Target On Trial: The Enhancer That Broke Customer Trust

I hail from Minneapolis. The bold, urban north that houses the headquarters of many Fortune 500 organizations, including the retail giant Target.

I used to be a level ten Target groupie, not just because of the influence they have on the city that I call home, but due to the fact that they have always seemed to be invested in the retail and digital customer experience. Target is widely known for being competitively priced, while providing an easier and more inviting experience than alternatives like their mega rival Wally World [I thought for the longest time that my Dad pioneered this Walmart nickname but Reddit educated me otherwise].

I needed to go for a #TargetRun, to get a box of tissues, when I read the news about their price switching, the ultimate inconsistent experience practice that pushes ethical boundaries.

What happened?

If you haven’t heard, news broke early last week that Target has been price switching on their mobile application. Target uses an algorithm that changes the product price when the customer is within a certain distance of a store location, and when the mobile user had given the app access to their geographic location. A local Target shopper blew the whistle on this deceptive practice after her experience where an item was listed as $70 on the app while she was in her vehicle parked at the back of the Target parking lot. By the time she reached the entrance to the store, the app had increased the price of the product to $100. What deceit?! Baiting the customer into the store and then switching the price seems very dishonest!

It’s true, we can do some incredible things with mobile technology these days. Leveraging data collected from a mobile app can assist in hyper-personalization, customer journey optimization, and more. Target positions their mobile app as a tool where you can get great deals and enhance your in-store experience. While the app may deliver on some of these promises, it also leverages your information to deliver on the exact opposite of their price guarantee, price discrimination.

Where is Target’s integrity?

Customers who leverage Target’s mobile app are likely former users of Cartwheel, their legacy loyalty program and mobile app. Cartwheel provided users with deals, and the deals would get sweeter the more you leveraged the app by scanning the items in your cart. Target folded Cartwheel into their main app in 2017 to streamline the experience. They created a single app for customers to have one-click access to deals, shopping, and product information. It can be expected that many of Target’s most loyal customers are leveraging this app, and they’re using it as a key way to build or maintain their relationship with the Target brand. After all, the more you use it, the more Target rewards you.  

In the name of better deals and a more personalized shopping experience, customers likely give Target access to personal information including contact info, shopping habits, and visit frequency to name a few.  I know that’s why I gave them access to my data.

One might remind me that many organizations publish different online and in-store pricing. The difference from those practices and what Target has done here all lies in the bait-and-switch nature of this experience. They show you a product within the app, display the price, and show you exactly where to find that product within your chosen store.  Upon arrival, they change a key factor in your purchase decision: price.

This situation even more heartbreaking for Target lovers, since they have a very public and easy-to-understand price guarantee. Target boasts this guarantee, yet they’ve riddled their customer experience with a major “gotchya!” It’s not only trust-crushing, but it costs many loyal customers a lot of money.

A Lesson To Be Learned

Beyond the very basic principle of doing right by your customers, the Target situation is a very good reminder that customer experience leaders need to understand the downstream effects of upstream programs, algorithms, and processes. A simple algorithm within your mobile application can wreak havoc on your reputation and deteriorate customer trust. In the words of our local Kare11 News report, the ‘Target Effect’ is real. You’re probably a victim of it. This is a tragedy of what otherwise enhanced the overall Target customer experience.

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