Deciding which products to manufacture used to be a make-or-break skill for businesses. Now though, big data is making it much easier for companies to give customers what they want.
Chinese online retailer Alibaba has been keeping track of what consumers are talking about, what they are searching for, and most importantly, the products they are unable to find.
Analyzing data from more than 600 million monthly active users, Alibaba has identified gaps in the market and alerted retail companies eager to create products to fill them.
It has helped Mars create a new chocolate bar, given Unilever information to develop a range of pollution-beating cosmetics, and also advises companies on how best to market their new products.
As one of the world’s largest e-commerce companies, Alibaba is favourably positioned to discover the wants, needs and aspirations of customers. In addition to its major online shopping platforms – alibaba.com, Taobao and Tmall – Alibaba Group Holding has many other assets including online payment platform Alipay, China’s biggest digital advertising business, and its own hybrid version of YouTube and Netflix (Youku).
At Tmall Innovation Center – the company’s market research department – analysts have access to a wealth of data on consumer behaviour and preferences, making it one of the biggest focus groups in the world.
Duan Ling, director of brand marketing and head of the centre, told Bloomberg: “We can see where there are blank spaces and unmet needs in the market.”
Big data is providing companies with new tools to monitor and analyse consumer behaviour, which is changing the way products are conceived and manufactured.
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Know your customer
Technology continues to transform the manufacturing sector as the Fourth Industrial Revolution gains pace. The internet of things (IoT) connects devices, services and user information like never before, allowing companies to collect vast amounts of market information.
According to the World Economic Forum white paper Technology and Innovation for the Future of Production: Accelerating Value Creation, 70% of captured production data isn’t used.
Artificial intelligence (AI) enables companies to make sense of the overwhelming amounts of data harvested, which then helps them better understand their customers and make more informed business decisions.
As the chart shows, IoT investment is increasing rapidly. The IoT and AI can help streamline processes from the shop floor to customer delivery, boosting efficiency, improving quality standards and predicting production or maintenance problems before they happen.
IoT technology allows manufacturers to carry their quality control processes into the homes of customers. Products with sensors embedded in them can provide real-time data on how, when and where a product is being used, throughout its lifespan.
Armed with valuable information on a product’s performance, manufacturers can design and build improved products that meet customers’ needs.
However, this also raises privacy concerns about how data is used and who controls it. Manufacturers that handle data carefully should emerge with a competitive advantage by earning customers’ trust, but may still be at risk of security breaches from criminals targeting personal information and payment details.