What is Data Utilization? Explain the Importance and Challenges in Business.
There are many successful companies that
acquire various data such as customer purchase history and store sales data and
utilize it for business.
By utilizing data, you can efficiently
improve sales and formulate new strategies, which can broaden your business
horizons. Therefore, there may be some people in charge who are thinking of
using data to grow the company. Therefore, this time, I would like to introduce
the importance and challenges of data utilization in the business.
What can be achieved by utilizing data
By
leveraging data, you can open up many possibilities in your business. First,
let's look at what can be achieved by utilizing data.
Increase sales
Since the customer's interests and preferences can be grasped from the data, it is possible to efficiently improve sales by utilizing the data.
Examples of improved sales through data utilization
At major
mail-order sites around the world, we have installed a "recommendation
function" on the product purchase page to improve sales. The
recommendation function is to present the product of interest from the
customer's purchase history data. We are leading to other product pages with a
notation such as "People who purchased this product also purchased this
product" to realize cross-selling, which leads to sales improvement.
Creation of innovation
Creating innovation is important for corporate growth and survival in competitive markets. Companies that utilize data are said to generate statistically more innovation than companies that do not. If you are aiming to create innovation, you will find that data utilization is very important.
Cases that led to the creation of innovation through data utilization
There is a
case in which a beverage manufacturer installed "eye tracking data"
that analyzes the eyes of consumers in a vending machine and used the data to
improve sales.
Until now,
in vending machine product placement, it was common to install the main product
in the upper left of the vending machine in accordance with Z's law that the
consumer's line of sight moves in the shape of Z. However, when "eye
tracking data" was measured, it was found that many consumers' eyes did
not move in the shape of Z in vending machines. Moving our main products to
areas where the line of sight gathers has led to success.
Promotion of DX (Digital Transformation)
When utilizing data, ICT must be introduced. Therefore, it is suggested that the human resources and organizational reforms that accompany the introduction of ICT will have a stronger positive impact on companies.
Cases promoted by DX (Digital Transformation) by utilizing data
At bread
manufacturing and sales companies that have stores nationwide, the manager of
each store decides the production volume based on experience and sells it.
However, experience predicts that there are many opportunity losses due to
inventory risk and sold out.
Therefore,
in order to reduce inventory risk and opportunity loss, we decided to introduce
our own sales management system and use that data to determine the production
volume. Stores that used forecast data had sales about 2% higher than stores
that did not use data.
Improvement of work efficiency and productivity
By preparing the environment for data utilization, it is thought that work style reform can be promoted. In addition, by utilizing data and analyzing market and customer information, it will be possible to immediately start promoting new businesses without collecting information from scratch.
Examples of improved work efficiency and productivity through data utilization
A system
company has developed an app that utilizes big data for the taxi industry. The
past boarding positions measured by GPS are displayed on the map by day of the
week and time zone. Since you can check the actual vehicle occurrence position
in real time, it is also equipped with a function to know in which area the
number of taxi passengers is increasing.
By determining the time of day for customers who regularly travel long distances, taxi companies using this app can now efficiently acquire long-distance customers.
In
addition, the position and status of operating vehicles can be confirmed, and
the cost of the dispatcher can be reduced by searching for vehicles that meet the
conditions and notifying the request for pick-up in the order closest to each
other. This is an example that not only led to operational efficiency through
the use of data, but also led to the acquisition of opportunities.
Types of data that can be used for corporate activities
What kind
of data do companies that actually utilize data and produce results?
Next, I would like to introduce the types of data that can be used for corporate activities.
Customer data
Customer data includes personal information such as gender, age, name, and address, as well as data such as the content of inquiries and survey results such as questionnaires. This data is widely used in the manufacturing and information and communication industries, but it is also used in the commerce, distribution, and service industries, and is used in many industries.
Transaction data (financial / accounting data)
Data on sales and asset status. It is mainly used in the logistics / wholesale industry, financial industry, manufacturing industry, etc.
Purchasing data
It is sales record data that shows the purchase history of customers. Purchasing data includes POS data and sales data from EC sites. In recent years, the number of companies using data for data utilization has increased, and this data is widely used in the manufacturing, commercial, and distribution industries.
Various log data
Various log data are viewing log data such as access logs and videos. It keeps a record of operations such as the IP address and date and time of the user who accessed the website or video site. This data is widely used in the information and communication industry.
IoT data
Positioning system using artificial satellites Position information acquired from GPS and sensor data that senses and measures speed, temperature, etc. This data is mainly used in the infrastructure industry.
SNS data
Data from
SNS and blog articles are used to search for trendy and topical products on EC
sites. It is also the data that the number of companies using it has increased
in the last few years.
Nowadays, it is becoming mainstream to collect information through articles on SNS and blogs. Trends may also be born from articles on SNS and blogs, and it seems that they are being used as corporate data.
Another
option is to purchase data related to statistics. Since it is not necessary to
collect data from scratch, it may be a suitable method for companies that want
to start using data immediately.
Data Utilization Procedure
How do you
use the data? Here, we will introduce the procedure for utilizing data.
Data collection / accumulation
To utilize
the data, first collect the necessary data. However, it doesn't make sense to
just collect the data for the time being. By making a hypothesis and collecting
the data necessary for verification, you can collect the data you want.
Also, set goals in advance for what kind of data to collect and what kind of analysis to do so that you do not collect too much data.
Data visualization
Once you have collected the data you need, we will make it easier to see and analyze. You can use a graph format or make a list for easy viewing. Being able to visualize data makes it easier to understand the current situation and convey information at a glance.
Data analysis
After visualizing
the collected data, we will move on to data analysis. Let's explore the points
that can be utilized for business from the visualized data.
For example, if the conditions are met, is there regularity such as good or bad results? In addition, we will find outliers such as higher than a certain value, and causal relationships such as the result of B being caused by A.
There are various methods for analyzing data, such as cross tabulation, logistic regression analysis, and association analysis.
Utilization for business
After analyzing the data, we will develop strategies, plans, and execution measures based on it. Then, we will execute the strategy and plan.
Effect verification
We will analyze the data and verify whether it is really effective when it is used for business. Compare what has changed before and after executing the strategy. Check if the expected result is achieved. If the result is that the effect is not appearing, it is necessary to formulate and execute a new strategy.
It is very important to continue collecting, analyzing, and utilizing data, not just once. The data will be updated. If data utilization is completed only once, it may not be possible to formulate a strategy that suits the market situation.