido or Kitty’s favorites.
Maybe you have none of those little loyalty cards. If you use a credit or debit card to make purchases though, it’s pretty much the same thing. Unless you’re an all-cash all the time shopper chances are stores have a purchase history for you. They might have lots of information you’ve volunteered like your name, address, age, birthdate. They might none of that information and just have you as a randomly assigned number.
At the simplest level, customer tracking is a way for any retailer to create a customer database. Each customer has their own record in the database. The database includes information about your purchases at that store and may include information such as your purchase frequency, the items you purchase most often, etc. And there is likely some personal information in there as well. At stores with loyalty programs, your account is tied to either your loyalty account number, your credit/debit card information, or perhaps both. At stores without it’s the credit/debit card information that’s the basis for your account. Using more than one card doesn’t matter — most systems can easily match you up based on name/address information that’s tied to your cards.
CUSTOMER TRACKING HAS BEEN HAPPENING FOREVER
As long as there have been places to buy things I promise you there’s been customer tracking. Long before loyalty programs. Even before credit cards. Way before technology. Smart business owners want to know who their most profitable customers are. Those customers receive perks and in turn those customers help support and grow the business.
As a kid I can remember a friend’s mother who had a special card for Saks 5th Ave that entitled her to 10% off every purchase at certain brands. Was she a frequent Saks shopper? No, but she spent a lot there. The store team knew which brands she liked and enticed her back with discounts there while introducing new brands she might like? My neighbor’s dad owned a grocery store and for a few frequent customers staff would do their shopping for them, meaning the customers just came in and picked up the shopping bags, food already in them.
How did Saks know which new brands to show my friend’s mom? How did my neighbor’s Dad know which groceries to put in his customers bags? Customer tracking. It might have been much more manual than the programs we have today, it might not have been as elegant as the upsells and cross-sells we’re bombarded with now but I am quite sure that every successful business owner had some kind of written or mental record of what his customers bought, similarities between them, and what products they might like based on those similarities and purchases.
ALL RETAILERS TRACK CUSTOMERS TO SELL US MORE STUFF
Every. Single. One. Every place you shop has a record of you. It’s why I still occasionally get King Soopers flyers at my sister’s house even though I 1 – never lived at her current address and 2 – haven’t lived in Colorado for nine years. It’s why FreshDirect sends me “we miss you!” emails with a 15% off coupon for my next order even though I haven’t used them in about 2 years. It’s why SeamlessWeb tempts me with specials if I use their app, why Match.com reminds me that I’m single via emails daily, it’s why Chevrolet and other GM brands ask me to trade in my 2004 Saturn Vue for something else even though Hunk no longer exists because I sold him back to the dealer in 2007 before I moved into New York City. (RIP Hunk, I miss you. You were a great SUV!)
If you think you’re escaping tracking by not signing up for loyalty programs, or by using a different credit card each time you’re at a store, or even by using cash, you’re fooling yourself. It’s very likely that retailers are tracking you anyway because that’s how good technology is now.
Why do they track us? Is it some Big Brother scheme? Is it to keep information to be used against us later? Is it to watch our purchases vs. returns, our regular price purchases vs. sale purchases, our price adjustments?
No silly. It’s just marketing.
Seriously, that’s it. Although the data is used in a myriad of ways which we’ll address below, the main purpose of customer relationship management (CRM) tools is to track us so retailers can figure out how to get us to buy more. And the more data points a retailer has on each customer the more accurate their predictions of what we might buy will be.
If a CRM tool can show that 80% of 30-year-old female customers living in NYC with incomes above $100K who visited the store in the past two weeks bought some sweater, chances are that if you’re in the other 20% of that demographic who hasn’t bought the sweater yet you’re about to get an email, or a message, or something about it. That’s just one example but it’s the purest sense of how retailers and their marketing teams want to use your data. You might that example has too much personal information to be real but you’d be wrong. Many systems aren’t that advanced yet, but they’re catching up.
So when you wonder why some of us get certain Anthropologie emails but not others, or why some of us get Free Shipping and not others, or why some us get the catalogue every month while others of us have fallen off the list, it’s likely just marketing. Something about our customer record has told Anthropologie what carrots to give us and which ones to hold back. Even if we love all carrots!
In theory customer tracking doesn’t sound so bad. If my loyalty purchases indicate I’ve bought a bunch of tops this year already, and maybe some sweaters and cardigans too, I wouldn’t be so mad about getting a coupon to buy some skirts to go with the stuff I bought! Or maybe many customers who bought x dress and x pair of shoes found x cardigan completed the outfit nicely. Getting an email showing that outfit is a good way to tempt me into copying them! In those cases the marketing is pretty harmless.
It’s when retailers start making guesses about me that things can get funny, and scary. For example, I now get catalogues from Giggle in the mail. I have no child. I’m not married. But because I bought baby stuff for friends’ showers there, and because I’m 30 and female I fall into Giggle’s demographic. It’s for this same reason that Target sends me baby coupons. It’s predicting that based on my current life and demographic stats I’m starting to think about babies. It’s not wrong mind you because I am thinking about marriage and babies and all that good stuff, but babies are not close for me. Easy enough to ignore.
