There are a lot of companies such as McCormick and Nike that are successful with digital strategies which owe their excellence to the constantly reducing cost of data storage. Without the price reductions it would not have made their success a possibility.
The ‘Dark Ages’ as we commonly refer to them would have literally been considered dark if we were to compare them with the advancements made today.
Since the invention and commercial use of light, we can say that the cost of lighting has definitely decreased since the early 1300 by up to 10,000 times! This is based on the research carried out by two British economists. The price of the ability to see was once a limitation on business in regards to location and timing. Light is no longer viewed as a constraint in this era but an enabler.
Keeping this information in mind, let us reintroduce the data concept. As per the Deloitte’s Centre for The Edge, the price of data storage dropped to $0.03 per gigabyte from $569. The reduction happened over the course of two decades, from 1992-2012. The difference is almost 19,000 times. In other words, in twenty years, the price of data storage dropped by twice as much as the cost of provision of light ever since the introduction of torches.
It can be taxing to accept a new mode of thinking with regards to data as a facilitator of growth compared to the chief information officer (CIO) who will grasp the possibilities this new venture provides.
For instance, Nike’s embrace of the data platform has proven to be beneficial. Now the millions of people who are potential and actual users of the Nike products are freely giving information regarding their exercise location, routine, goals, time and reasons. This started by offering a Nike+ account free of charge very much like what Facebook did.
The reason for citing Nike as an example is because it is a product company that has managed to successfully create a data rich relationship with their consumers. For consumer packaged goods executives who are just starting to think about their digital strategy, Nike offers a good example. The problem noticed with such companies is that they choose to focus on the downside of it citing: if there are millions of accounts, every non buyer costs money.
Although what works for one company may not necessarily register the same results if tried with another company, the lesser cost of storing data coupled with the developed cloud based resources enabling maximization of resources allows the enterprise to view data as a help instead of an additional burden.
Great deals of companies have invested in marketing and advertising and they often envy Nike’s advertisements because they are powerful and effective. If we breakdown Nike’s strategy we will find that up to 40% of their Print and television budget is now directed towards digital. The results of this shift would suggest that traditional marketing is heading out and data is now heading digital as it is a much better option.
In the event that a company deals with Amazon, Amazon gets the data and it is thus familiar with the company’s customers and market than the company itself. Hence for a company that uses customer insight to get the competitive edge it requires a game plan to enable it to match the scale and pace of market research by learning to make use of data and analytics in the way Amazon and other corporates do.
What I mean by this is that, while you can still buy Nike shoes from Amazon, Nike+ will give a pole position allowing them to understand the customer, the up and coming trends, as well as consumer athletes in general.
Another fine example that is quite relatable and also shows the importance of digital data is McCormick and Company. The company CIO, who recently spoke of his digital journey, had a lot to share on the subject. From the research carried on the McCormick’s market, results showed many people struggled with finding interesting food that they actually enjoyed instead of eating the same dull or boring foods.
Naturally, the CIO and the CEO saw this as a chance to try the new digital strategies. This new venture brought forth: FlavourPrint. It combines the new with the old and that is, the data science competency they built, with the flavor science they already knew. Needless to say, this new venture has so much promise that it was spun out as an industry wide platform play.
The vision for the company and the data strategy play a huge role in the company’s growth. Data storage prices now at the lowest price they have ever been should be embraced by the companies and embrace it and use it to their advantage. By collecting the data storing it and using it later for research and analysis could actually boost the company’s growth and monitor some things that would otherwise be missed.