22 CGT | DECEMBER 2013 | CONSUMERGOODS.

COM
RE AL I T Y
MYTH
vs.
E XPE RT S DI SPROVE BI G DATA MYT HS
CGT Straight Talk
There is a lot of hype in the consumer goods industry,
but what is really happening or, better yet,
what is really even possible behind the buzz?
22 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
This edition of Straight Talk tackles big data, one of the hottest topics to
hit the business world. Notwithstanding the hype, the buzz around insights and
analytics has created a lot of confusion, particularly in the consumer goods
industry where companies have been mining data for years. So, is big data really
new or is it just about incorporating data from social media and digital marketing
into existing infrastructures? Let our experts help you debunk the myths.
SP E CI AL SE CT I ON
22.ST_Intro_v3.indd 22 11/22/13 5:25 PM
CONSUMERGOODS. COM | DECEMBER 2013 | CGT 23 23 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
EXPERTS DISPROVE
BIG DATA MYTHS
JON VAN DUYNE
Senior Executive Advisor
Booz & Company
jon.vanduyne@booz.com
www.booz.com
Consumer products (CP) companies have al-
ways wrestled with numerous data sources.
Over the last several decades, the evolution
of quantitative-based marketing decision-mak-
ing combined with the increased availability of
external data and computing power has forev-
er transformed marketing
from a eld rooted in gut
instinct to a discipline driv-
en by analytics related to
consumer insights. Today,
the average CP marketer
is dealing with signicant
amounts of data from IRI/
Nielsen, agencies, retailers,
media and internal sources.
The rapid arrival of big
data, however, is a chal-
lenge to existing process
and systems. The informa-
tion owing in from exter-
nal sensor data (Google,
Facebook, Twitter, blogs) and other social set-
tings (online forums, web feeds, SharePoint)
is potentially rich but arrives with a host of
challenges not the least of which is its unstruc-
tured nature.
While most CP companies accept the po-
tential value of this data, big data initiatives
often focus on purchasing software platforms,
incorrectly assuming that a technology solu-
tion is all thats required to solve the issue.
However, industry best practice suggests that
a more holistic approach should be incorpo-
rated by building data analytics capabilities
that address the following components:
Infrastructure: What kind of infrastruc-
ture should be created to scale and con-
solidate data?
Processes and Organi-
zation: What are the data
governance and organiza-
tional processes required
to manage the data and
analytics?
Software and Data
Solutions: What is the
right technology solution
to implement?
Analytics: What analytic
capabilities (models, data,
skill sets) are required to
generate the insights?
Insights: What are the
new consumer and market
insights that can be generated to create the
highest value for the business?
A well-thought out, comprehensive ap-
proach to building each of these com-
ponents will result in a data ana-
lytics capability that effectively
harnesses big data, providing
deep insights in consumer be-
havior and trends, ultimate-
ly yielding market-leading
consumer insights.
Big data initiatives
often focus on purchasing
software platforms,
incorrectly assuming that
a technology solution
is all thats required...
Consumers use of web, social media and mobile during the path
to purchase is creating potentially rich but unstructured sources for
information increasingly known as big data. The ability to process,
analyze, report and get insights from this data simply requires buying the
right software product then integrating that solution with legacy systems.
CGT Straight Talk
CONSUMERGOODS. COM | DECEMBER 2013 | CGT 23
23.ST_Booz_v3.indd 23 11/22/13 5:26 PM
24 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
EXPERTS DISPROVE
BIG DATA MYTHS
BHAVI SH MADURAI
Senior Principal,
Big Data & Analytics
CHARLES R. TROYER
Practice Director,
Consumer & Retail
For more information visit
www.csc.com
Big data made its debut in CPG in 1974 when
a pack of gum was rst scanned in Ohio and
when 20+ years ago Wal-Mart created Retail
Link; to suggest big data is new in CPG is
disingenuous.
The analogy to oil is
also misleading. Big data
will not yield an economic
transformation, like oil did
during industrialization.
To suggest otherwise is an
exaggeration at the least
and smacks of the hype
surrounding dot.coms.
Still, CPG companies
are immature in their use
of data. Largely defined
as downstream demand
data, it is managed in silos
across marketing, sales and category teams.
Most organizations use nascent approaches to
monetize the value of data by either going into
an endless strategizing mode or by jumping
on the technology bandwagon. Few pull it all
together to support wide-ranging decisions
that have signicant economic impact.
A better analogy for big data is mountains
containing rich veins of gold. Predictive ana-
lytics provides the extraction tools to uncover
the nuggets that CPG companies can mon-
etize. The missing link is the role played by the
prospector. The prospector quickly surveys a
territory to hone in on true veins of gold not the
fools variety. An enterprise intelligence strat-
egy plays the prospector
role, identifying key deci-
sions across the enterprise
that can be impacted by
big data.
The emphasis of the
strategy is to link analyt-
ics to the key levers of
business performance.
The enterpri se i ntel l i -
gence strategy enables
organizations to extract
value from structured, un-
structured and high vol-
ume data sets using an outcome driven and
data science-led approach.
Alchemists of yore tried in vain
to transmute lead into gold. The
hype surrounding big data today
would suggest a similar alche-
my. But, there is real gold in
big data hills. CPG should
intelligently prospect which
are the right ones to mine.
An enterprise intelli-
gence strategy plays
the prospector role,
identifying key decisions
across the enterprise...
Big Data is the new Oil declared Clive Humby,
co-founder of dunnhumby in 2006. This is a rallying
cry for big data proponents. Big data is neither new
nor revolutionary in consumer packaged goods (CPG).
