I posted before on how Priceline uses randomization to conceal the minimum price they would be willing to accept in the Name your own price channel. Here is another example on putting randomness to work. This one is from retail.
Whether we like it or not, retailers do accumulate a wealth of data about our purchasing patterns. Every time you use a credit card, coupon, or a loyalty card, transaction data is logged and stored. The data is obviously used to send you more coupons, ads and peddle new products. Now, how much can retailers learn from this data? It turns our quite a lot. As this article from the forthcoming NY Times magazine describes, Target can actually predict whether a woman is pregnant just by analyzing change in her shopping patterns.
Pregnancy is a sensitive matter, however, so when a week after shopping a bunch of coupons for maternity clothing and baby products arrives in mail, women can get upset. It also looks awful lot like spying – does not it? Lesson #1 – one has to be very careful with this kind of data. Lesson #2 – even if data suggests something, do not necessarily pursue the opportunity at full speed. Here is what Target does: they randomize. Put a coupon for wine glasses next to diapers and office furniture next to pacifiers. Combinations seem to be quite ironic. But it does seem to work – the same article reports substantial growth in maternity and baby product sales for Target after they started doing this.