As the growth of e-commerce and social shopping continue, the value of big data collected by retailers and businesses is becoming increasingly important and retailers must look at ways to unlock this, according to the latest research.
Business analytics software firm SAS has unveiled research in association with the Centre for Economics and Business Research (Cebr) which investigates how British organisations can monetise big data through high-performance analytics.
‘Big data’ refers to the significant amounts of consumer and business data which organisations can capture via social media, smartphones and scanners and SAS’ report ‘Data Equity: Unlocking the value of big data’ estimates that data equity was worth £25.1 billion to UK public and private sector businesses in 2011.
It is thought that the increasing adoption of big data analytics technologies will see this figure rise to £40.7 billion on an annual basis by 2017 and Matt Steell, Data Solutions Director at Dunnhumby, believes that retailers must capitalise on these opportunities now.
He told Retail Gazette: “There is an opportunity to capitalise on analysis across organisations and this opportunity exists now.
“Big data is a real issue for most organisations now and we felt we needed to dig deeper so we did more research; there is a lot of market noise about big data and we think this is confusing.
“In spite of this big data is nothing new and, unless addressed, businesses won’t gain better insight and judgment into what they can do. Senior figures need to consider how to change their business through high performance analytics as with this data you can analyse things within seconds, not minutes or hours.”
Cebr’s survey shows that there is a realisation of the need for big data analytics across businesses, as 98 per cent of Chief Financial Officers feel that data is more important than five years ago, meaning that strategic decision-making and customer insight is also more important.
In its research, the firm also noted that £216 billion in value will be created by big data in the next six years, creating 58,000 potential new jobs, representing market growth of 22 per cent and as such IT tools now drive efficiency more so than ever before.
Mark Wilkinson, recently appointed Managing Director of SAS, explained the importance of using relevant tools to break data down into a manageable size, adding that many senior figures are yet to grasp the significance. He believes that the role of the CFO has fundamentally changed as companies no longer report retrospectively but drive insights to make these an asset.
“This research revealed a lack of focus from UK boards on data and how it is really used,” he told Retail Gazette.
“Of those we surveyed, 39 per cent lack formal processes and there is a lack of skills in organisations to help drive use of data and we are very concerned about the development of necessary skills.
“However, 88 per cent of business leaders acknowledged that data can help improve customer service showing that organisations do see the value of data and it’s ability to provide insights.
“We are looking at how we can influence this to serve UK businesses with analytics in mind.”
Steell explained that Dunnhumby recognises that personalisation is key to continued growth for its clients, citing grocery giant Tesco as a key example.
He said: “Tesco Clubcard is an example of creating something so that the customer wins and Dunnhumby is driving personalisation forward.
“The balance between how to collect data and how to help individuals is vital and both Dunnhumby and Tesco must have consent to use data and be sure it will benefit the customer.
“The figures in SAS’ research are quite low; 42 per cent of respondents collect data but do nothing with it. We use every part of data and Tesco realises the customer needs to be heard, so data is collected after every transaction.”
Steell touched on a key issue surrounding security and acknowledged that consumers are right to be cautious over data sharing but noted that current legislation including Government proposals for ‘midata’, allowing the public access to their own data in a quick and easy way, seeks to improve consumers’ rights.
“There is so much reputation at risk that companies must be aware of data security and protection,” Steell commented.
“The law will evolve from different feedback but companies won’t lead that process; customers will begin demanding their data back which is a very natural progression.
“In the future, more people will have control over their buying and online behaviour, which can only be a positive thing.”