WITH BIG DATA, CUSTOMERS GET WHAT THEY REALLY WANT
Insights from massive anonymized data sets help businesses better respond to customer needs
Thanks to the rise of e-commerce, smartphones and mobile apps, the amount of data we are generating as a society is growing exponentially. When you consider emerging technologies like artificial intelligence, machine learning and the Internet of Things — all of which have the potential to change how we live and work in ways we can’t yet even imagine — we’re talking about a phenomenal amount of data.
While some businesses are drowning in all of this new information, others are harnessing it through “big data” analytics to identify trends, predict outcomes, and improve decision-making to enhance customer experiences.
Companies such as Google, LinkedIn and eBay were among the first to experiment with big data, with positive results. eBay, for example, is using big data to find patterns of behaviour among its customer base of more than 165 million active users. By analyzing billions of data points, the company is able to predict demand for its most popular items, which can sometimes be unexpected.
Last holiday season, the company was able to determine that hoverboards would be one of their best-selling items. With that information in hand, they were able to contact suppliers and manufacturers of products to alert them to the unexpectedly high demand and urge them to keep their inventories stocked; ensuring eBay customers could get their hands on the season’s most-popular gift.
Big data is also helping businesses make better-informed decisions about developing new products and services, rather than guessing what their customers will like. Everyone knows there’s no such thing as a guaranteed hit in the television business, but Netflix was willing to invest more than $100 million in House of Cards based on analyzing the viewing patterns of its tens of millions of customers — a big data bet that paid off. In fact, Netflix was so confident in the data that it bucked the convention of producing a pilot and immediately green-lit two full seasons, which became an instant success for the steaming service and went on to win numerous Emmy and Golden Globe awards.
But it’s not just tech companies that are seeing big potential in big data. In British Columbia, the Thompson Okanagan Tourism Association (TOTA) is banking on data insights to make the region an even more popular destination for travellers. By better understanding tourist trends and traffic patterns, TOTA hopes to market more effectively to potential visitors and direct resources toward the attractions that are in line with their preferences — benefiting travellers as well as boosting the local economy. “Big data allows us to better understand consumer needs, which enables us to deliver the experiences our visitors are asking for,” says, Glenn Mandziuk, president & CEO of TOTA. “This will definitely create jobs, it will create opportunities.”
As an increasing numbers of organizations look to tap into the potential of big, earning the trust of their customers becomes a crucial first step.
According to Ann Cavoukian, three-term information and privacy commissioner of Ontario, now serving as the executive director of the Privacy and Big Data Institute at Ryerson University, the benefits of big data can be outweighed by customer backlash if they feel their privacy is being compromised.
Under Cavoukian, Ryerson University has launched a certification program called Privacy by Design, an international framework for privacy and data protection that has been translated into 39 languages and is being incorporated into policies from organizations around the world. It ensures that businesses embed privacy-protective measures into their programs and services right from the outset and can give privacy-minded businesses a competitive advantage by giving their customers peace of mind that their privacy is being protected.
“There is massive potential for big data to advance Canadian businesses, but it cannot do so without respecting customers’ privacy,” she says. “Consumers don’t want to wade through a lengthy privacy policy or terms-of-service agreement to find the checkbox that says, ‘I want my privacy protected.’ Instead, they prefer to engage with organizations that provide privacy assurance right from the outset.”
Cavoukian believes that when privacy is fully embedded into big data programs, the benefits to consumers are undeniable.
“When big data is used effectively and responsibly, businesses will be able to make smarter data-driven decisions,” she says. “As a result, customers will enjoy more efficient operations, more relevant products and services, and better overall experiences: it’s a win-win.”