I read an interesting article on Forbes.com, “Why Big Data Marketing Needs To Get A Whole Lot Bigger,” in which contributor Greg Satell describes typical marketing practices used today and how big data can greatly improve them. He hit on a number of valid points:
- Our marketing practices have largely remained the same even as media has been transformed: we identify a target market, bombard them with ads and other communications, and, if we get a good response, we bombard them more.
- The popular “consumer journey” marketing concept doesn’t reflect our typical path-to-purchase, which is “less like a guided tour and more like a drunkard’s walk.”
- The statistical approach to marketing – where data from a small, controlled sample is applied to a larger population – has its limits and we can move beyond this tact to develop better programs.
If you have been reading this blog at all, you’ll know that we whole-heartedly agree with these insights. Big Data fundamentally changes Marketing – no doubt. But are Marketers listening? Satell’s view is that they are not – “The truth is that while media has been transformed, marketing practice has not kept pace.”
On the whole, I think he is correct on this point. Marketers have been slow to respond to these changes. But some of the “traditional” retailers are starting to act. As Meredith Bagnulo notes in her “Big Data Equals Big Business for Some Savvy Retailers” story on EngageRetailToday.com: “Advances in analytics technology are enabling retailers to harness and analyze both transactional and behavioral data to help them get to know their customer better and create lifetime customer value.”
As an entrepreneur, I am optimist by nature. But I don’t think I am wearing rose-colored glasses in my belief that we have hit a tipping point in retail. Years of watching Amazon’s stunning and continued growth have convinced them that they need to change. Big Data fundamentally changes Marketing, and 2013 is the year they have to act. 2014 is too late. As Satell states: “It’s becoming more and more difficult for any company without a strong big data effort to compete in e-commerce.”
Importantly, the way retailers are trying to catch up to the likes of Amazon is via innovative start-ups. They have the skills, the focus, and the drive to innovation that retailers need to tap into to compete with the investments Amazon has made. Satell calls out Concentric and Bloomreach (a fellow Bain Capital Ventures company) but there are others such as …ahem…CQuotient. We use big data to tailor hyper-personalized emails from retailers to their consumers, creating more relevant and valuable communications to customers. The Children’s Place, Destination XL, Men’s Wearhouse and others are already seeing the benefit. If I am right that 2013 is a tipping point, you will soon be hearing about many more!