· So what is Big Data?
· How is it used?
· What can SME’s do?
· How can Urban Economics help?
I run a jaded eye over the latest email from Coles Flybuys, and there presented for me are a series of fantastic looking specials at my local Coles Toowong. Curiously, these items seem somewhat familiar. I look a little closer, and yes every item on that list of specials was something that I had bought at my last shop in store. Cottee’s Cordial - son’s favourite drink – Check! Mars Bars and chocolate buttons to make my specialty Mars Bar Slice – Check! All magically on special and emailed directly to me. Big Data at work.
A study in the US estimated that retailers applying the information sourced through Big Data analytics would improve operating margins (McKinsey) by some 60% whilst PWC estimated that in Australia, there would be some $1.3billion in savings for business investment when derived through data driven promotion decisions. With headlines like “every company needs a big data strategy to avoid falling behind” and “Big data ‘vital’ to UK economy” reflecting the push for more informed decision making, it is not surprising that the demand for big data analysts is projected to grow exponentially – another 69,000 in the UK by 2017 alone, and that there are a myriad of specialist programs aimed at assisting businesses mine and interpret their data.
So what is Big Data and is it really a Big Deal?
Big Data is essentially the term applied to the use of technology in extracting insights and information from the wealth of data that businesses have at their disposal in informing business decisions. This can include internal sources such as client invoices and customer accounts, employee records, website analytics, business traffic counts eg. at a shopping centre etc, as well as external data sources that can be overlaid to sift through critical pieces and insights such as ABS data, social media information, financial markets etc.
Probably some of the easiest observed outcomes of Big Data at work at this point in time are those inspired emails that are really targeted at individual needs and aspirations, and more importantly their shopping habits and patterns. And we as consumers are generally ok with companies having this level of access to our purchase patterns, where I shop, what I buy, how often, as long as we feel that we are somehow being rewarded for this or getting some sort of return. Loyalty programs are central to this access to customer patterns and preferences for retailers, service businesses alike.
Analysis of internal and external information is vital for all businesses big and small!
Big Data analytics might be all well and good for large organisations and government departments with the resources, the extensive customer databases, the deep pockets to invest in the technologies, and such opportunities may seem beyond the possibilities of small to medium businesses. The reality is that we all, to varying degrees, utilise data to inform decision processes, including both internal and external data sources, and it is the advent of technology with the capacity to drill further into the wealth and breadth of consumer and business data that is changing the face of business decision processes and communication strategies. Data application itself is not new in influencing competitive strategies and decision processes, rather it is the detailed analysis and application of numerous extensive data sets that is rapidly changing and for which businesses really need to be engaging to maintain competitiveness.
For small to medium businesses exploring their competitive advantages, I think the key really needs to get back to a focus on information and gathering insights from both your internal and external sources. Understanding what you already know is critical. Start a conversation with yourself and explore your own customer data, what trends are evident, who are they, where are they, how have they changed? What do you already know and build on that. Consider a short form survey of your existing client base to fill in some of the gaps, add a splash of ABS data and watch out world!
Knowledge as they say is power, and with that in mind, I do have a dinner party to prepare for, Mars Bar slice on the menu, I better go shopping and I know just where to go to get a great deal!
I’d be happy to discuss how to inform and add value to your business decisions through research, insights and analysis. Let us take the Big Data out of the equation and put information, insights and recommendations back in.
(07) 3839 1400