Big Data and Business

I recently came across Wall Street Journal’s article, “The Big Mystery: What’s Big Data Really Worth?” and it got me thinking about the value of data. The topic brought up some interesting points of discussion including: obtaining revenue from your data, using it to acquire new customers, altering product lines to fit customer needs, and the lack of action taken with collected data

Data is a very powerful tool in business today, despite how easily it can be collected.  However, one of the biggest obstacles a business might face is understanding how to apply Big Data to their business strategy.

The Kroger Co., a supermarket chain in the United States, records the purchasing history of their 55 million customers.  The insights obtained from this information is extremely valuable to product companies such as Procter & Gamble and Nestle.  In the article, it was estimated that “Kroger makes $100 million a year from data sales.”  Alongside their data sales, Kroger also uses their own customer data to reach out to their customers with coupons and offers that match the spending habits of their customers.  Data is working double time for them and has grown to become a huge asset for the company.

Laura Martin, an analyst at Needham & Co states, “Information on individual users loses value over time as they move or their tastes change…that makes data a perishable commodity and very difficult to value at any given moment.”  For some companies, it is a struggle to maintain relevant information. Fortunately for the Kroger Co. and companies alike, their customers continue to shop, allowing their data to update simultaneously.

In the data industry, there is a term known as “data hygiene” which refers to cleaning and updating data to be both accurate and relevant.  For companies not as fortunate as Kroger, the process is mandatory to hold on to valuable leads and return customer information.  In order to capitalize on your data by selling or using it, your data needs to be continually updated.  Mr. Den Uyl states, “I value data based on how companies will use it to make money with its expected life.”  By using data hygiene techniques your data can be more valuable and have a longer life expectancy.

Tyson Knowles