Technology , Innovation, the Future
23rd October 2018•Uncategorized
Using data to uncover trends
Unless you have been hibernating over the last couple of years you will have seen and heard the “D” word, or even “Big D” being branded about. Even in investment and VC circles it is also a hot topic as investors are actively looking for data based business, predicting that data is the new gold.
You may be saying that it is an overhyped phenomenon but in my view you would be very wrong in your thinking. I would like to take the next 5 minutes to explain why data is extremely powerful and why you should be taking it seriously.
Why is data so powerful? Well the great part about data is that it can inform you to make better decisions regardless of your business. Why use your gut instinct when you can use the actual data instead!
One of my favourite films of all time is The Big Short. The Big Short is a true story about how a group of individuals analysed that the United States housing market was extremely unstable due to it being based on high-risk subprime loans. It wasn’t rocket science – they just did the numbers and research, establishing that the entire market was highly unstable and the numbers in fact just didn’t add up. Needless to say everyone thought they were absolute idiots but they stuck to the figures and bet against market i.e. they bet on the market collapsing. Everyone knows the ending (8+ years later) and many of us a still paying the price in some shape or another. This is a great example of the power of data.
Another one of my favorite data stories crosses the pond to a family butchers located in North West London. The butchers was established in 1996 and had a good customer base however after a supermarket moved in opposite they noticed a big drop in footfall and subsequently a big drop in revenue. They knew they had quality on their side but found it impossible to compete with the multinational supermarket therefore they had to think smarter. They sought advice which prompted them to put inexpensive sensors in the shop window to measure the amount of people walking past the shop, how many people stopped to look at the window display and how many people came into the shop as a result. Armed with this information, they were able to refine their messaging and shop displays based on what interested customers the most. That’s not the best part. One thing that the sensors also picked up was that there was a real increase in footfall at night, due to a couple of pubs located at the top of the road, which pointed to a potentially new revenue stream for the business between the hours of 21:00 to midnight. The butchers therefore decided to trial evening opening hours, serving premium hot dogs and burgers to folk heading home from the pub. The butchers also used Google Trends to see which food items were particularly popular. This led to the creation of their pulled pork burger with chorizo. Now that is a good example of thinking outside the box and a great example of a small company using “Big Data”.
These are 2 examples of how the details are in the data and how you can use data to provide you with information that you otherwise maybe missing.
Right let’s move on to the 3rd example. See if you can answer the following question.
It is called the “Lipstick effect” and is a theory that when facing economic crises consumers will be more willing to buy less costly luxury goods. Lipstick was also used in the holocaust by the British Red Cross in order to allow the women internees to feel individual again and was deemed utter brilliance.
I hope the above has provided you with food for thought and has got you thinking about how data could benefit you or your business.
Questions you should be asking yourself.
And above all look at data as an asset!
Jerry Staple is the Technical Director of Origin Digital.
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