English | EN THE POWER OF PREDICTION
October 29, 2014
If there was a way for your business to predict the behavior of its customers, would you seize it? In late December of 2013, Amazon was granted a patent. This fact alone shouldn’t be surprising – tech giants can file for thousands of patents each year. What you should pay close attention to is what this particular patent was for. Amazon wants to develop a system to ship products to customers before they’ve even bought them.more–>
Businesses in today’s world are able to collect and analyze more and more data. Some of this comes from the rapid expansion of the Internet of Things. With smart phones that track your location, bracelets that track diet and sleep cycles, and forks that track your eating habits, consumers are sharing more and more data in larger and larger quantities. With all of this data readily available, the importance of analytics is rapidly increasing.
Amazon’s patent signifies a change in the market – they are stating very clearly that predictive analytics is the way to remain competitive. Amazon is so confident that they can predict customer behavior with the data that they have that they are willing to incur costs to ship products that they predict will be sold, to the people they predict are going to buy.
With a stockpile of data, many businesses are content just performing normal business intelligence tasks. They’ll construct reports, produce metrics, and create charts representing things that have already occurred. This is an important first step, because it gives you a clear insight into what your data looks like, helping your business analyze historical trends. There is more information hidden in your data than you might think, however.
By taking the next step and introducing predictive analytics, your data can tell you what consumers are most likely to do over the next few months, years, or longer. The power of that kind of information cannot be understated. You can predict the likelihood that a customer might purchase a given product and suggest it to them, or you can predict the probability of various risks coming to fruition and take steps to mitigate them. With this information at your fingertips, the value of your data increases many times over.
The advantage that predictive analytics can offer your business is very clear. Take the hint from Amazon – your data cannot just be retrospective and descriptive in tomorrow’s market. It needs to be predictive.
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