Big Brands Meet Big Data – The Newest Innovator’s Dilemma

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Marc Parrish, Vice President, Retention & Loyalty Marketing, Barnes & Noble, presents at the 2012 Big Analytics Roadshow.

Big Data is moving too fast for Big Brands. They don't have the ability to technically pivot, to move quickly enough to take advantage of the astounding amount of customer information that's available, and make it part of their everyday practices. This poses a great risk to the world’s great retailers. Well-managed companies often fail because the very same management practices that made them industry leaders also make it difficult to assimilate the disruptive technologies that in the end allow others to steal their market.
With Big Data, the gap between merely sustaining your operations, and adopting disruptive technologies, is the difference between progress, or perish.

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Big Brands Meet Big Data – The Newest Innovator’s Dilemma

  1. 1. Big Brands Meet Big Data.The Newest Innovator’s Dilemma. Marc Parrish VP, Customer Retention & Loyalty Marketing, Barnes & Noble
  2. 2. Big Data is moving too fast for Big Brands. This poses a great risk to the world’s great retailers. Source: Google Insights News Search
  3. 3. They dont pivot……or move quickly enough to take advantage of the astounding amount of customer information thats becoming available. Most brands are sticking with their everyday practices of data management and consumption.
  4. 4. Meanwhile, Data is explodingAmount of Data captured, Percent Generated By Consumers stored and replicated (making it incredibly valuable) Source, IDC
  5. 5. The Innovator’s Dilemma Well-managed companies often fail… 20 15Sales High Margin 10 Medium Margin Low Margin 5 Disruptor 0 1 2 3 4 5 6 7 8 9 10 Time  …. because the same management practices that made them industry leaders also make it difficult to assimilate the disruptive technologies. In the end it allows others to steal their market from below.
  6. 6. Two Types of Innovations Sustaining Disruptive• Improve performance of • Generally underperform established products established products in• Meet demands of mainstream mainstream markets customers in major markets • Have new features that fringe or• Products vary in difficulty, cost, new customers value time to market, etc.• Established firms • Cheaper, simpler, smaller, more convenient to use • Entrant firms
  7. 7. Example (1910)Sustaining Disruptive } } If I had asked people what they wanted, they would have said faster horses. -- Henry Ford? ford cars manufactured 10,000 1908 472,350 1915 933,720 1920
  8. 8. Newer Example (1955)Sustaining DisruptiveLiving Room Stereo Transistor Radio $299 $80 ($1999 today) ($699 today)
  9. 9. Newest Example(s) (2000)Sustaining Disruptive
  10. 10. Newest Example(s) (2005)Sustaining Disruptive
  11. 11. The Yellow Pages Response
  12. 12. Unsustainable…. Clearly, manipulating data well can reap benefits, and avoid the grim reaper.
  13. 13. So…..what to do in this scenario?• Huge Amounts of Data No! Spend more, and get greedy!• Dramatically falling prices – Cost to store data in 2011 is 88% cheaper than in 2005.….. Spend less, get more? Source, IDC, EMC
  14. 14. Why is Big Data so difficult forBig Brands (and others) to consume? • No skill set to get inside it, absorb it, analyze it, mold it • No democratization of data across the company that allows business owners to incorporate the data into their plans • They dont full grasp how Big Data can be a competitive advantage!
  15. 15. What is the Risk?• As storage prices drive to a commodity -- the inevitable consequence of technology -- retailers will increasingly need to compete on knowledge of their customers, which Big Data provides.• Open APIs & Social Media makes customer preferences open to all, so disruptive competitors who can offer better customer insights will emerge (quickly!) and steal your customers….• This is “personality-based disintermediation”.
  16. 16. The math that createsinnovators (with anxiety)….
  17. 17. Source, IDC, EMC
  18. 18. Source, IDC, EMC
  19. 19. Source, IDC, EMC
  20. 20. Source, IDC, EMC
  21. 21. The Big Data Gap … It’s common to all retailers, and easy to overlook. It will be the difference between merely sustaining,The faster you close it, the more opportunity you find. and adopting disruptive innovation.
  22. 22. It’s progress or bone pile.
  23. 23. Thank You Marc Parrish linkedin.com/marcparrish mparrish@book.com

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