Target plans to get to know you better

One of the strengths of Target is that it knows its customers pretty well. The retail giant has long tracked their purchases, looking for clues about other things a shopper might want to buy.

But as good as the company has been on that front, it plans to do even more. Target intends to get much better at learning about customers and use that knowledge to encourage them to spend more.

"Data and analytics is one of the capabilities where we know we need to make up ground quickly," Chief Strategy and Innovation Officer Casey Carl recently told Wall Street analysts. Toward that end, Carl said, Target plans to create an internal center for data analysis. He said the center would yield more personalized email marketing, more tailored promotions and personalized offers delivered through the company's Cartwheel smartphone app.

Cartwheel has some 13 million users, about the population of the state of Illinois.

"We're going to continue to improve on the mobile experience in a number of ways this year — in-store location and navigation capabilities, greater mobile payment integration and testing new technology like iBeacons — to make shopping even more personalized," Carl said.

Anyone who has never heard of iBeacons might want to see how a vendor pitches it in a YouTube video.

"You could be out for a stroll, when your phone gets a notification from a nearby store," the vendor says. "It's enticing, so you go in to check it out. Upon entering, an employee greets you."

Once inside, the customer will notice a preferred product and, sensing the customer is approaching it, the beacon will deliver a coupon straight to the phone.

Target will begin testing iBeacons in stores later this year, but only with customers who agree to use the technology.

iBeacons will be new to Target and its customers, but they're just the next step for a company that works hard to find out what customers will buy.

Target's privacy policies say the company tracks customers' transactions, browsing on the retailer's website, social media posts and other actions to help craft personalized offers to shoppers.

A few years ago, a Target executive disclosed that the retailer could determine which individual customers account for about half its in-store sales, most of its online sales and a quarter of the browsing on Target websites. Those numbers are likely higher now with growing use of Target-branded debit and credit cards.

But Target also draws lines. The company is deploying mannequins in about 1,000 stores, but not the kind with cameras that can detect the age, sex and other characteristics of shoppers.

On the other hand, retailers don't need spy mannequins or iBeacons to obtain useful data.

Ravi Bapna, chair of the Information and Decisions Sciences department at the University of Minnesota's Carlson School of Management, said data collected from mobile devices could let Target effectively watch shoppers browse a store, seeing what items they're interested in and what may make them buy something. It's akin to watching shoppers move through a website.

"With the mobile phone, you get similar kinds of rich data," Bapna said.

Like other retailers, Target can identify smartphones within its stores. But the retailer says it only notes if shoppers on its WiFi network or smartphone apps are in or around a store, not where they are within stores.

Bapna expects companies to harvest and act on whatever information they can, as long as they don't overstep legal boundaries and social standards.

"The boundaries of what can be collected and integrated are getting pushed every day," he said.

A few years ago, Target was widely chastised after a Target executive revealed the retailer could tell when women were pregnant, a reminder that discretion and diplomacy are important in data mining.

"What you don't want to do is get into situations where you're predicting behavior and informing the customer of that predicted behavior before it's rational," said Dave Marcotte, senior vice president for retail insights Americas for Kantar Retail.

"'I'm glad to hear you're going to become pregnant,' is definitely on the wrong side of the line," he said.

Many people freely hand over useful information. People who sign up for Target's baby, wedding and college registries offer up lots of tips about what they might buy.

Many, if not most, shoppers don't mind the company's tracking.

"I get coupons in the mail. They seem to be a little more tailored to what we would possibly buy," said Sarah Erbes, of Burnsville. "I understand they're just trying to do their best to serve the customers and to do that they need to know our shopping trends."