Amazon and Anticipatory Shipping – Analytics On the Move

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Predictive analytics and big data continue to be in a state of flux when it comes to implementation and gaining actionable insights. A recent survey by KPMG revealed a major disconnect among those in the C-Suite, who realize the value of big data but are unsure how to successfully implement and manage the data resources.

We live in an increasingly data-driven world where data & analytics have the potential to revolutionize the way we conduct and manage business operations across the entire enterprise," said Mark Toon, CEO of KPMG Capital. "From CEOs, to CFOs, CIOs and CMOs, the challenge for today's executive is understanding how to draw actionable insights from data and turn them into tangible, genuine results.”

Even though 99% of those CFOs and CIOs interviewed consider data & analytics to be important to their businesses, 75% find it difficult to make decisions using the information.

Why is it such a challenge to draw actionable insights from data and turn them into measurable results? Perhaps it is the fundamental lack of understanding around what your challenges are and addressing them with the right data.  

Amazon Data Ana.com logo RGBalytics on the Move
Jeff Bezos and Amazon have continued to push the boundaries of innovation when it comes to customer service. The “delivery-by-drone” concept is certainly intriguing and takes online purchasing and delivery to a whole new level (we’ll see if it gets off the ground). But it was this week’s announcement of a patent for “anticipatory shipping” that really caught my eye.  

The concept takes data from wish lists, product searches and returns and browsing patterns, analyzes for shopping patterns, and predicts what goods customers will ultimately order. The goods will then be held closer to where the customer lives, reducing shipping time once it is ordered. Bezos wants to ensure the “last mile” the product travels is short and is just as efficient as the “first mile”.

Amazon is using data - lots of it - to strengthen their already-excellent customer service and competitive edge in order to deliver strong shareholder value. Like most successful business leaders, Bezos is never satisfied with the status quo. And although both the drone delivery and anticipatory shipping are still in testing, clearly “business as usual” is not a part of his vocabulary. 

Identify the Challenge – Let Data Do the Work
As I dig further into the KPMG report, this statistic jumped out at me: “56% of respondents changed their business strategy to meet the challenges of big data.” This seems counterintuitive to me. Why? I guess it’s because I see data as a means to address the challenges retailers face, not a challenge in and of itself. If data is the challenge, then perhaps the focus is not on the right challenge the business is facing.

As a former retailer turned analytics junkie, I witnessed first-hand the challenges retailers face. First Insight was started with a question: Why? Why do more than 50% of new product introductions fail? Why do retailers miss the upside on successful products? Why do retailers continue to use the same methods for selecting and pricing new products as they did 20, 40 or even 100 years ago?

This leads me to the reason why the number-one read article in the business section of WSJ.com in 2013 was about Black Friday and the “games” retailers play with discounts and promotions. Although millions of consumers still hold out for Black Friday “deals and door busters,” the number of consumers who live by the motto, “I don’t even get excited unless it is 40% off,” is on the decline. As you may know, the article highlighted First Insight as a solution to these challenges.

The change in what Black Friday means after so many years signals a significant shift in the way consumers shop and therefore how retailers should approach their new product selection and pricing process.  

The Right Data in the Right Hands drives Success
Historical data, surveys, focus groups and conjoint studies are the traditional ways retailers select and price new products. These methods can take a tremendous amount of time, money and human resource to collect and analyze and often times do not yield actionable data that drives results. 

54% of respondents in the KPMG survey stated that their greatest barrier to implementing a data & analytics strategy was an inability to identify what data to collect. At First Insight, we have identified the data that needs to be collected in order to create actionable insights that deliver bottom line results and shareholder value. Engaging the consumer with a more direct and analytical approach is the key to staying ahead of consumer demand. True demand sensing requires a shift in the way you implement the voice of the customer. The right approach takes you from listening to your customer to thinking like your customer.

Our experience has translated into satisfied customers that use our data to ensure they sell more winning products, minimize or eliminate the negative affect of losing products, take advantage of the upside and see data -the right data, - as their ally. 


Retail Analytics  pricing  Big Data  analytics  Amazon