Forget big data, look at small data for better business decisions
While many companies rely on the so-called big data they collect from the internet, they may not make the best business decisions if they do not heed the small data on customer behaviour, warns a brand expert.
“Everybody is using big data to make business development decisions. This has resulted in many businesses making similar decisions as they reach similar conclusions using the same data. But in fact, they may make the wrong bets if they forget to also look at the small data analysis of consumer behaviour,” said branding expert Martin Lindstrom.
Speaking at the 7th Asian Leadership Conference, of which the South China Morning Post is a media partner, Lindstrom said many companies use big data analysis to determine business strategy.
He said while big data may be useful, it may not give a company the full picture it needs. Small data analysis, which does not only rely on a large volume of data but also uses a more structured analysis to find out why customers behave the way they do, is more important.
He cited the example of the big-data finding that women now spend 23 minutes more every morning to prepare themselves before going out. The reason, he said, is because many women take 16 to 17 selfies every morning and post on Facebook or other social media before stepping out.
“This shows the new generation of women like to have recognition with friends. They want to join the peers.”
Retailers need to fit this need for sharing and recognition into their strategies, he said, adding some fashion retailers can now use digital techniques to allow customers try on the clothes, take selfies and post online to share with friends for immediate reaction to help them make shopping decisions.
Referring to a supermarket he helped rebrand, he said the key to success is to create more interactive opportunities for customers. He cited the examples of a toy rooster the supermarket introduced that dances when its chicken roasts are ready, and its decision to make its staff wear colourful hats to encourage customers to take photos.
“After adding these new features that match the taste of the new generation of customers, this supermarket in the US found sales increased 42 per cent, compared with the usual 4.2 per cent.”
He said many social media developments may not be all positive for the younger generation, pointing to the popular emoticons of doubt. He said not just South Koreans, but the young in many other countries feel uncertain about the future and seek validation of their peers.
“The current young generation may be the most uncertain lot ever in history. Earlier, somebody in a high school classroom might have had 23 competitors. Now, with Facebook and other social media connecting young people from all over the world, it’s like everyone has 23 million competitors,” he said.