Big Data in Marketing
After reading “Mobile technology trend” blog, a student wrote to me: “Can you explain how the computer store knows you and sends text message to your phone? I am very interested in this technology and want to know how it works.”
Answer: The technology uses signal from customer’s mobile phone to offer special deals is widely used today in many retail stores and it is relatively simple. The store’s information system tracks the signal of a smartphone in the store so it knows where the customers are. By combining that with the store’s video camera, it can located customer position accurately. With special analytic software, it can analyze customer’s behavior by measure how long a customer spends in front of an aisle that displays merchandises so it knows what the customer is interested in. By having the phone number stored in a database, the system also knows how often a customer visits their store. If the customer has brought many things before, it automatically ranks the customer as a “potential buyer” who may buy more so it automatically sends a text message to offer “special discount” to encourage customer to buy. When you carry a mobile phone or tablet into a store, and when you buy thing from a store, all data is collected for further analysis.
Collect everything about customers and combines that with data from the internet such as social media, search items, location and financial data etc. and use it for specific purpose then you are in the domain of Big Data. It is the analysis of all data that gives companies the “insights” they need to market to potential customers and improve their business. The ability to collect vast amounts of data on customer such as their buying habits, their preferences, and their interactions with the company and analyze those data for predictive behavior is the benefit of Big Data. The actively use those information to promote sales to customers in the store is the basis of new competitive advantage that companies have over competitors.
The marketing goal is to promote sales to potential customers. In the past companies advertised by offering special discount randomly to anybody on newspapers and magazine but it is not as effective as knowing exactly who are interested in certain thing and offer special deal to them. By approach customers at the individual level, knowing what they want to buy and offer exactly that, you reach the next level of “effective marketing”. Data from industry already shows that 85% of customer would take the offer since they think that they receive a special deal that no one have. The use of Big Data in marketing had increased sales 67% as compare with previous year, before they use Big Data. Of course with those kind of increasing profits, every store wants to have a Big Data system to market like that and the need for more IT skilled workers in Big Data is “Hot”.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
