Big data will not save you
- 25 February 2016
- 1,982 views
Following the numbers isn’t a recipe for break-out success.
Online retail behemoth Amazon made a significant move earlier this month.
Plans leaked out of Amazon towers that CEO Jeff Bezos plans to open between 300 and 400 physical stores.
The ultimate online retailer is moving into bricks.
It’s Amazon’s latest play on their way to becoming the first company with a market capitalization of US$1 trillion.
Part of their success is their ability to study and use data. Approximately 30% of people start their search for a product on Amazon, versus 13% on Google. Amazon have more data on user behaviour than anyone else in the world.
They know stuff like which customers buy lipstick only when it is on sale, and which customers need a 10% discount to purchase.
They are way out in front of their competitors. In fact, the relationship between Amazon and the next-biggest e-commerce companies has been described by one wag as ‘Amazon and the seven dwarves’.
So if it works for Amazon, it can work for you right? Wrong.
In terms of pure play e-commerce sites in particular, Amazon have sucked all the oxygen out of the room. Many well-known e-commerce sites are predicting that they will soon either be sold or go out of business (though omnichannel retailers should be ok).
But let’s imagine for a second that other e-commerce players could compete with Amazon. Data is not the way to best Jeff Bezos and the world’s biggest store.
Because the truth is that, while ‘big data’ is a handy catch-all description, it is not a cure-all. Data is about iteration. It improves process. It does not lead to creativity. It does not lead to inspiration. It does not lead to innovation. It does not lead to breakthroughs. It really doesn’t lead to greatness. True greatness does not rely on data, it usually flies in the face of data.
Great businesses are not forged by MBA graduates honking on and on about how big data is the second coming. They’re forged by entrepreneurs who go the opposite way to everyone else.
When you just follow data, what you get is an absolute snooze-fest.
Look at Hollywood, whose bestselling films of the last decade or so have included Iron Man 3, Spiderman 3 and endless Harry Potter, Pirates of the Caribbean and Lord of the Rings films. Sequel after sequel after sequel (Star Wars was huge, but, whisper it, it was so similar to the original movie that it wasn’t even a sequel – some critics actually called it a cover version). Creatively, Hollywood is bankrupt.
Now look at TV. Breaking Bad, House of Cards, Homeland, Boardwalk Empire. Why is TV going through a period of unprecedented creative growth while Hollywood stultifies? Because Hollywood’s decisions are led by data and TV is led by creativity.
Will you be going to the movies this Friday night? Of course not! You are staying at home to binge-watch Jessica Jones on Netflix. Me too.
So sure, by all means get your customer identity management all lined up, develop your single customer view and squeeze out a few more bucks.
But don’t be fooled: data is no substitute for really knowing your customers or risking real innovation. That’s a little bit harder.Back to all
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