BrainTrust Query: The New Big Data Mandate – Consider the Source

Discussion
Dec 12, 2012

Through a special arrangement, presented here for discussion is a summary of a current article from the newmarketbuilders blog. The article first appeared on the Licensing Industry Merchandisers’ Association (LIMA) blog.

In a recently penned article for Bloomberg Businessweek entitled "The Case against Digital Sprawl," David Turek, head of supercomputer development at IBM, argues that companies need to get ahead of the extreme data density being driven by socially networked customers, tweeting employees, YouTube-loving marketers, and what he called "an Internet of data-savvy and data-spewing objects."

The "Big Data" phenomenon also begs for new collaborative approaches between retailers and brand partners. Big Data enables retailers to evolve from the transaction-based POS-world approach of looking at what people have already bought, and into understanding intentions, interests, and connections — dynamics that are a much better predictor of what people will actually buy in the future.

Up to this point, most of the conversation regarding Big Data has centered on management and utilization opportunities, in terms of what to do with information once it arrives. The next challenge: the growing scrutiny surrounding how the data is obtained in the first place.

Privacy issues are nothing new in retail as concerns regarding credit card transaction data, smart phone-enabled geo-location tracking and other sources of personal information loom large with consumers. Now, stealthier data tracking methods promise to elevate perceived threat levels even as those methods bring game-changing results to brand marketers. With software able to determine a user’s browsing habits, website and mobile marketers can target "behavioral ads" designed with people’s habits in mind. In some cases, electronic tags can predict if a consumer is price-sensitive. As various social platforms such as Facebook and browser platforms such as Google become more proficient at combining insights into users’ viewing, browsing, purchasing, sharing and movement habits, the "single view of the customer" so desired by marketers may soon look like a highly-intrusive X-ray.

Public awareness and resistance is growing, even as negotiations over "do not track" (DNT) legislation are at a standstill in Washington. In February of this year, all the major web browsers promised to offer a DNT feature, and the Digital Advertising Alliance, a coalition of advertising trade groups, promised to stop displaying targeted ads to users who selected the feature by year-end.

Microsoft was given kudos in June when it announced that it would make DNT the default seting on its newest version of Internet Explorer. These self-regulating steps were undermined last month when the Digital Advertising Alliance advised its members to ignore DNT signals from Internet Explorer users, arguing that DNT requests don’t necessarily reflect the user’s intent if they are set by default. Advertisers have further complicated matters by insisting on exceptions to DNT policies for market research, product development, system management, and other self-defined purposes.

All of these developments mean that realizing the opportunities presented by Big Data involve big controversy.

What should retailers and brands do to get ahead of any concerns and backlash over the potential marketing use of Big Data? What retailer/supplier collaboration will particularly help?

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13 Comments on "BrainTrust Query: The New Big Data Mandate – Consider the Source"


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Doug Stephens
Guest
Doug Stephens
9 years 5 months ago
One recent survey indicated that while the majority of companies have some plans for Big Data projects on the books for next year, a minority of retail executives even understand what big data is much less its implications. The place to start is for executives to have the courage to raise their hands and say, “I don’t understand.” Until executives understand all the nascent sources of both structured and unstructured data and how it can come together to create a cogent map for decision making, any money spent is a total waste! Once leadership gets their heads around WHAT big data is there has to be an organizational philosophy established around HOW these troves of data are going to be deployed. There is a huge propensity here to view big data as yet another slick mousetrap to ensnare consumers with. Big mistake. The smartest companies will capture, collate and curate consumer data with the intention of sharing back to consumers to help them make better and more effective decisions about what they buy. SHAMELESS PLUG:… Read more »
Adrian Weidmann
Guest
9 years 5 months ago

Rather than simply collecting vast amounts of data (which is the easy part) that can definitely become an ‘intrusive x-ray’ of your customer, retailers, and brands alike, need to extract insights from this mountain of data and activate responses that provide meaningful, relevant and valued goods and services for their customers.

If customers are receiving exceptional service and enhanced shopping that will ‘surprise and delight’ your shopper then they will be more receptive to the data collection. This needs to be done from a genuine interest in the customers point of reference and not just another thinly veiled attempt of brands and retailers to press their agenda in front of an unwilling shopper.

Max Goldberg
Guest
9 years 5 months ago

Transparency and benefits. Retailers and brands need to be transparent about what data they collect and how that data will be used. They also need to demonstrate to consumers the benefits of gathering that data. Those benefits should be ways that make a consumer’s life better: time savings, cash savings or pleasant discoveries of new products that make the consumer feel better about herself.

Without transparency and benefits, gatherers and users of big data seem too much like Big Brother from Orwell’s 1984.

Ian Percy
Guest
9 years 5 months ago
You’re making me think this morning Carol and it’s way too early for that. Getting ahead of Big Data (we capitalize it now because it’s approaching deity) is like advising someone to “get ahead” of a runaway truck. I suggest “stand aside.” That doesn’t mean ‘don’t pay attention’, it means don’t get so caught up in something driven by the motive “because we can.” What the technologists and marketers are doing is opening the cocoon in the hope of knowing what colors the butterfly will like. A couple of random thoughts… First, all data is historical. Focus too much on data and you stay stuck in your own past. Think of it: what market “data” led to the automobile, electricity, the telephone or human flight? Or the iPad? It’s a little known medical fact that statisticians don’t dream. Second, the rarest retail leadership factor right now is ‘wisdom’. I think there are three levels of wisdom: Operational, Responsive and Intuitive. It’s the later one we are desperate for, but haven’t a clue how to get.… Read more »
Roger Saunders
Guest
9 years 5 months ago
Two essentials to keep in mind: 1. Make certain that all parties understand that they are seeking “Insights” that lead to better decision-making. Data is free and plentiful. It has to be molded to useful insights. 2. Institutionalize “Privacy” practices at all stages. This is going to be one of the most pressing issues, as increasing consumer demand and government regulation will push this point. Retailer/Supplier collaboration can be enhanced by making sure the most effective Insight Centers are built and established. Those Insight Centers should have: A. An Integrated Data Solution Platform – Be able to handle multiple sources of data, as the end user does not have time to jump back and forth to different and growing databases B. Real Time data and Trends are needed – the best decisions will come from seeing past, present, and future patterns C. Applications on Web and Mobile Devices – the tools that retailers and suppliers are using are varied. Have the applications that fit their needs D. User friendly Insight Centers are best – remember… Read more »
Cathy Hotka
Guest
9 years 5 months ago