And it’s not just retailers! Then there are the times that I’m reading my Gmail and I see some ad that is scarily specific. Like maybe I was looking at a Madewell bag earlier in the day and now I’m getting bombarded with Madewell text ads. Or text ads about things that are made well, which can be pretty funny. But it’s less funny when the text ads pick up something in an email I read. Last year for instance when my best friend and I were planning our Paris trip I noticed a distinct uptick in Paris related Gmail ads as soon as we started emailing about it. That was kind of creepy.
CUSTOMER TRACKING CAN BE HARMLESS OR CREEPY
The problem for privacy advocates is that consumer tracking will never go away. Last year many Silicon Valley companies successfully lobbied Washington out of passing stricter privacy controls for children. And if they can win that battle on semantics you can bet privacy is losing just about every time.
Tracking wouldn’t be so bad if it was used for harmless things like coupons, loyalty benefits and perks. But when you have a data set so tempting other ideas start to creep in. Retailers realized that if they could figure out who the best customers were through their CRM tools, they could also figure out the worst customers. And there are varying degrees of worst customer. Obviously thieves are on top of that list, and it’s hard to stop a thief unless you catch them in the act. Retail employees are even trained not to pursue thieves they see stealing because it’s too big of an insurance risk if the employee is hurt. Instead, third party companies are used to catch and prosecute thieves.
Also on the worst customer lists? Customers that cost the business money. The coupon code stackers, the serial returners, the wardrobers, the customers whose items keep getting lost or damaged. When patterns like this show up in a customer’s record as habitual and expensive for the company they may temporarily or permanently ban the customer. It’s very important to note that customers are rarely, if ever, banned permanently from a store. It happens in less than 0.05% off all customer records. You’re more likely to get struck by lightning. But it does happen.
In these cases, it’s the rise of third party retail security companies doing the dirty work. Retailers want to focus on growing their businesses with their best customers. So they pass off flagged records to third party companies. It could be a CRM company, collection agency, a data mining company, or in some cases a private investigation company that looks through these customer records and decides what customers need to be banned. Again, this happens so infrequently it’s almost not worth mentioning, but because people tend to react with such indignation when it does happen I’ll talk about it a bit.
The third party makes its recommendations back to the retailer. The retailer either than adds a note to the flagged account that the customer is no longer allowed to buy things there, or the retailer has the third party or one of its agents call the customer directly. 99.9% of the time these bans are with good reason. As I mentioned in Part 2 yesterday, when my return level at Victoria’s Secret became excessive they temporarily banned me from returns (and it’s worth noting that I was still more than welcome to make purchases there). Although I wasn’t a serial returner on purpose I was one in their database and that was all that mattered.
As the world gets smaller thanks to the technology that connects us, tracking can edge even deeper into the gray area between acceptable and creepy. Companies like Acxiom, for example, are little-known to the public but extremely lucrative to retailers. Acxiom and its ilk break the limits of the details one retailer can collect by putting together your records from many retailers, plus your financial and health information too.
So: instead of my favorite store just knowing that I’m a 30-year-old female living in NYC whose birthday is on January 22nd, it might also now know that I also shop at Saks, Barney’s, J.Crew, Madewell, La Garconne, etc. It might also know where I work and how much money I make annually. It might know if I’d applied for a loan or mortgage in the past year, how many times I visited the doctor, if I had any health issues or changes, if I’d been arrested, etc. Scary to think of, isn’t it??
Of course retailers and data-mining business will say it’s all just to make a more complete picture of each consumer so they know what to market to you. But what if that information is used against us in any way, whether it’s lumping us into a less desirable marketing group at a store we like, denying us discounts based on our income, or deciding that we’re not worthy of being a customer there at all, the shopping repercussions may be rough. Which is to say nothing of the overall implications — could we be denied a job due to our record with one of these companies? Turned down for a mortgage? It’s an unregulated grey area right now.
HOW THE ANTHRO CARD TIES IN
I’ll take off the tinfoil hat now because the likelihood of any of those last ungodly scenarios happening is very low. Nearly all of us are honest, hard-working people that these companies couldn’t care less about. Until we spend a lot, in which case we become VIPs and they care about us quite a lot!
I’ve read a lot of paranoid comments about how Anthropologie is using the anthro card to identify people to ban them from the store. It’s such a fringe use case that I’m shocked to see so much concern about it. Ladies, the anthro card is about birthday discounts and emails. That’s really it. Anthropologie wants to market to you! They want you to buy and your little yellow card helps them guess what you might be more likely to buy.
Bans? Fringe cases. But when they do happen it’s based off of records from your credit card or debit card, not so much your anthro card. If you’re concerned that your return level is going to cause you to get banned, I would ask you a simple question: are you net positive for the year? Did you spend more money at the store than you got back, regardless of the quantity or frequency of returns? If you did spend more than you got back then you’re fine.
Trust me, no store wants to ban a customer. It’s like asking a dog not to eat a treat that’s right on its nose. No store wants the reputation hit a jilted customer causes, no store wants to tell a customer not to shop there. Although mistakes do happen most bans are done with very, very good reason. So relax. Anthro (like all retailers) wants your money and for that reason alone they’ll continue to welcome you as a customer whether you buy at full price, half price or nearly dimed-out.
Just know that customers who buy at full price will get better treatment. Frequent customers get better treatment. Big spenders get better treatment. It’s just marketing.
What do you know about customer tracking? Do you think it helps customers or hurts them, or neither? How many loyalty programs are you a member of? Do you like the special perks of loyalty programs? Are you worried about your privacy?
