Here is my typical order process in 2017. What can you find from it? Could you still call yourself a “black swan” and say your shopping habits are 100% different from mine?
I believe you can’t. You may already be aware that big data has put a huge influence on our decision-making and we are living in a world where everything becomes data: searching history, words, locations, our interactions with each other,etc. According to Eric Siegel’s estimate, we are adding 2.5 quintillion bytes of data every single day. This infographic just gives us a clearer idea of the world we are living in:
Big data has four different features called “4V” which are volume, variety, velocity and veracity. According to Mr.Jensen from ESTEE LAUDER companies(guest speaker of my Statistical Analytics class at NYU), 49% of companies rely on big data to discover consumer insights while 39% of them use it in budgeting and planning.
Before coming to the Pros and Cons of big data, I’d like to talk about Capital One, a fortune 200 credit card company first. As a resident of a luxury building in midtown,I become Capital One’s target costumer and I’ll receive mails from them nearly twice a month with my name on the envelope asking me to open an account. But I’m already a user of Bank of America so I’ll not change due to the conversion cost. What Capital One does is really disturbing but is how it succeed as a “born analytical” company which wholly invested in the data-crunching capabilities since 1988. Does it a smart strategy to only focus on short-term promotions and neglect the investment on brand equity? Will CEO of the Capital One satisfied with the reality that the only attribute this brand overwhelmingly owned is, “They send me lots of mail”?
Just as Peter Horst and Robert Duboff mentioned in their HBR article,”Don’t Let Big Data Bury Your Brand”, company needs to achieve just the right balance between short-term revenue pursuit and long-term brand building. Although it is not easy to resist the pressure to go all-in on data-driven promotions and use insights from data to make the long-term case for brand investments, it allows a business to sustain the healthy margins and keep fulfilling its brand promise in the long run.
Here is a chart I made to illustrate the Pros and Cons of big data analytics: