Data analysis was once the endgame when it came to predicting market trends, but with technological innovations and the advent of real time analytics, these old models may need an overhaul.
Imagine a vacuum-cleaner salesperson arrives on your doorstep with a new Dyson in one hand and a credit card machine in the other. You didn’t order the new vacuum, but now that you think about it, your old model has definitely seen better days and was probably designed around the turn of last century.
How did they know you needed a new vacuum?
This scenario, while a little simplistic, is more than just coincidence. Anticipating buyer behaviour is not a Big Brother fantasy – it’s present-day reality, and will come as no surprise for anyone with experience or knowledge of predictive analysis. The data required to predict buyer trends is readily available. Add recent technological advances and we’re entering a sci-fi world of consumer satisfaction.
A digital crystal ball
As the scale of real-world interconnectedness grows, we can now analyse data ‘on the fly’ – giving real-time feedback on the present – or crunch enormous amounts of historical data in an attempt to accurately predict the future. Call it a ‘digital crystal ball’.
Earlier this year, Amazon.com patented what it calls ‘anticipatory shipping’, which is essentially a way of shipping products to buyers before they’ve ordered them, based on the buyer’s behavioural data. It’s both a sensible and audacious strategy – a mix of old-school data analysis and business innovation.
And where innovative predictive analytics was once the realm of only large enterprises, similar data and more cost-effective technology is now readily available to small and medium businesses (SMBs), enabling them to delve into big data to create business opportunities and win customers.
A new reality for SMBs
We’ve all sifted through the daily mail, pitching flyers for obscure services and products into the bin like Michael Jordan dunking another winning basket. Now, companies no longer need to shotgun catalogues into a clutch of city suburbs in the hope of generating sales.
With access to the right information, a method to analyse it and a cost-effective way to implement your findings, personalised marketing is now a reality for any SMB. Consumers appreciate a response tailored to their needs – something our friends at Amazon know.
When viewed historically and used in conjunction with real-time behaviour, data can also be inspirational, enabling SMBs to use predictive analytics to guide innovation and company direction, rather than just establish business rules.
Don’t miss the next big trend
The business world has traditionally used predictive analytics as a means of managing risk and predicting market movements, and it remains a useful tool for reducing exposure and increasing business by identifying upcoming opportunities.
However, despite holding many merits, in some markets the traditional predictive model is increasingly viewed as a false economy, creating a kind of self-fulfilling prophecy or repetitive cycle, which expects the future to look like the past and ignores fringe data that may sway results.
Any minor abnormality can be dismissed in favour of the data’s bigger picture. But what if this small indicator, a pebble dropped in a large pond, is the beginning of a future trend?
Just in the way that the Industrial Revolution triggered a plethora of market shifts, the current technological boom we’re now riding presents new ways for SMBs to interpret existing data, predict behaviours and respond rapidly to ensure they keep abreast of the trends.
An example of this technology is machine learning. If you’ve ever surfed a retail company’s online store, you’ve likely already encountered it. Usually presented as a “You may also like…” recommendation for other products or services, the machine behind the site is drawing from your historical data while simultaneously learning about you on the fly – your page views, your buying history, even the amount of time the mouse pointer hovers over an image or text.
This combination of artificial intelligence and data analytics allows businesses to automatically deliver an informed response, tailored to the customer’s needs.
While valuable trends can be predicted by interpreting big data, don’t be afraid to treat the data for what it is: history. New technology means the ability to accurately predict your customers’ behaviours, and offer rapid and tailored responses is now within your grasp. Remember that it’s not about the information you have – it’s how you use it that matters.