Although underlying demographics are driving many of the current trends, in 2013-14 we will see a hastening of the shift from a focus on customer demographics – age, sex, postcode – to a focus on exploring customer psychographics: What are their attitudes, beliefs and values.
What is making this possible? Big Data is.
In 2011 McKinsey & Co reported that as the amount of data in our world has been exploding, “Analyzing large data sets—so-called big data—will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus” and they were right.
So what is Big Data?
Big Data is the making sense of and mining of huge tranches of data we are generating – everything from the cookie placed on our computer to see what websites you are browsing to the uploading and tagging of photos on facebook – status updates, to the enormous amount of data credit card companies have access to of shopping and transaction habits.
And it is everywhere.
In Australia the two companies that are perhaps making the greatest use of Big Data are the retail behemoths, Coles and Woolworths via their FlyBuys and Everyday Rewards customer loyalty cards. By tracking the millions of retail transactions of their shoppers across the country every day they are able to both improve shopper experience by better understanding shopper habits and wants and to maximise their revenue by deleting unprofitable lines or adding complimentary, in-demand lines.
It has only been with the advancement of computational power that these vast troves of data riches have been able to be mined effectively.
This is the year we will see this trend really take hold as the implications of failing to adequately make use of all a company’s information becomes clear. No longer will the implications of big data be something that is grappled by a few data-oriented managers dotted throughout the organization. Leaders of organizations in all sectors will have to familiarize themselves with the implications – and opportunities – that lie within the vast amounts of stored information.
The increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the Internet of Things – the connectivity of devices to the internet and communication between them – will fuel exponential growth in data for the foreseeable future.
All this data gives rise to a number of questions:
- How do you make sense of all the data you have?
- How much effort and resources do you apply to make sure you can use this data effectively?
- How do I take action on the insights that I have gathered from the data?
If you would like help understanding this or any other current trend, do contact us today.
“The information that is now at our disposal is just waiting for the analytical work to be done on it.”
“The real challenge for most companies is to find a way to fund that work, because that’s where you’ll get the true breakthrough ideas.”
- Rich Strader, CIO Volvo Corporation