Potential for businesses

The first major application area for big data analytics was selling products and services to consumers. Businesses have been collecting huge amounts of customer data to analyse how they can deliver better products and services to their customers.

Data from digital interactions

From the early 2000s, consumers turned more often to the web for shopping. This presented opportunities for businesses to learn more about their customers than ever before. Customers have been:

• searching for products online
• comparing different models on websites
• signing up with their address details before making purchases.

All these details are recorded. With each digital interaction, or digital touchpoint, comes the opportunity to gather more customer data. As you can imagine, over time, businesses have amassed large amounts of personal information and preferences.

Personalisation and improvements

There are two general ways businesses use this data.

Individual level

They consider in-depth the data of each customer. This enables them to deliver personalised products, services, and advertising. Interactions are targeted to the preferences and habits of the customer.

Collective level

Businesses also consider data from many customers to find commonalities. They determine similarities among customers to help improve the business operations or motivate a new product or service.

The cost is privacy

So, where does this leave us as consumers? Obviously, we benefit from personalisation and new products and services. However, there’s no such thing as a free lunch. We are paying for these improvements with our privacy.

Businesses often provide free services in exchange for our personal information. We register on their site with our home address and credit card details. We share our list of friends. We disclose our preferences for food, travel, and sport. We even train their algorithms by tagging our family members in photos, and letting them know whether a page answered our questions.

A data-driven economy

All this has given rise to a new economy, driven by our data as the commodity. Indeed, the majority of the most valuable public companies nowadays are all data-driven technology companies: Apple, Microsoft, Amazon, Alphabet, Facebook, Alibaba, and Tencent.¹ When so much of our data is being used and traded, we as consumers should have some influence in the market. In the next step we will explain how the government is helping to achieve this.

Your task

Watch the video by Dr Timo Dietrich, to learn how data collected from digital touchpoints can help car manufacturers deliver more personalised products, and how Tesla uses data collected from its consumers to improve its car maintenance operations.

Have you heard of any other examples where big data is improving business operations?

Share your thoughts in the comments.

References

Video references

• Stoffel M. From clicks to sales: How auto leads move through the digital car sales funnel [Internet]. 2017 [updated 2019 Jan 14; cited 2018 Nov 7]. Available from: https://9clouds.com/blog/from-clicks-to-sales-how-auto-leads-move-through-digital-car-sales-funnel/
• Ramaswamy S. Micro-moments are multiplying—Are you ready for the future of marketing? [Internet]. Think with Google. 2017 May [cited 2018 Nov 7]. Available from: https://www.thinkwithgoogle.com/intl/en-aunz/advertising-channels/emerging-technology/future-of-marketing-machine-learning-micro-moments/
• Marr B. The amazing ways Tesla is using artificial intelligence and big data [Internet]. Forbes Media; 2018 Jan 8 [cited 2018 Nov 7]. Available from: https://www.forbes.com/sites/bernardmarr/2018/01/08/the-amazing-ways-tesla-is-using-artificial-intelligence-and-big-data/

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