Factiva

Once upon a time at your neighbourhood convenience store, mom and pop behind the counter knew what you bought and stocked their shelves accordingly.

As multinational corporations take over, they've found a way to get to know you on a very personal level, too -- what you like, how much you spend, where you shop.

Loyalty Cards

Consumers' wallets are bulging with the plastic points cards from stores like the Bay, Shoppers Drug Mart and Petro-Canada. The cards attract customers, help determine stock and, most importantly, increase sales while providing consumers with an incentive to shop at a store.

The LCBO began using the Air Miles program in 1997 to record times of purchase, product sold and cost, said Chris Layton, co-ordinator of media relations for LCBO.

It uses detailed records of what products are selling at specific stores to tailor each outlet to the needs of that market.

Businesses learn about customers by analyzing the information collected, then applying the information to how they operate, said Michael Turney, manager of strategy and market development for SAS Canada, a global leader in business intelligence and analytics.

For instance, if data proves a specific date was busy last year, companies should use that historical evidence to prepare for the future. Customer privacy is an issue with many of these cards. The LCBO looked to guard customers' privacy when it initiated the Air Miles program by assigning numbers to customers to track purchases, not names and addresses.

But many firms want to put a name and address to your purchases. By collecting information on their most lucrative customers, companies focus on those 20 per cent that pull in 80 per cent of the profits, Turney said. They'll offer those consumers discounts and personalized mail offers.

Postal code

If a consumer isn't shopping at their local store, companies want to know why. "It all has to do with understanding the customer and their needs," said Maurice Simms, a communication officer with the LCBO.

Direct mailing using demographics

Companies can search by age, income, language spoken at home, education, home ownership and field of employment to market directly to frequent or likely customers, using Canada Post's Admail service. Advertisements are sent directly to a postal code where their target market lives.

Business cards/prize ballots

These are used to pinpoint what you do, where you work and how to contact you.

Reaping the rewards

Monica Henyk looks for the Air Miles logo at the stores she shops. If a retailer doesn't offer reward miles she'll go elsewhere. "I'm spending money anyway," she said. "So I get a little reward back."

Henyk receives a bounty in her mailbox from Air Miles -- coupons, advertisements and free stuff, such as two passes to Canada's Wonderland.

"What's wrong with getting coupons in the mail for products?

"They're giving me the opportunity to save money."

Warning: using

information against you.

Is the opportunity to redeem points for an electric can opener worth supplying stores with personal information?

Hamilton fraud detective Bob MacDonald doesn't think so. "I wouldn't give anyone any info."

The company may have a privacy policy in place and a secure database, but customers don't know who or how many people have access to the information, he said. All a criminal needs is a name and birth date to steal someone's identity. That's enough to create a credit card and start spending.

And there's no guarantee the information can't be used against customers, too.

There aren't any laws in place to protect consumers from purchase information being used against them in court or by the government, said Michael Geist, professor of law at the University of Ottawa. "You're making yourself vulnerable to government surveillance."

Katherine Albrecht, founder of U.S.-based Consumers Against Supermarket Privacy Invasion and Numbering, warned an insurance company could team up with a grocery store, so that health insurance for a person with a heart condition could be affected simply by the purchase of an item with "unhealthy" ingredients, such as potato chips.

COMMON KNOWLEDGE How marketers see you

Tuesday: The neighbourhood

Yesterday: Comparing communities

Today: Watch what you swipe

Day 4: Hamilton's future

News

Graphic : Marketing magic G

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