Big data is a generic term referring to a large volume of data — both structured and unstructured — that runs through a business on a routine basis. While the concept of Big Data is not new, the demands of an increasingly competitive market make data a critical asset for any organisation. The focus has shifted from the quantity of data to how the data is used to create a predictive model.
Analysing data to create a customer profile and behaviour pattern is just one area that can give companies a competitive advantage. Other benefits Big Data has introduced include cost saving and reductions in the time it takes to conduct research and product development. Cost efficiencies arise because processors and data storage are affordable for organisations, enabling them to analyse data in a timely manner while identifying new business strategies. New tools and in-memory analytics can help businesses to better understand existing market conditions and take quicker, more effective decisions.
Organisations can also benefit from Big Data through deeper insights on customers and products, improve engagement and create new data-driven strategies. Only a few years ago, when people visited shops and purchased products, the store would only know limited information about their customers, such as how much of a particular product was sold over an entire month rather than specific information about demand from individual customers.
With the introduction of store loyalty cards and online shopping, companies are able to not only collect data on a vast scale, but also analyse it to understand the behaviour of consumers (such as purchase frequency, preferences and location) as well as their shopping habits and demographics. This business intelligence enables them to create persona profiles, with the aim to encourage repeat spending and customer retention.
Another sector that is benefited from Big Data is healthcare. One example is a specialist premature and sick baby unit, where Big Data has been used to analyse babies heartbeats and breathing patterns to develop an algorithm that predicts infections 24 hours before they can potentially occur.
In addition to collecting their own data, companies can analyse information coming from publicly accessible databases. For example, one company researching poverty patterns in Bangladesh, used to collect information every five years by going door to door. However, by accessing open databases, they found a correlation between poverty and the nighttime lighting hours (i.e. the amount of time night lights were kept on). Based on this data the company went on to build a predictive model to analyse lighting information to understand poverty trends in specific geographical areas.
To make the best use of Big Data, companies should review their business plans and ask themselves what data they already have, and how they can make new strategic business choices based on the validity of that existing data. As long as Big Data implementation is approached and integrated in the right way, businesses will be able to gain business intelligence, identify growth areas and new opportunities, enhance productivity, gain higher customer engagement, increase efficiency and ultimately gain a competitive edge.
Stay tuned for the next Big Data article where we will look into how Netflix put these concepts into practice.
Ilaria Bommarito, Marketing Executive based at K2 Partnering Solutions HQ in London.