Industry Paul Sherratt
How data is changing the industry
This month our regular contributor Paul Sherratt looks at the impact of big data on the sports industry
“The amount of data in our world has been exploding, and analysing large data sets, so-called big data, will become a key basis of competition, underpinning new waves of productivity growth,
innovation, and consumer surplus” According to research by MGI and McKinsey's Business Technology Office.
B
ig Data encompasses all that we see, read, interact with, purchase and so much more. Information from multiple
sources such as YouTube, Twitter, Facebook, Flickr, WordPress, search queries, downloads and emails can be brought together to analyse practically anything. I have sat in many global product
development meetings for many brands. Typically the product team bring their latest innovations, the marketing department provide us with their input and the sales team put forward their thoughts and reactions. As time has moved on, these meetings have been more and more influenced by elements such as market research – from small focus groups to large surveys. Often this feedback is dated or non-geographic. Big Data looks set to change all this. The implications for all aspects of the sports
trade are vast and will impact multiple areas across the industry:
BUYING AND MERCHANDISING TEAMS Big Data could, for example, collate in real
time by any segment (age, sex, region etc), information from consumers regarding specific products. This will enable buying and merchandising teams to get an earlier fix on what consumers think about new products and their prices. This real time knowledge can be fed into the demand and forecasting process much earlier than traditionally would be the case. Often there is a lag between a product being
released onto the market and an upsurge in volume consumer demand. However Big Data can provide immediate information – for
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example a large number of tweets or posts extolling the virtues of the latest putter or a host of positive YouTube reviews, or perhaps a sudden increase in google search for the product can provide invaluable information for a merchandising team. All of these factors indicate a fast growing
demand and will enable merchandisers to react and plan future deliveries to cope with the anticipated demand.
STORE AND GENERAL BUSINESS OPERATIONS Whilst we have all from time to time been
stopped either in store or on the street to participate in a store-exit survey to ultimately provide information back to head office about the consumer’s view of the business, Big Data can provide more immediate and relevant feedback. Big Data can establish the consumer’s view of your service, availability and store cleanliness for example. More interestingly, it can also be used to
assess staff motivation and potentially identify things that you need to do to reduce staff turnover. Often if internal staff audits are undertaken the true staff moral story is not uncovered. Using Big Data the ‘real story’ can emerge by trawling, in particular, social media activity from employees or an upsurge in linked activity from within the business.
E-COMMERCE E-commerce continues to be a driver within
the sports industry and due to the nature of the relationship between the goods and sport itself, Big Data can provide powerful information to make the processes more user-friendly and to identify new products. Immediate feedback from verification sites such as eKomi can be combined with external information to enable e-commerce retailers to assess their customer care processes. More interestingly, information regarding particular product ranges carried by particular retailers can be gathered and assist with identifying products that competitors may have and are successful with, and products that consumers are actively looking for but are not being stocked by the retailer.
PRODUCT DEVELOPMENTS Similar data analysis can enable brands to
react to new market introductions much earlier than when lines may traditionally ‘hit the radar’. This increased speed of feedback will have a positive effect on the speed to market and could prevent the traditionally slow reactors falling behind.
MARKETING Finally there is an incredible amount of Big
Data available to enable marketers to get another view as to how ‘The Marketing P's” - including products, prices, promotions -stack up against the competition.
MGI and McKinsey conclude that there are five broad ways in which using Big Data can create value:
1. Big Data can unlock significant value by making information transparent and usable at a much higher frequency
2. As organisations create and store more transactional data in digital form, they can collect more accurate and detailed performance information on everything from product inventories to sick days, and therefore exposes variability and boosts performance as a result
3. Big Data allows narrower segmentation of customers and therefore much more precisely tailored products or services
4. Sophisticated analytics can substantially improve decision making
5. Big Data can be used to improve the development of the next generation of products and services
What is clear is that, whether we see it or not, the way that we develop, produce, and sell consumer goods in the future will be directly influenced by everything that we, as consumers, do or say more so than at any time in history and Big Data will be driving these changes.
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