When Joseph Wilson was in the market for a pre-fabricated shed, he knew where
to look for a good deal.
While at work one afternoon, Wilson pulled up some sheds available on the
Home Depot website on his iPad. The prices looked reasonable, but he still
wanted to clear the purchase with his wife.
That night, at home, Wilson pulled up the same shed on Home Depot's
website. This time, he used their PC desktop computer.
The price was $100 less.
"It didn't seem to fit (Home Depot's) business model," said Wilson, who
lives in East Hopewell Township.
Curious -- and a little miffed -- Wilson mailed a letter to Home Depot's
president looking for an answer to the price discrepancy.
Within a couple of days he had a call from the company saying they had
not noticed a change and assumed it was a technology glitch. They would look
into it, Wilson said he was told.
Something was up.
You are what you click
It's not a secret that companies target customers in their advertising.
Chelsea Pazelchak is a senior at York College majoring in marketing.
In her consumer behavior class, she was taught the principles of
targeting consumers, like finding ways to meet customers where they spend
their time -- the Internet, television, Facebook; learning the style of the
person -- do they rent or own their home or car. To what brands are they loyal
and why.
"In consumer behavior it's a downfall to target just a demographic,"
Pazelchak said, meaning something they can't control like age or sex.
"Instead, you want to focus on their lifestyle," or the choices they make.
In this digital age of mobile phones, tablets and computers, people spend
more time and buy more products online, said Gerald Patnode, a professor of
marketing and chair of the Graham School of Business at York College.
Advertisers recognize the new media and embrace it to connect with
consumers, he said. Orbitz, the online travel company, publicized their data
mining strategy this summer after various wire reports claimed Apple users
were seeing higher prices than people searching on a PC.
Barney Harford, Orbitz CEO, wrote an op-ed column in USAToday explaining
how the company uses consumer information.
It's all about collecting information about where people click, Harford
said, not what type of computer is being used. The company collects your data
and then tailors your next visit to the website to reflect your previous
choices.
For example, what type of hotel room you like to reserve or how much
you're willing to pay.
Your TV might be watching you
While a tailored Internet experience is now commonplace, addressable
television ads are starting to show up, Patnode said.
Allstate Insurance is trying a new strategy to sell renter's coverage
where you will only see the ad if you currently rent.
Two neighbors could be watching the same show at the same time and on the
same commercial break see two different commercials.
It all got started in politics, Patnode said. Political parties would
target voters by collecting socio-demographic data and tailor their message
depending on what which television station it was aired.
Allstate aired the commercials on DirecTV and Dish Network. The
information necessary to target consumers was purchased from data collection
firms, Advertising Age magazine reported.
This type of targeting could bring up questions of privacy from
consumers, Patnode said.
"There's always the concern that a group of people will get upset from a
lack of privacy," he said.
Overall, however, consumers respond well to ads that present products
they want, Patnode said. So, companies will keep collecting the data and
consumers will give up some privacy.
'No more secrets'
After a couple of weeks, a representative from Home Depot's service
department called Wilson.
He was told the discrepancy in online shed prices was because of regional
pricing.
"There are so many factors that go into regional pricing," said Jennifer
King, a senior manager of external communications and social media at Home
Depot.
Factors like supply, demand and local taxes can affect why identical
items might have different prices at different stores, she said.
If a consumer does not choose a particular store location on the website,
they will be shown a national price, King said.
Wilson determined the price difference he saw was caused by not choosing
a store location on his iPad, which then gave him a national price. When he
looked up the shed at home, the site displayed the nearest store's price.
The site was trying to present a Home Depot experience based on the data
from two different computers that both happened to be owned by Wilson.
And that's supposed to happen, King said. Home Depot collects data based
on where consumers click and the site could look different depending on your
search history.
This marketing strategy isn't new, Patnode said. Advertisers have been
collecting information on what consumers buy for decades.
"The change is the accessibility of information," he said. "There's no
more secrets."