However, the potential for big data and more importantly
predictive analytics has not been realized fully in CPG.
CGT Straight Talk
24 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
24.ST_CSC_v3.indd 24 11/25/13 10:37 AM
CONSUMERGOODS. COM | DECEMBER 2013 | CGT 25 25 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
EXPERTS DISPROVE
BIG DATA MYTHS
JANET DORENKOTT
Co-Founder & COO
Relational Solutions Inc.
janetd@relationalsolutions.com
www.relationalsolutions.com
At a recent conference, I heard a dozen
speakers interchangeably refer to big
data as e-commerce or digital marketing.
Those are components of big data, but the
terms should not be used interchangeably.
Unstructured big data refers to information in
the cloud, including e-com-
merce, digital marketing,
geo-spacial information,
RFID, mobile offers, video,
mobile wallets and pay-
ments, comments, tweets,
NFC (Near Field Communi-
cation), blogs, likes, sche-
matics, photos, infograph-
ics, clicks, QR codes, online
searches and much more.
Structured big data
mostly refers to internal
data, including shipments,
manufacturing, orders, in-
ventory, CRM, promotions,
POS, forecasts, spread-
sheets, syndicated data, etc.
Characteristics of big data include volume,
variety and velocity. Relational Solutions ex-
tends that description to include complexity.
Thats because, unstructured big data has sig-
nicant value, but that value grows exponen-
tially when you are able to leverage it against
your internal, structured data. There is a lot of
complexity involved in that process.
Some technology vendors claim there is
no longer a need for structured data. This is
untrue. Structured data exists in applications
from Oracle, SAP, IBM, Microsoft, etc. These
companies all offer solutions for unstruc-
tured data, but their structured solutions will
not be going away any time soon.
These two technologies can be merged
together l everagi ng a
sound infrastructure that
accommodates growth
and change.
What if you could: Use
comments to explain why
sales are down in certain
stores rather than sending
out a rep? Localize senti-
ment and identify whats
impacting sales in cer-
tain regions? Proactively
push offers out to cus-
tomers when they arrive
at the store? Turn negative
commentators into advo-
cates? Determine what
clicks are leading to sales?
Integrate Amazon sales with internal sales?
Big data is about much more than just
e-commerce and digital marketing.
Its about leveraging all forms of
information to streamline pro-
ductivity, understand custom-
ers better, improve public
perception, service retail-
ers better and maximize
sales.
Unstructured big data
has signicant value,
but that value grows
exponentially when you
are able to leverage it
against your internal,
structured data.
Big data is just about digital marketing.
CGT Straight Talk
CONSUMERGOODS. COM | DECEMBER 2013 | CGT 25
25.ST_RSI_v3.indd 25 11/22/13 5:26 PM
26 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
EXPERTS DISPROVE
BIG DATA MYTHS
JUSTI N HONAMAN
Partner - Consumer Goods /
Retail, Teradata
justin.honaman@teradata.com
www.teradata.com/
consumergoods
Whats most important to con-
sider when you think about the big
data concept is both the types of new data
sets and new data sources that are now
available for consumer goods (CG) and retail
enterprises. These are driving new analytics
and technologies, which in turn are driving the
business value of big data across an organiza-
tion to many users.
The entire organization can benefit
from big data analytics. The statistics from
McKinsey indicate that use of big data has the
potential of improving global productivity by 1
percent, which is a huge amount when youre
talking about a global business.
In the CG space, big data enables retailer
collaboration efforts. For example, big data
allows CG manufacturers to merge consumer
shopping behavior and social network insights
with loyalty and transaction data to understand
what drives path to purchase across customer
segments. This insight can lead to increased
engagement, thus driving sales and loyalty op-
portunities for both the retailer and the CG rm.
For example, sending a promotion to a cus-
tomers mobile phone that has been triggered by
her scanning a products QR code in a store can
be a relatively simple automated process that
doesnt require extensive analysis. However,
lets say the promotion is not only addressed to
the shopper but is specically designed for her,
based on factors including previous purchases,
online and mobile searches and even her po-
tential to be a high-value shopper, based on her
demographic similarities to other shoppers.
Such highly personalized promotions
would require bringing together data from
customer loyalty and digital analytics solu-
tions, shaped by sophisticated predictive ana-
lytics applications, and all tied into in-store
and mobile promotional tools for delivery
while the shopper is at the point of decision.
This means a signicant investment in not
only analytics but in good data management,
but it could also produce conversion rates
that would dwarf those of broader promo-
tional efforts.
Another example where speed is of the es-
sence is in the area of store-based fulllment,
which is becoming increasingly popular as
retailers realize the value of their existing store
network in getting products into customers
hands. However, operating such a fulllment
network requires retailers to establish busi-
ness rules that analyze all the costs involved
in fulllment and have a direct relationship
with CG suppliers to fulll specic orders and
ensure on-time, in-full replenishment.
Transforming raw data into timely insight
is at the core of a good BI strategy, and doing it
quickly even with high volumes of data is the
mark of a good big data initiative, noted
Aberdeen Groups Nathaniel Rowe.
CGers that can master not just the
velocity but the volume and vari-
ety that dene big data will be
well on their way to unlocking
its tremendous and to a
great extent still untapped
value.
Big data is an IT problem
not a business opportunity
CGT Straight Talk
26 CGT | DECEMBER 2013 | CONSUMERGOODS. COM
26.ST_Teradata_v4.indd 26 11/22/13 5:27 PM