Computers can now collect so much data and personal information through consumers’ online, mobile and other digital activities that companies will soon be able to predict exactly what products we will buy and how we will buy them. They’ll also know our entertainment preferences and favourite restaurants, and when and where we’re most likely to impulse shop. This means Big Money for companies with access to Big Data.
So goes the argument from many Big Data analysts. But while no one is arguing that reliable consumer data isn’t a useful tool for smart businesses, Peter Fader, co-director of the Wharton Customer Analytics Initiative at the University of Pennsylvania, believes that some of the claims made by Big Data gurus are a little exaggerated. In a fascinating interview in MIT’s online magazine Technology Review, Fader refutes the automatic notion that, “if you can give me more data about a customer…then I can pin down exactly what this person is all about.”
Not all data is created equal where consumers are concerned, Fader argues, a distinction that often escapes the “Big Data zealots” who want to save info on every tweet and coffee purchase because “you never know when it might come in handy for a future data-mining expedition.” There are no quick technological fixes, no matter how many mobile and social media platforms a company can access. “There’s no question that new technologies will provide all kinds of genuinely useful measures that were previously unattainable,” Fader says. “The key question is: Just how much of that data do we really need?”