This week's readings provide three very different examples of the use of predictive analytics. With reference to one or more of these examples,
i) Outline one issue OR one benefit that the growing use of predictive analytics presents you with as a citizen or customer.
ii) What does this mean for you?
ii) What does this mean for you?
One benefit is that a business will be more in tune with my personal preferences and habits. In the Target case shoppers who buy swimsuits in April could be sent sunscreen coupons in July, and diet books in December. This is a strategic method of retaining customers because this predictive analysis ensures that coupons or messages of interest will be sent to the customer.
ReplyDeleteThis means that I am probably more likely to spend my money at this particular store if they are giving me special offers on the things I like. Also, if they can predict what I need before I even realise, I will probably be likely to impulse purchase.
An advantage of predictive analytics is that it is being used to monitor customers and offer them discounts. For example, from the NY times article, it was seen how Target a large American retail store used predictive analytics to try and determine what Woman were pregnant. This was so they could send them coupons for new born baby products to attract them to shopping at Target frequently. .
ReplyDeleteThis use of offering tailor made discounts and deals would affect me because if I received coupons I would be far more likely to buy a product off a retailer were the price was cheaper or where I would get a better deal for a product that I was interested in.
One issue demonstrated by the Target case is the degree to which scientific, mathematical and psychological methods are employed to influence customer purchasing through data analytics. The customer's decision to make a purchase is no longer simply matter of personal desire or need but is now as much a crafted product as the item that they are buying. Having the ability to influence purchasing behaviour before the customer even considers entering the market for an item is an unprecidented degree of commercial power over customers.
ReplyDeleteFor me this represents a conflicting situation. On the one hand it enables intelligent business processes that will benefit both the business and customers in acquiring what they desire. However it also generates an opportunity for the commercial sector to abuse the power. By this I refer to their ability to use calculated tactics to diminish our individual will-power and encourage spending habits that may benefit the business at the exploitation of the customers' humaness. Furthermore this may encourage businesses to focus more attention on producing better sales tactics rather than improving the quality of their products.
In the target case the man responsible for the pregnancy stats was given a pay rise. When the individual's interest within the company are to sacrifice other people's privacy I have an issue with that. It incentivises a race to the bottom of the corporate moral standard. The law is notoriously slow in adjusting to these sort of changes as such we as consumers serve to be abused for some time to come.
ReplyDeleteAs a person I don't want a company involving itself in my personal life. I believe in freedom and equality and corporate predictive analysis serves to erode that. However, I can't change much and so mostly I just avoid the internet and registering for company's databases.
A benefit that predictive analytics presents me as a customer is that deals and specials that are relevant to me are made apparent (e.g. diaper coupons were sent to pregnant women). This means that I am more likely to visit that particular store, as I have the incentive of receiving a discount. This benefits me as it means that I am saving money. Although it may seem like an invasion of privacy, it is not being used in an unethical way. I think it is a great way to market to individuals. It is also a great way for me to avoid receiving emails or brochures that promote items that I have no interest in (e.g. DIY products), as I find irrelevant marketing information annoying. It also makes me feel as though I am important to the firm, as they are interested in my purchase decisions.
ReplyDeleteOne issue that came to mind from using predictive analytics from the World cup case was how upcoming matches were predicted based on external statistics such as past matches, rankings and geographic success data. It appears that with this information, customers of betting outlets are able to make the right decision. With the case mentioning the odds of 2010 world cup winners Spain having a 7.6 percent chance of winning behind Brazil, it was clear that over the past four years their team was not as good in comparison to the odds they had by not even making it out of the group stage. Also, Brazil had the highest percentage of 21 from this analysis but were dominated by Germany in the semi-final. This shows that although both teams have a wonderful football history and Brazil were on their home soil, it came down Germany ultimately had a better experienced line up compared to the youngsters of Brazil. With a basis of poor statistics based off past teams, rank, and geographic success, this eliminates personal decisions made by customers who will place bets on these football matches and ultimately loose out because of someone else’s establish view.
ReplyDeleteAs a continuous football viewer and better myself, it is hard to depict the outcomes of football matches, especially the FIFA World Cup based on raw statistics that do not fully describe the team internally. Instead, it is better for me to make my own decisions how current players and teams perform by watching football matches myself instead of gathering information from historic events as teams change over time. This is what makes football unpredictable as anything can happen in the blink of an eye.
the 5th point in the article "Clouds, big data, and smart assets: Ten tech-enabled business trends to watch" interests me the most. It discusses turning every business into a laboratory to conduct small experiments that if proven successful can be repeated enterprise wide.
ReplyDeleteThis means every aspect of every business needs to be able to evolve and keep up with the latest trends. Using tried and true business practices will no longer be sufficient. Business leaders need to be so far a head of the game that they need to how to respond to any possible change before they have started experimenting on whether or not these changes will be successful for their business.
For me as a consumer this means I could be soon living in a society where marketing will no longer be trying to convince me on what I should be buying but instead trying to predict what we want well in advance of us demanding it.
A benefit of predictive analytics is how greater value may be generated for a customer due to having promotional media tailored based on consumer behaviour and patterns. The importance of this for a business can be attributed to the aim of greater customer acquisition and ultimately strengthening customer retention. Within the Target case the example of the pregnant daughter ultimately reflects the company's aim of determining "things you want before you even know you want them.”
ReplyDeleteAs a consumer, I believe such approaches are beneficial in my purchasing behaviour due to a high degree of meaningful communication which encompasses my specific interests and preferences as well as the exclusion of information which I may personally find irrelevant.
