Last night I told my son he could stream music to his tablet "from the cloud" (in this case, the Amazon Cloud). He paused, then said, "what is the cloud?" I replied, "a bunch of servers connected to the internet." Apparently he had visions of something much more magnificent. Another similar term is "big data." These marketing terms help to quickly convey topics but are oversimplifications that are open to many interpretations. At their core, those terms a shiny packages holding recycled ideas.
I see many headlines declaring big data changes everything, but it doesn't. Savvy retailers have been dealing with large volumes of data since the electronic cash register was invented. But the there have a been a few changes to the landscape that make big data a topic of conversation:
1. Computing power has caught up to storage volumes. Its now possible to more thoroughly analyze the copious volumes of data retailers have been squirreling away. CPUs are faster, sold state drives more plentiful, and new ways to store and search data are available. My iPhone is more power than the computer used in the Apollo mission to the moon.
2. Unstructured data is everywhere. The Web used to be where retailers published product information, but now users are generating the bulk of the content in the form of comments, videos, and "likes." The variety of information available to retailers is huge, and it meaning difficult to discern.
3. Everything is connected. Looking at a report from my router, there are no less than 20 active devices on my home network. We can track the location of mobile phones, tag products with RFID, and set our thermostats (I love my Nest) from a thousand miles away. Not only is there more data, but its arriving at higher velocity.
Careful readers will note the three Vs that help define so-called big data: volume, variety, and velocity. We now have more volume, more variety, and more velocity and different technologies to deal with them. But at the heart, the objectives are still the same:
Informed decisions
Accurate forecasts
Improved optimizations
So don't let the term "big data" throw you off the scent. Retailers still need to execute on the basics. But do take a fresh look at the data that's available and the new technologies to process it. The landscape will continue to change and agile organizations will always be reevaluating their approaches. You can just add some more weapons to the arsenal.
