“Google conquered the advertising world with nothing more than applied mathematics.” – Chris Anderson, editor in chief of Wired Magazine.
Every company creates an array of data, from the information concerning the product, to the information pertaining to the customer. Some years ago, a few companies made a bold new move that no one else had thought to do: They simply looked. They looked into their records and saw the immense potential that lay within. They dove in, analysed their data, and discovered a new way of running their business. Here are a few of these success stories.
Walmart – The Supermarket Giant
The company started up as a single shop, the “Walton’s Five and Dime”, in Bentonville Arkansas. It now has 11, 633 stores and clubs in 28 countries, and is not only the world’s largest company in terms of revenue but is also the largest private employer.
Walmart discovered the value of data analytics back in 2004 when Hurricane Sandy hit the United States. They analysed their mountain of data and discovered some surprising statistics. Their sales of strawberry Poptarts rose with hurricane warnings. They then decided to place Poptarts next to the hurricane supplies at the entrance of their stores when there was a hurricane warning. This move resulted in an upsurge of sales and millions in extra revenue.
The company has since then continuously developed and enlarged their analytics department to become true ‘Big Data’ pioneers. The end result was the creation of the ‘Walmart Data Café’, an analytics hub where any team member of the business can go and resolve their problems with the data analytics team to better their performance. Sales are monitored, and automated alerts are triggered, when performance indicators hit a certain level. A typical problem that used to take 3 weeks to solve can now be dealt with in less than an hour. This data-driven strategy is vital in their competition-ridden world of retailers.
Spotify – The game changer
Spotify is a Swedish music streaming company that launched 8 years ago and has since grown exponentially. In March 2011 there were 1 million users but by August of the following year, the company had 15 million users. The service now has 100 million active monthly users, 40 million of which are paying subscribers. The company achieved such results by being data driven from day one in order to provide the most personified service possible.
Playlists are recommended, based on what users listen to. Their recommendations have become increasingly accurate with time and can now very precisely determine user preferences. Spotify has surpassed the American streaming giant Pandora, with 30% more subscribers and a music database 15 times greater.
Ralph Lauren – Shirts and the Internet of Things
Technology can increasingly be found everywhere, even in your clothes. Ralph Lauren is now in the race for wearable devices and launched the connected PoloTech Shirt in 2014. The shirt has sensors attached to silver threads that monitor vitals such as heart rates in order to improve fitness and wellness. Other wearable devises exist, most commonly smart watches such as the Apple Watch. Ralph Lauren is the example of a company adapting not only its structure of technology, but also its actual product.
Twitter – Playing on both sides
Twitter is different to the previous examples. The online news and social networking service is very popular for blogging but also for promoting products and services. Up to 90% of Twitter’s revenue is based on adverts, meaning companies are paying to appear on Twitter feeds of potential customers. However, the ingenuity in Twitter is that is also offers the data it gathers for analysis. But average businesses do not have the tools to capitalize the gathered information. Twitter has thus started partnerships with companies that are specialized in data analysis, such as IBM. Twitter is a perfect example of how a company can turn gathered data into a commodity for others to use.
These companies have recognised the true value of data analysis and have reaped the rewards by becoming become some of the most profitable and fastest growing companies in the world. Stay tuned for more data success stories to come.
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