The New York Times published a very enlightening article this week called "How Companies Learn your Secrets". While I've encapsulated the gist of it below, I encourage you to read it in its entirety, as it's pretty darn scary to hear the lengths that retailers will go - Target, in particular - to learn your buying habits.
For decades, Target has collected vast amounts of data on every person who regularly walks into one of its stores. Whenever possible, Target assigns each shopper a unique code — known internally as the Guest ID number — that keeps tabs on everything they buy. “If you use a credit card or a coupon, or ﬁll out a survey, or mail in a refund, or call the customer help line, or open an e-mail we’ve sent you or visit our Web site, we’ll record it and link it to your Guest ID,” says Andrew Pole, statistician for Target. “We want to know everything we can.”
Also linked to your Guest ID is demographic information like your age, whether you are married and have kids, which part of town you live in, how long it takes you to drive to the store, your estimated salary, whether you’ve moved recently, what credit cards you carry in your wallet and what Web sites you visit. Target can buy data about your ethnicity, job history, the magazines you read, if you’ve ever declared bankruptcy or got divorced, the year you bought (or lost) your house, where you went to college, what kinds of topics you talk about online, whether you prefer certain brands of coffee, paper towels, cereal or applesauce, your political leanings, reading habits, charitable giving and the number of cars you own. All that information is meaningless, however, without someone to analyze and make sense of it. That’s where Andrew Pole and the dozens of other members of Target’s Guest Marketing Analytics department come in.
You can read the rest of the 9-page article here.