One benefit that this growing use of predictive analytics is the ability to market to specific groups of people that are going through different life situations. The analysts are able to collect information about customers and determine the goods they would be willing to purchase during this life event. “Consumers going through major life events often don’t notice, or care, that their shopping habits have shifted, but retailers notice, and they care quite a bit”. When changes in life events occur customers change what they are buying so places like target are able to swing in and send advertisements that match the customer needs at that specific time. For me this means I would be getting advertisements that would be useful for me and not receive advertisements on irrelevant items like gardening products for example. So I would be more likely to spend my money on the items being advertised .Also as mentioned by others the ethical problems with the collection of such personal information disturbs me, as this information is private and I personally wouldn't be happy with a company such as Target to have this information about me.
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ReplyDeleteOne benefit of predictive analytics for the customer is that it enhances their preferences and gives them a sense of appreciation as they’re being noted and given special offers by the company. As for the business, this enables them to improve customer relationships thereby increasing customer profitability and value. Also, it enables them to change the purchasing powers of the buyers and improve its strategic position. As a customer, predicting and knowing such private information as pregnancies and others in advance could in some way be seen as invasion of privacy. Some people just wants to enjoy shopping and not be examined or be judged on the products they buy.
ReplyDeleteOne benefit that analytics presents to me as a customer is it eliminates me receiving promotional material that I have no interest in and would never buy (basically junk mail). Analytics informs me of products that are out there that I might be interested and that I didn't even know existed. It also feels as if marketing strategies are more personalised toward each customer which makes it
ReplyDeleteA) easier for me to shop
B) improves brand loyalty
For example with the Target case, the company is able to aim products/specials that are only relevant to that buyers particular purchasing patterns and behaviour. (Pregnant women and nappies)
The use of predictive analytics are beneficial as the customer is told what they need before they even realise it. This encourages customers to buy things that they may have not even considered buying if they weren’t reminded of their need. Being able to predict what certain customers are going to want to buy means that coupons and discount offers can be sent to the correct people. For me, I am definitely more likely to buy from a store that has sent me discount offers as opposed to going somewhere else and paying full price. It is also effective as customers won’t receive coupons for things that they have no interest in. This can be really annoying and put you off buying from that particular store
ReplyDeleteOne benefit of predictive analysis for Target was their ability to personally tailor advertisements based on a customer’s personal and shopping habits. In the article “How Companies Learn Your Secrets” an example of this is marketing specifically designed at pregnant women in their second trimester, when most expectant mothers would begin buying products for their baby. Predictive analytics is therefore beneficial for the customer, through the tailored advertisements, relevant to their specific needs. Predictive analytics ensures that customers no longer have to sift through irrelevant advertising to find products they are interested in. Instead, what they demand is placed right in front of them, directly for them to see and take not of.
ReplyDeleteStructuring advertisements to fit my specific needs and interests means I am much more likely to spend money. Fortunately for the advertisers predictive analytics can ensure the success of a marketing team, in that they are able to reach the right people at the right time. However, for me it means that I am constantly resisting the urge to spend my money on the constant promotions and advertisements strategically placed for me to see.
One of the benefits which predictive analysis allows for is the ability to upsell new products or advertise discounted products. This was shown in the Target case by retaining shopper’s information about prior purchases and sending coupons and advertisements to additional products, which may be of interest in latter months. This data collection method and analysis allows for customers to benefit from the sales and promotions which interest them, rather than receiving mass amounts of junk like mail.
ReplyDeleteFor a consumer receiving these discounts would encourage me to purchase items even items I don’t particularly need but just want. Again with the target case, had I received coupons for diet books I did not need but wanted may encourage me to buy strictly due to the discount. Also receiving the coupons reminds me of the store and the items, which they have in stock in a strategic way due to the fact they know, I am already partially interested in the product.
One of the benefits that growing uses of predictive analytics presents to me as a customer that it allows me to receive discounts by the retailers. It means that the retailer may lock me in by providing seasonal discount after looking at my shopping habits. In the target case, customers shopping habit made it a lot easier for retailer to control the customer’s decisions by sending out catalogue and coupons to individual customers and pursue them to shop.
ReplyDeleteThis means that retailer who knows their customers shopping pattern can easily pick the future trends and may influence their decisions. This also raises some privacy issue for individual customers as you don’t want to give your personal information out to retailers who you do not know or trust.
An important issue for me as a customer is the security threat that arises with the increased level of information collected and stored by organisations employing analytics. The information collected may only be wanted for use by that one organisation in a specific capacity initially, but there is no guarantee that the information the organisation retains about myself and my habits would not be used for many other purposes. The organisation could use the information in some capacity that I may not be aware of or that I would not consent to if I had the option not to.
ReplyDeleteAdditionally while the organisation and I share a mutual interest in making sure the products and services I desire are available to me, we have competing interests in that they seek to maximize profit and I seek to minimize cost, tangible and intangible. For the organisation it is very often not worth investing in top level security for their information systems, while for me as a consumer I would demand that information about myself and potentially my family would be as secure as possible.
What this ultimately means is that should the rapid growth and use of consumer analytics continue the control I have over what information is collected and how it is employed would ideally increase as well. In a business environment it is not in the companies best interest to consider this issue from the customers perspective, which we can see in the case of the Target customer whose pregnancy was effectively disclosed to her family without her permission. Protection of my information and the information of consumers like me should therefore come from legislation or the oversight of a legislative body which holds the best interests of consumers as highly as organisations will their profits.