New and better data, big business
Not big data, but new and better data enable better business decisions, said Professor Eric Bradlow at the fourth annual Erasmus Management Lecture at the Erasmus Research Institute of Management (ERIM) on 26 May.
A Professor in Marketing, Statistics and Education at University of Pennsylvania’s Wharton School, he was invited by ERIM to present his marketing research in business-to-consumer markets to a large audience of professionals and scholars. The next day, Professor Bradlow was also a keynote speaker at the 2014 ECMI Symposium on Marketing & Innovation, which took place at the Erasmus School of Economics.
Front-running companies are already basing their business models on new and better data, Professor Bradlow said. For example, Netflix, an online content provider, designs new television shows on the basis of the viewing history of groups of customers and the attributes of the videos they watched, while online retailer Amazon anticipates which products its customers are likely to buy, and ships them to nearby warehouses even before the actual purchase takes place in order to reduce delivery time. Online or offline, leading companies are now building their business models one customer at a time, he said.
Professor Bradlow also presented his opinion of the future of management science. We will know exactly how customers move through stores, by tracking the paths of their shopping carts – data we can combine with data on purchases, he explained. Smart shopping carts will give product recommendations on the fly. We will also know exactly what products customers look at, as shelf-mounted cameras follow customers’ eye movements. The professor found that inefficient customers are more valuable than efficient ones to retailers, because “people that browse more tend to shop more,” and that “60 per cent of the purchases in the store were unplanned,” a testament to the power of in-store marketing.
After the lecture, a panel of experts from Alliander, Deloitte, ECT, Oracle and Aegon pointed out that translating insights from new data into novel business models and processes has proved difficult in practice. It takes a lot of energy to bridge the rift between fact-driven data analysts, and managers and marketeers who follow their intuition and creativity – traits that the panel members considered as complementary to analytical skills. Indeed, in the words of Pieter den Hamer, Manager Business Intelligence and Analytics at Alliander, new business opportunities require thinking outside the box.