There’s a meme going around the Internet which shows an angry Samuel L. Jackson from Pulp Fiction, holding a sawed-off shotgun, with the wording “Mention Big Data One More Time.”

Our obsession with this is temporary. We’re wallowing in data because storage is so inexpensive now. But until retailers can establish meaningful ways to measure and use this data, it remains largely a promise, not a reality.

Nikki Baird
Guest
Nikki Baird
9 years 5 months ago
The more I think about this, the more I think the challenge lies around the relationship between the data and the source of the data. If data is collected from individuals and analyzed in aggregate, so that aggregate insights can be then turned around and executed at the individual level, I think most people will be okay with that—it’s not privacy, but it is anonymity. And it feels like privacy is preserved. Where it gets distressing is when advertisers want to use individual insights to market at an individual level—a specialized case of one-to-one marketing, I guess. Now there is no privacy or anonymity—and that’s where people get up in arms. The question that marketers have to figure out is, is this apparent “goldmine” of individual data, and the value of marketing at an individual level based on this data, worth the risk of scaring/annoying/angering people enough that they take steps to prevent marketers from using this data? It sounds like we’re already headed towards a tragedy of the commons, where a few marketers behaving… Read more »
Ed Dunn
Guest
9 years 5 months ago

What David Turek stated sounds more like predictive analysis and forecasting, not mining Big Data.

Predictive analysis uses real-time data to make real-time decision making. For example, the live weather data is predicting 80% rain so move the umbrellas to the front of the store. This data is usually created and destroyed in real-time.

Big Data is the massive collection of data points that is meant to be mined later. This is what I believe David Turek is saying we should move away from—mining large datasets of historical data.

Retailers should understand what drives their business and their customers and find all available data points to center their data strategy around, not amass terrabytes of “Big Data” collections.

For example, a grocery store should know the shelf life of a product and know when someone who prefers that product is nearby (geolocation), use that data to send a personalized discount offer and destroy the data as it is no longer needed, except to determine if the offer was accepted or not.

Lee Kent
Guest
9 years 5 months ago
I have always loved data! Call me a geek, others do, but I just love digging into data to see if I can find out things I didn’t already know. Going back to my early days of having a web site, I couldn’t wait to log into Google analytics to see who was coming to my site; where they were coming from; what pages they went to; what order; what actions; etc., but what then? This is where wisdom and intuition come in. Now i must assess my traffic to determine if they are who I think my customer is and what they want from me. Am I doing it right? With the mountains of data retailers have at their disposal these days, it is now up to them to use that data to see what story it is telling them about their customer and what their customer wants from them. This is about delivering the brand and not so much about marketing. This goes to Nikki’s thoughts about aggregated data as opposed to individual… Read more »
Gordon Arnold
Guest
9 years 5 months ago
Once again the discussions of security and data management have been revised to disguise the real culprits in this dilemma. Over the past 50 years of IT evolution, little if nothing has “fundamentally” changed in the design of basic data structure, software operating systems and hardware “component” designs. In short, everything is the same just bigger in scope, smaller in real estate and, sadly, more convoluted. The addition of redundancy within data collection due almost entirely to the existence of thousands of different proprietary data files without consideration for enterprise time management and security is a huge part of the problem. The IT overlords’ refusal to expand beyond government the use of “IP 6” at a time when we should be staging “IP 8” is another stumbling block for advanced data management and security capabilities. And they get away with this simply because our captains of industry have less than an advanced user understanding of how IT systems work. In short the problem is that the enterprise management systems (super computers) and their operating systems… Read more »
Verlin Youd
Guest
9 years 5 months ago

In the end I think this is likely to come back to the axiom, “The Customer is Always Right” and individual participation in non-anonymous big data is likely going to involve “opt-in” or “opt-out.”

Chandan Agarwala
Guest
Chandan Agarwala
9 years 5 months ago

Consumers need to see value in the tracking. They may endorse behavioral ads that help them to make informed choices, or get customized promotions. They can even like to trust the owner of relationship, be it the retailer, or financial services provider, or social network owner. In this case, they will allow the relationship owner to track them and use insights about them. For example, visitors to Amazon will be happy to be tracked, as long as they receive suggestions about relevant material. Visitors to the web portal of suppliers or manufacturers may like to be tracked by the owner of the medium, too.

Tom Cook
Guest
Tom Cook
9 years 4 months ago

It’s quite funny to me how worked up people get about some business or another having access to data about their spending habits. “Oh no! Walmart knows what I like! They might be able to use that information to… bring stuff I like to my attention… er… there should be a law!”

The thing that concerns me is not that some business is going to have the ability to target their advertising at me with pinpoint accuracy, thus hijacking my will and self-determination and ‘forcing’ me to buy their products (a completely ludicrous idea); it’s rather that this mountain of data will fall into the hands of people who can put me on a list and/or actually send armed men to force me to do stuff I otherwise would prefer not to do. That’s more of a society problem than a business problem, and it’s a shame more people don’t take their reasoning on this to that next level.

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