Taming Big Data in Order to Understand Your Customer

[ad_1]

How a company markets, interacts and consequently sells to a customer is changing. Driving this are two main concepts:

· The rise of SMAC (Social, Mobile, Analytics, and Cloud) technology.

· The cost per terabyte (tb) of storage has plummeted, technology is more robust, broadband faster and security tighter, leading to better technical platforms capable of processing large amounts of data in faster timeframes.

Unfortunately, the ability to capture and store data has led to masses of data becoming available for analysis by a company. This has led to the phenomenon called Big Data.

What is SMAC?

Social media, mobile technology, analytics and cloud technology work in synergy to produce a platform from which data can be collected about a customer's interactions with a company. Those businesses that can get the four components of SMAC working together, obtain a massive competitive advantage and the ability to analyze and understand their customer.

What is Big Data?

It can not have escaped your notice that researching, interacting and purchasing on mobile devices, particularly tablets and mobile phones has greatly increased in recent years. The Guardian reported that in 2014, for the first time, shopping from mobile devices had overtaken that from the desktop. Social media is of course, everywhere. Combine this structured and unstructured data from a company's website, mobile site, social media, loyalty cards, phone systems, catalog purchases and brick based sales and you have a mass of data.

So what is Big Data? There are numerous definitions in use but most use the terms colloquially called "the 3 Vs" – Volume, Variety, and Velocity. When you have a large volume of multitudes of different types of data, arriving, moving and leaving at a high velocity you have Big Data.

When we say Big Data we mean BIG! Until very recently this data was so large and so unstructured that current technology could not measure it. NASA in 1997, first coined the term, indicating that it was then impossible to be stored on a hard drive. In 2011, McKinsey defined Big Data as: "datasets which size is beyond the ability of typical database software tools to capture, store, manage, and analyze," Imagine then, how difficult it has been to analyze this volume of data? That is until Omnichannel software arrived.

Omnichannel Software

Omni means all or universal and Omnichannel means that a user's experience is the same across all methods that a customer connects with a company. So whether it is phone line, tablet, website or store, a customer will have a consistent buying experience. Omnichannel software enables this process by analyzing the Big Data emanating from these receivers, or in marketing talk, touchpoints.

Until very recently this software was not sophisticated enough to make a significant difference to either the way marketing was undertaken or the retail landscape. Now, in 2015 major retailers are starting to gain competitive advantage using Omnichannel software. As the market matures, it is expected that these retail users will collaborate and data become even larger but more useful in refining marketing micro trends. The results would be a better experience for the customer and more profits for the company.

Customer Behavior Demanding Changes

When looking for a new TV, a holiday, a meal out or new book to read, one of the first things that many potential buyers do is research on the internet, finding out what is available and what others have said about each product. Once the choice of purchase has been narrowed down, a potential customer will then seek the best place to purchase this item. The choice of retail outlet will be determined by looking at a number of criteria: price and convenience being the usual key ones. However others may look at quality of service, support, what others have said about the retail establishment, delivery times and costs as well as the popularity of the shop or web site. The customer currently has the power of choice and retail companies are scrambling to satisfy this choice.

The One to One (1: 1) Marketing Advantage

In their 1994 book, The One to One Future , Don Peppers and Martha Rogers first coined the phrase "One to One Marketing". Sometimes expressed as 1: 1 Marketing; it has been adopted to signify a personalized relationship with a customer. This highly customized interaction between retailer and customer is intended to foster customer loyalty leading to better customer retention and better returns on marketing investment.

Whilst this may be a reliably new marketing term, the concept is centuries old. In our grandparent's day, the local shopkeeper knew almost too much about their customer. They knew what meat and bread they preferred, when they liked to shop and what their weekly budget would be. In the intervening years, the rise of supermarkets, shopping malls and department stores has depersonalized the shopping experience for the shopper. Many retailers have even removed service so much that we are expected to self-serve on supermarket checkouts. Families can undertake their weekly or monthly shop without ever talking to sales staff member, sometimes without seeing such a person!

The shopper fought back when web sites started to proliferate. Website giants such as Amazon and eBay became so omnipresent because they realized that offering suggestions, treating the customer with respect, making the buying process simple and trouble free, and having feedback on their sites. It could be said that social media sites also bought back the gossip element that was so prevalent in grandmother's corner shop, but that is for another study.

The last few years have seen shoppers become much more comfortable buying over the internet. Amazon's innovations have been copied multiple times and people now expect recommendations, feedback and a wide choice of products during their internet shopping experience. Unfortunately they did not find this level of personalized services when shopping over the telephone, by catalog or even in a shop.

The brick based retailer began to feel the effects of losing out to web site retailers. Those retailers that had both brick and click retail outlets struggled to find a method of combining the two approaches, taking the best of both and being able to improve their customer's retail experience with them. Happier customers leads to more repeat business which means less marketing spend per sale, better customer retention and an increased turnover.

It was time for the retailer to make substantial changes in how they interacted with their customers and potential customers. Unfortunately they would have to plow through a mass of Big Data to find individual customer data or data trends to achieve this. Big Data would need to be corralled, sorted and understood. In other words – tamed.

Taming Big Data

The rise of better Customer Relationship Management (CRM) processes and software, particularly Multichannel and is successor, Omnichannel systems has begun to make 1: 1 Marketing a reality. The technical infrastructure such as hardware and networks have become more secure, capable of holding more data and faster in operation. The taming of Big Data is still the greatest challenge, but Omnichannel software is maturing all of the time. This is probably one of the greatest changes to retail marketing ever seen.

References:

The Guardian : http://www.theguardian.com/business/2014/sep/02/online-shopping-mobiles-overtakes-desktop

McKinsey: http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation

[ad_2]