In today’s fiercely competitive consumer goods (CG) marketplace, CG companies want to get closer to their customers and innovate. At the center of this quest is data. For those who successfully navigate and harness the storm of data in today’s digital era, its potential is tremendous.
More than any other industry, with its extensive investments in capital goods and fixed assets, the manufacturing sector stands to benefit the most from the value big data can provide. An IDC study, commissioned by Microsoft, found that manufacturers that take advantage of their data have the potential to raise an additional $371 billion in revenue over companies that don’t.
So how can big data increase innovation and develop new customer value?
Realizing the value of big data
Data and analytics were the focus of the 2015 Retail & Consumer Goods Analytics Summit I recently attended in Chicago. Hosted by Consumer Goods Technology and RIS News, industry leaders like Frito-Lay, MGM Resorts International and @WalmartLabs took to the stage to share thought leadership and their experiences on using data and insights strategically for business gains.
The opening keynote talked about data as “the new oil,” but that it is just a raw material unless refineries (analytics) convert it into something useful. This was the general consensus and theme for the Summit: it’s not just the data; it’s what you do with it. And a couple things became clear.
The first is that the industry wants to do more with their existing transactional databases and new sources of data like social media. It wants to move beyond reporting. It’s about understanding what that data means and how to act on those insights. As MGM put it, “data without action is just trivia.”
And while attendees debated the role of data scientists, another key takeaway was evident. The biggest opportunity is to put better capabilities in current employees’ hands, to give them the tools and insights they need to make better actionable decisions. There’s real value there. And I couldn’t agree more.
Making data actionable and accessible
At Microsoft, we believe that data—not just big data, but any data, whether large or small, structured or unstructured—has the power to unlock tremendous value for an organization. Our vision is to put data and analytics into the hands of the business user.
When its employees can apply rich information available both inside and outside their organization to uncover relevant, actionable insights, CG companies will be able to transform operations intelligently, drive growth for retailers strategically, bring better products to market swiftly, and craft personal consumer experiences creatively.
And we don’t think this should be hard. The key to stimulating smarter, faster, data-driven decisions lies within extending everyday business tools with powerful analytics and data visualization tools to anyone in the organization. Combined with the proper security, privacy, and governance policies in place, big data can become the basis for new waves of growth.
The opportunities of data-powered innovation
The hosts of the Analytics Summit shared some additional stats on the impact of analytics in this video: 1) A retailer using big data to its fullest could increase operating margin by more than 60 percent, and 2) Organizations adept at analytics enjoy 1.6 times more revenue growth and two times more profit growth.
So, where are the biggest opportunities to cash in? Here are the four high-value areas identified in the IDC/Microsoft study for consumer goods manufacturers:
- Employee productivity – running highly automated manufacturing plants, where robots, devices, sensors, and software are connected increases productivity exponentially. Analytics can also yield valuable consumer insights for sales & marketing teams to develop campaign themes, localization and direct engagements through connected products like smart vending machines and social networks and other digital channels.
- Operational improvement – improving operational efficiencies and lowering costs using predictive analytics; whether condition-based maintenance, better energy management, or improved asset management – saving millions.
- Product innovation– using data to enable greater and timelier insights into consumers’ changing demands, as well as to drive business growth with smarter product planning and innovation.
- Customer engagement – building better customer engagement models and uncovering new value-added and personalized services and experiences for consumers that go along with their product like contextual information for a video game they are playing or predictive maintenance for their car.
Real growth and efficiency gains
Predictive analytics are especially powerful. At the Summit, Frito-Lay explained how their company is using predictive analytics to become more proactive. It talked about its effectiveness for trade promotion management, combining historical data and projections to pick an in-store grocery campaign with the best chances for the highest profitability.
We also showcased an example of predictive analytics in action with a new digital signage-powered vending kiosk that our partner Clarity Consulting built for snack food vendor Mondelez International Inc. The Digi-Touch interactive vending machine can monitor itself for maintenance and inventory, engage with consumers, and offers a great digital marketing channel at the point of purchase.
A number of other industry leaders have gotten an early start on implementing data-smart strategies for real gains. In this video, Pier 1 Imports discuss how they are using Microsoft Cloud technologies such as Azure Machine Learning to predict which product the customer might want to purchase next, helping to build a better relationship with their customers.
Microsoft Dynamics and Azure are helping JJ Food Services with real-time data and predictive ordering to deliver a personal touch to its food retailing customers and ensure orders arrive fresh every time.
And when Trek Bicycle added Microsoft Power BI to their systems, they saw an opportunity to transform the way employees resolve their technology needs via their Helpdesk. Power BI has given them insights they never had before through the new dashboard feature, enabling them to be more productive, better allocate time and resources, and eliminate 12-15 hours a month in redundancy.
Big data brings big results for consumer goods
By bringing together big data insights, predictive analytics and powerful visualizations, consumer goods manufacturers can go way beyond reporting, opening new doors to significant gains in employee productivity, operational improvements, product innovation and better consumer engagement. They can also transform business models, providing new opportunities for revenue growth.
Ready to experience big results from big data but not sure how to start? Download the Microsoft big data overview. Share the Microsoft big data solution brief with your IT team.