Big Data.....Big Deal or Big Opportunity?

·       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. 

Kerri Bonwick-Meulman

(07) 3839 1400

Kerrianne@urbaneconomics.com.au

www.urbaneconomics.com.au

New Economy?

The ABS's Report on business entries and exits provides some insights as to the evolving nature of the Australian economy and how changing technology practices are driving business sustainability. 

Old economy activities such as manufacturing, information services such as libraries and broadcasting, delivery services eg. couriers, exhibited the lowest survival rates for new businesses and are indicative of the increasing capacity for consumers and businesses to access and source these activities on-line, through social media, cloud computing etc.  Between 2003 and 2007, the lowest survival rates for businesses were in the education and communication services sectors.  Don't do it for me, do it with me - businesses servicing the information and knowledge sectors will need to be increasingly savvy around how they deliver these services. 

Here in Queensland, survival rates were highest for new gambling businesses and lowest for beverage and tobacco manufacturing businesses; moving from one fix to another? 

With the reduction in government investment and expenditure it is perhaps not surprising that for Australia overall, the lowest survival rates between 2008 and 2012 were in public administration and safety, administration and support services, and with ongoing government expenditure restraint and cost-cutting, this pattern is likely to continue to be active on the Australian business landscape, for the short term before not-for-profit organisations and private sector businesses explore new funding mechanisms and expansion of their services. 

So where are the opportunities? Business survival rates by industry sector for new business entries to the Australian market between 2007 and 2011 were highest for activities in health care, insurance, superannuation and gambling, perhaps tied to an aging demographic and the retiring of the baby boomer market.  Will our aging economy be the maintstay as investment in the resources sector slows? Changing attitudes and business practices will be key. 

Economic Impacts of Iconic Pop Culture Tourism

LIGHTS, CAMERA, WHERE IS THAT?

This month Anthony takes us on a whirlwind tour of settings and backdrops of some of our iconic movies, television and popular culture. But be warned, he gets a wee bit existential by the end.

Our tour starts in Salzburg, the setting, of course, of The Sound of Music. I was originally going to write this newsletter entirely on Salzburg, but the way we visited the city (i.e. grabbing a Sound of Music sights guidebook and running around the City trying to picture Maria and the children in those locations) got me thinking about the approaches of different locations to their iconic popular culture moment.

Salzburg is a reluctant Sound of Music celebrity. It would like to be more known for its Mozart history and its stunning architecture. It does indeed extensively promote its connection to Mozart and has a range of cultural festivals promoting classical music and the arts. The Salzburger Dom (the city’s cathedral) and Salzburg Castle are magnificent structures and worth a visit to this city on their own. The hilly topography of Salzburg (it is in Austria after all) means there are some wonderful vantage points from which to view the city. Indeed one of these vantage points was a location for Maria and the kids as they were Do-Re-Mi-ing all over the town.

Teenage crush on Liesl notwithstanding, personally I wouldn’t have detoured from my journey to see the setting of The Sound of Music, if it wasn’t for my wife being keen to do so. Salzburg is a very picturesque city and I enjoyed my time there, but I wouldn’t visit to revel in The Sound of Music experience. However, I have been known to detour hundreds of kilometres to visit Elvis’s home Graceland in Memphis and delight in the gaudy memorabilia, shag carpet ceiling and rhinestone costumes.

Memphis is a city that lives and breathes music. Its location on the Mississippi and in the heartland of the Deep South mean that its musical roots extend further back than Elvis and the advent of rock ‘n’ roll, and include blues, jazz and country. Obviously unlike with a film production, the music scene has never left Memphis (even if Elvis himself has left the building) and continues to be a hub of musical creativity and performance.

Unlike Salzburg, New Zealand enthusiastically embraces its movie notoriety. It seems the whole country has some connection to The Lord of the Rings or The Hobbit trilogies. And why wouldn’t they get behind the venture? The production alone of The Hobbit: An Unexpected Journey injected some $200 million into New Zealand’s economy, with last year’s Wellington world premiere providing a $12 million boost. And surveys after The Lord of the Rings trilogy revealed that some 7% of international visitors cited the movies as the main reason or one of the main reasons for visiting New Zealand. Air New Zealand certainly used The Hobbit’s fame cleverly, with their Middle-Earth themed in-flight safety video going viral.

Some cities feature in so much of our popular culture, particularly movies and television, that we feel we know much of the city without actually going there. Indeed, apart from flying into the airport and immediately getting a bus out, I have never been to New York, but through the myriad of television and movies set in the Big Apple, I think I have a reasonable understanding of its geography, vibe and people; from the wondrous Central Park and iconic skyline to its sharp-tongued inhabitants, sassy gal pals and dictatorial soup vendors (and its unfortunate role as a principal target for alien invasions). I have some connection and affinity with the city despite not having any personal experiences in New York.

So posing some philosophical questions now, given that so many of our heroes, leaders and dare I say it, loved ones, are completely fictional, do we travel to these settings to try and make them that much more real to us? When we arrive and see the disconnect between the fictionalised world and the actual place, is it a bit of a let-down? It would be sad if Salzburg couldn’t be enjoyed without Maria, or New Zealand without Frodo.

These places are settings for the very reason that they are beautiful or vibrant or memorable. It is not the fictional world which makes them so; indeed, it is the wonderful and diverse places in our world which enriches our fantasy.