In the next three years, how will your competitors be using big data to reach customers? From what we know now, your competitors will use big data to know exactly how to interact with every customer. And it’s happening soon. This doesn’t give your business much time to prepare.
Gartner reports that by 2020, prescriptive and predictive analytics will draw 40% of net new BI investments by enterprise. In a separate report, Gartner predicts the market for prescriptive analytics software will grow to $1.1B in 2019. (This is up from $415M in 2014).
These investments into prescriptive and predictive analytics are only part of the story. IDC reports the big data and business analytics market will grow to $203B by 2020.
What does this mean for you? Across all industries, enterprises will leverage customer data to deliver better personalization. And we can anticipate this will drive remarkable revenue growth.
Why Prescriptive Analytics Will Transform Your Business
Prescriptive and predictive data analytic software is still in its early stages. However, the insights gained from using it can be invaluable.
We can currently gather siloed data from customers. This comes from purchase histories, browsing habits, surveys, and more. But combining this data into actionable insights is a challenge.
Here’s a simple example of how organizations can leverage big data. Your customer data may indicate female customers ages 34-50 prefer to shop on Wednesday afternoons. But what does that mean for your personalization strategy? And what about female customers who aren’t shopping on Wednesday? Or male customers in the store at the same time? Though current data provides insights, it doesn’t give specific personalization recommendations.
Now, take that customer profile – female customers ages 34-50 – and add even more data. How many of these customers purchased specific brands recently? How recent were those purchases? What is the customer’s household income? And so on. With more data, you aren’t grouping your audience into large chunks. Instead, you’re able to create a unique profile for every single customer. You can imagine how much more personal and effective your customer engagement efforts will be with these kinds of insights.
Big data enables detailed, precise, and personal profiles for our customers. When prescriptive and machine learning big data software arrives, we’ll know exactly how to personalize their shopping experiences.
We’re already seeing hints of this big data in action with well-known companies. Amazon Go, Amazon’s grocery store experiment, uses facial tracking to automatically “check out” customers. There’s no doubt they’re also storing this data into a massive database they can then use later to improve shopping experiences. Additionally, Google recently announced it’s going to use payment data to connect in-store transactions with online user profiles. Imagine how your approach to customer personalization will change when you have this same data!
How to Prepare for an Even Bigger Big Data Revolution
Right now, prescriptive data analytics provides some insights. But soon, we’ll be able to create customer personalization that transcends personas. Instead of four or twenty or even 100 customer avatars, we’ll have data-driven profiles for every single customer. AI applications will tell us exactly how to engage those customers.
This will dramatically disrupt our approach to personalization. The good news is we have time to prepare. Here are some things we can do:
- Invest in AI-powered customer personalization technology to develop a culture of personalized experiences
- Create customer communities to analyze interactions and mine insights
- Deploy IT measures for customer security and privacy are in place (such as encrypting data)
- Review the big data you have now to identify actionable insights
As prescriptive and predictive analytics expands, customers will expect deeply personalized experiences. The future of big data arrives soon. If we act now, we have just enough time to prepare.