Big data and the consumer

In just a short space of time, we’ve gone from living in a world where data was a relatively rare commodity controlled by a select group of information gatekeepers, to one where massive amounts of data on every imaginable subject are available at the click of a mouse.

For organisations, both private and public, this has created a significant big data opportunity – using sophisticated analytical tools it is possible to interrogate and sift through the digital information generated by our online world to discover patterns and trends in consumer behaviour and sentiment, and then cross-analyse this with traditional types of data. As such, big data enables organisations to develop closer, more personal relationships with consumers, based on what they actually want rather than a crude demographic guess.

But how does the consumer themselves deal with this new data-rich world? Commentators in the media, government and academia regularly express concern about our ability on a personal level to live in a hyper-connected world, creating a popular perception of a society struggling to cope with information overload. But does this accurately reflect the reality of people’s day-to-day lives? Are consumers really drowning in a tidal wave of data or are they learning to navigate this vast ocean of information?

According to recent research from IBM, the latter appears to be nearer to the truth. Surveying over 2,000 individuals across the UK, the research shows that consumers are becoming more analytical in the way they use online and social media resources, developing formidable filtering and comparison skills in order to rapidly make decisions in all areas of their lives.

Compared to the world as it was just five years ago, there has been a radical shift in both consumer behaviour and consumer attitudes towards personal technologies. The growth in ownership of smartphones (and now tablets), the proliferation of data-crunching apps on these devices and a general increase in social media activity across generations have made a big contribution to putting individuals in control of the information they consume and share. From the days of the early internet, the web is now a more user-friendly place to be, making it easier for all of us to become data analysts.

The IBM research reveals a number of interesting stats and trends, for example:

• 62% of consumers think the internet and social media has made decision-making easier than five years ago
• Broadcast media (TV and radio) is on average five times less influential on decision-making than online sources
• Young adults ( 18–24 ) are twice as likely to use social media to research purchases as the 35-plus age bracket
• Young consumers also rate the influence of social media more highly than all other age groups when making everyday decisions
• Consumers now value online crowd-sourced word-of-mouth – such as opinions on review sites – as much as the opinions of friends and family
• Spelling and grammar have a significant influence on whether opinions are trusted or not – even among young adults
• Ease of access to information on a website is a lot more important to consumers than the look of the site

When browsing social media networks, forums and review sites, consumers are increasingly applying cross-checking and filtering processes as a matter of course. In particular, young adults are very comfortable with jumping between multiple online resources, polling opinion and cross-referencing information to research everything from their latest music download to their next job.

So what does this mean for those organisations trying to interact with people, whether as citizens or customers? For one thing, it shows that individuals are being empowered to make more informed choices than ever before. As such, if organisations want to develop personal relationships with their target audiences – and to remain competitive, they absolutely should – then they need to continuously monitor which other voices and factors are influencing their audiences’ decision-making. And so we come back to the value of big data.

IBM’s research clearly demonstrates that, rather than struggling to deal with information overload, modern consumers are proactively using the abundance of data sources available to them to be more savvy about the decisions they make. Ultimately, as consumers get increasingly analytical, so must the organisations they interact with.

Vivian Braun is Business Analytics for Smarter Commerce Manager at IBM