By Thu Le, Marketing Analyst, SparkCognition Inc
Companies that know how to leverage Big Data gain a competitive advantage.
Companies focus on data that can be monetized, mainly consumer purchasing habits. Having access to this kind of information allows companies to improve their value proposition by personalizing product offerings and delivering them to you when you want them.
The story of Target figuring out a teenage girl was pregnant before her father did has become a classic among retailers. Target was sending the young woman coupons for baby clothes and cribs a few months before she was due, while her father had no idea about his daughter’s pregnancy. Based on the daughter’s updated spending and browsing behaviors, Target understood she was algorithmically more likely to be a pregnant shopper.
However, there are only so many things retailers can do until a consumer moves on to his or her next major life event – getting married, buying a new house, or getting pregnant. That’s when the customer’s usual routine breaks, and retailers need to adjust. To account for this, retailers have statisticians like Andrew Pole, who created what he called a ‘pregnancy-prediction model’ for Target. This model was built from an existing database associated with their customer ID numbers, which included their historical transactions through credit cards, coupons used, opt-in survey responses, emails, demographics, and various other types of data. Using these data, the system can then predict which females are most likely to be pregnant, and Target can then strategically place ads and offerings for an array of maternity products.
Airbnb, one of the fastest growing players in the travel industry, has been using Big Data from its early days to get ahead. In fact, Airbnb is known for applying data to every decision possible.
To develop and improve its search algorithm to help guests find their best match, Airbnb uses Big Data to understand their customers as a whole, and individually. The company looks at how customers interact with their website, types of devices used, languages, locations, reviews, as well as their sentiments, which include past ratings, reviews, lodging, and even the cities that a customer visited.
Furthermore, Airbnb was able to use different sources of data other than its own to help both their customers and also their hosts – those who they rely on to keep the service stable. The company introduced a feature that suggests prices for hosts to choose from based on what’s coming up in town, and how likely it is for them to get a booking at that chosen price.
Having data is one thing. Having the right tools and methods to handle it is another. Big Data tools need to be scalable. A few common Big Data technologies that are used to crunch data are Hadoop, Hive, and Spark. Analytics can also be run on the public cloud, instead of having to own and maintain an infrastructure. Big Data technologies are rapidly growing along with the demand for them.
For a long time, companies have retained a fluid amount of data streams that go untapped. With Artificial Intelligence, machine learning, predictive analytics, and Big Data technology advancements, companies can now put these data into use – not only to increase profits, but also to improve processes, and in turn, benefit their customers.