Prior to the What’s going on in (R)etailing event we have interviewed Viktor Mayer Schönberger, professor, Internet Governance and Regulation at the Oxford Internet Institute, University of Oxford. Viktor gives his vision on the start and impact of Big Data.
”There is no question that Big Data is not just improving efficiencies or increasing loyalty. No, it is about the bottom line.” – Viktor Mayer Schönberger, professor, Internet Governance and Regulation at the oxford Internet Institute, University of Oxford
Big Data is our ability to use a lot of data points and then gain new insights from these data points into how the world works, that we didn’t have before. And in the context of retail this is going to revolutionize how we are going to communicate with the customer and how the customer is being informed about the products out there. It’s going to revolutionize the process of retailing because we don’t put customers in buckets anymore, predefined categories. We treat them as human beings. Everyone as personal and individual.
The past two hundred years has been defined by mass production and mass retailing. You got the same product like your neighbour, but your preferences were different. In the future we will be able to not only produce the products based on individual preferences, but also bring them to the people that needs them. So we are individualizing everything from production to retailing to dissemination of the product and that means it’s not that it’s just more efficient, it also makes people happier.
Start with Big Data
There are a lot of consultants out there that tell retailers to buy expensive tools. But what retailers could do is just pragmatically start with the low-hanging fruit: what data they already have available, how they can combine these data sets in order to then tweak the existing shopping experience that they have and then improve the revenue and improve the bottom line of that. It might not cost millions, it might cost a couple of a hundred of thousands, but the bottom line is we will see a dramatic improvement.
A lot of times now we hear about success stories of certain retailers and clearly they are success stories. Amazon is hugely successful as an online retailer throughout the world and so in China is Alibaba and others in the B2B context. But what is important is not just which company is successful, but what type of company is successful, what kind of method works, what kind of business case works and what doesn’t. The recipe, the secret sauce here, is not to choose a particular company and emulate it. The secret sauce is to understand the business model and to understand the fundamental method that works.
Impact of Big Data
Big Data is going to increase profit, that’s as simple as that. There is no question that Big Data is not just improving efficiencies or increasing loyalty. No, it is about the bottom line. It is about the bottom line that is selling more products at a higher profit. And that means at the end of the day that Big Data will pay for itself. But it requires experimentation. It requires trial and error. There is no absolute certainty that a particular Big Data approach will work. So what retailers have to do is to become risk taking.
See, over the last couple of decades we have seen retail change dramatically. From the small mum and pop stores to supermarkets and department stores. That was innovation. That was innovation in how we retailed. Or think about more recent innovations like pop-up shops or shop-in-shops. These are true innovations that come of experimentation, that come out of risk taking. Retail is going to change like every other sector, thanks to data. So the one thing that retailers cannot afford is remain stagnant and continue to do what they are doing. They need to get up and they need to get going and they need to become experimenting.
What’s going on in (R)etailling
If the world is changing as it is, it is important to keep knowing what the latest trends are, to keep understanding what is at the core of the change. Not just the three or four sentences that you get when you watch a television show, but in‑depth understanding, in-depth use cases, in-depth success stories. That’s why you should come to this conference.
What’s going on in (R)etailing?!
Big Data is een onderwerp van What’s going on in (R)etailing?! Dit congres is het jaarlijkse ontmoetingspunt voor honderden retailers. In 2016 viert What’s going on in (R)etailing haar 25-jarig jubileum. Meer informatie over het congres is terug te vinden op de website van What’s going on in Retailing.