Smart Enterprise Magazine

Volume 8, Number 1, 2014

Issue link:

Contents of this Issue


Page 18 of 23

and information to make better decisions." The financial institution is among a small cadre of companies using Big Data on a regular basis. And when they do, says Randy Bean, Managing Partner at NewVantage Partners LLC, great things can happen. Bean says that Big Data lets the data tell the story. Companies can create an analytical "sandbox" where they can put all the data in and see where the correlations are, where the patterns are, and which data is most important. Most critical, Bean says, is that there's a 10-to-1 cost savings and 20-to-1 time savings in terms of the ability for companies to accelerate time-to-answer. " With Big Data, the consequences of decisions can be much more impactful. You no longer have to rely on what people tell you," he says. "Especially if you know how to ask the right questions around smaller pieces of data." Reaching Out the Right Way Some industries are having more success with Big Data than others. Financial services is one such industry, and Capital One is a prime example of a company using Big Data to shape its customer offerings; those efforts are helping the company, its customers and its partners. Using what Alexander calls a deal optimization engine, Capital One is analyzing its custom- ers' spending patterns and demographic data to determine which offers to make to whom, and in which channel to make them, he says. "Using the data, we can send a customer an offer that might show up on their mobile phone," he explains. This not only generates value from additional revenue for Capital One, but it also helps improve customer experience. "This is really about business insight cycle time—how fast you can come up with an insight and then apply it in your business in a way that generates value," he says. "More of that value is going to come from a better customer experience that shows up with more revenues because of retention, because of usage, because of cross–sell, and secondarily you'll get cost savings and operations because we make better decisions on the operations side." This is something every industry can benefit from, says Bean. "In the financial services world, customers might walk into a bank branch or go online and use services, but until recently, it was unclear how those activities contributed to someone becoming a customer," he explains. "Behavioral data is the richest data you have, and it's unique to every firm. Only you know the products and services your customers are buying." Bean suggests merging behavioral data with financial and revenue data as a way to better inform your marketing, sales and R&D departments. This is something you can do in-house or outsource to a Big Data consultant. Capital One is doing its analysis in-house, and while today this work is done in the company's nine data centers across the country, the company sees cloud technologies—both public and private—as a preferred destination for its application workloads. "We are anticipating leveraging cloud technologies and capabilities in our Big Data implementations," explains Alexander. "We would also anticipate leveraging public cloud for experimentation and innovation in the data space. The extent to which we leverage it for production usage is dependent on getting more comfortable with the security models and capabilities that the public cloud is providing." The Customer and What's Right Retail is another industry that's been using Big Data successfully for a while. Bohemian retail brand Free People, part of Urban Outfit- ters, Inc., is an example of a company finding success with its Big Data projects. Free People wholesales its products to more than 1,400 specialty stores and sells direct to consumers in its 89 standalone retail locations. Jed Paulson, the company's Director of eCommerce and Marketing, has a serious weapon when it comes to figuring out which dresses, jackets and accessories will sell best on its website, for example, and how to best use social media to improve the bottom line. He and his team tap more than 15 terabytes of data and 30 million records to verify and validate the many programs the company launches. Paulson's analytics team of six is comprised of people with deep technical skills. They meet weekly with employees who handle other key functions within the organization, including the person who "owns the data and is its caretaker"—the CTO. "We're looking at propensity models—figuring out if people are likely to buy or return a specific SKU—as well as the algorithms that power our product recommendations," Paulson says. The biggest challenge for the company is the fact that they have five different brands, and the corresponding data for each is stored in data silos. "We needed to put in the hours and find a way to bring structured and unstructured data together without having to build more data feeds," he says. Big Data is informing everything from how the company's site looks to what content it serves up to whether or not to add a video overlay to a page. "We're using data to guide everything," Paulson says. The results are impressive. The brand's net sales in the first half of 2013 were more than $180 million—up from more than $135.4 million in 2012. Comparable retail segment net sales, which include stores open at least a year and the comparable direct–to–consumer channel, in the second quarter— increased 38 percent at Free People, besting all the other brands in the Urban Outfitters' portfolio. IMAGE: COURTESY OF FREE PEOPLE Smart Industry Jed Paulson, Director of eCommerce and Marketing at Free People 2014 • SMART ENTERPRISE 19

Articles in this issue

Archives of this issue

view archives of Smart Enterprise Magazine - Volume 8, Number 1, 2014