The e-commerce panel in the inaugural edition of the Pitch Analytics in Action conference held in Bangalore addressed the topic â€˜How customer targeting in India is changing by leveraging analyticsâ€™. The session moderated by Tushar Vyas, Managing Partner, GroupM South Asia comprised panellists Ashok Banerjee, VP â€“ Data Platform and Supply Chain Engineering, Flipkart and Kunnal Sharma, Business Head â€“ Global Remittances, Times of Money.
BanerjeeÂ started off with an interesting analogy: Imagine driving a car only with a rear-view mirror. Data performs the same function for business â€“ to predict and build a million dollar business. Ideally, it is possible to serve only 1/4th of the population so segmentation is key. Analytics is not about gut-feel any more.Â Â It is an enabler in decision-making but its unpredictability makes it an after-thought. The only guarantee is that every decision taken with the help of analytics will be better.
The market structure of an e-commerce player is such that every product category goes through a phase of life. What must be evaluated is which phase it is in.
- The word-of-mouth effect is literally exponential. A company must understand which product category will get around through word-of-mouth.
- Assess the shape of traffic expected on the website; which items sell instantaneously and which over a period of time.
- Susceptibility to positive/negative news.
Banerjee took the example of baby food to explain this point. While a million consumers must have recommended it, one negative feedback about an adverse effect can have far-reaching consequences. On social media, people usually hand out ideas but do not tell you what to purchase.
He left the audience with three key learnings:
- Big data is not Analytics; it merely enables analysis. Online, you can get larger, more accurate data unlike offline.
- Analytics is not reporting only. It should also translate into action.
- Insights are more than just a confirmation of the hypothesis. We ought to base a lot of our decisions on analytics.
Sharma addressed the topic â€˜Why business needs analyticsâ€™ drawing from the flip side and upside of using analytics in the Times of Money (ToM) context. ToM was the first across the world to come up with their â€˜Remit to Indiaâ€™ offering which enabled remittances from NRIs. A second offering â€˜Remit to Homeâ€™ provided the same service for NRIs of other countries. In the latter case, ToM had no inkling as to how the behaviour patterns of different communities. He emphasized that to succeed, you should know your consumer. In such a scenario, reliance on data can help understand the community and succeed. ToM began â€˜Remit to Homeâ€™ with analytics and then went with gut-feel.
Over the last 5-6 years, conversations about analytics have taken charge all around. From the business perspective, it enables a company to understand its customers and their habits. In the 90s, kirana store owners knew regular customers and their buying patterns. Today, consumers give companies the right to track their IP addresses, right to drop cookies; there is so much data that the consumer is giving away. It is time to move away from data crunching to analysing. Sharma gave the example of eBay while talking about drawing out a strategy. They churn out close to 170 million keywords with a bid amount for each every day to optimise on Google Adwords only to acquire consumers. They also preserve consumer data for 10 quarters, having a base of 100 million consumers and 300 million items to be sold. Targeting is not only for the registered user base but also for the regular database. The clincher to get into analytics is to identify â€˜who is my consumerâ€™. Another critical point is that analytics has to get into the executive level and should not be restricted merely to the drawing board. How we make sense of data is critical. Nimbleness in taking decisions is essential.
The e-commerce session was followed by a talk on â€˜Unlocking value through analyticsâ€™ by Pankaj Rai, Director at Dell Global Analytics. He started by quoting Michael Dell â€“ â€œNobody really wants big data; what they want is big impact and big results.â€ Analytics is a means to an end. Rai spoke about how Dell has always had a business model where all customer-centric interactions, visits to the website, etc were recorded since a large portion of their business is direct. They merely leveraged the data which is seen in the exponential growth with Dell becoming a $50 billion company within 15 years of set-up.
Analytics has evolved from being applied â€˜in pocketsâ€™ to â€˜pervasiveâ€™. In the pre-2000 era, analytics was nascent and typically went by a different name. It was primarily reporting, MIS and businessÂ planning â€“ which was being done in respective business units independently.
From 2000-10, analytics as an industry matured with more centralization and off-shoring. Analytics was able to get a wider footprint in theÂ business and started becoming key to business decisions. Post 2010, analytics is gaining broader traction. It will beÂ pervasive across functions with business units enabled to run basic analytics on their own.Â The analytics hub will focus on the complexÂ challenges. The analytics team is the strategic team who has to commoditize actions and push them into the business. Dell Global Analyticsâ€™ vision is to enable decisions and deliver value through analytics.
Analytics should be disrupting business and there should be cross-fertilisation. Dell wants to embed social media in the fabric of the company and across all business functions. â€˜Listen-Engage-Actâ€™ is the framework that is followed. They have developed an in-house Social Net Advocacy tool that monitors online conversations about Dell. It helps to assess the feedback around the company and obtain instantaneous feedback on key aspects regarding products and services.
Dell also underwent a channel transformation using analytics in 2007. Challenges faced across the value chain were addressed through analytics and processes were made less complex. For this initiative undertaken with DGAâ€™s cross functional analytics support, Dell has been shortlisted (among the final 6) for the INFORMS Franz Edelman Awards, considered as the Nobel equivalent for application of innovative and advanced analytics for business transformation. The final presentation will be made in April this year.
Pitch Analytics in Action was powered by The Hindu Business Line. Dekhooh was Outdoor Partner for the event, CIOL.com was the Online Partner, Institute for Competitiveness was the Think Tank Partner, Marketelligent was the Knowledge Partner, and 24 Frames Digital was the Webcast Partner.