My Four Year Old had a question about Big Data…

09/16/2013

By Srini Katta

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My Four Year Old had a question about Big Data…

Last weekend, I took my four year old daughter on a quick trip to Kroger (a grocery chain in Houston). She loves swiping the credit card at self-check outs.  As usual, when it was time for us to check out, I handed her my credit card and lifted her up to swipe the card. Completing her grocery ritual, she grabbed the receipt and started examining it with her curious eyes. There was a coupon on the back of the receipt for Huggies diapers.   My daughter looked at the coupon and surprised when she asked, “How do they know we have a baby at home?”  I was amused and amazed at the analytical capabilities of my four year-old.  To give you some background, we actually have an infant daughter who just celebrated her first birthday.  I smiled at her and said, “this is big data at work.”  I explained to her that the grocery store figured out that we have an infant at home by mommy’s purchase of diapers, and other baby products.  I told her the store probably has tools that can predict that we are a family of four based on our purchases and that the loyalty number we keyed before swiping the credit card tracks all the purchases we make.  

I explained that since we were out of town for three weeks and hadn’t purchased any diapers from Krogers during that time period, they might have sensed that we switched brands or started buying diapers from somewhere else.  Hence, try and encourage us to buy Huggies from Kroger, they gave us a coupon.  While she may or may not have been interested in this lengthy explanation, I thought it was really cool that she picked up on the actual practical application of Big Data.

Many of you probably notice that these days, almost every store in throughout the country, including big box stores such as Home Depot and Loewe’s, are giving free Wi-Fi.  I still remember the days in the not too distant past when you had to make a purchase or be an ATT wireless customer to get Wi-Fi access at Starbucks.  Now Starbucks offers Wi-Fi for free.  The stores are not offering free Wi-Fi just to be nice. Customers are giving these companies valuable information about their shopping behaviors, purchasing trends, and shopping frequency.  These companies will get insight into their competitor sites or apps and price comparisons that we may run while sitting in their store.  The store even recognizes that you are a returning customer when your smartphone automatically connects to the stores Wi-Fi network based on the MAC address of your device.  In a way, these stores are paying a very small price for the big data benefit they derive from our smartphones.  True, anyone can find out what data we are giving out about ourselves if you read the terms and conditions of the “free” Wi-Fi access.  But, lets honest, when is the last time you read that message?  

The amount of data being collected about us has grown exponentially with the advent of low cost storage solutions that work fantastic with big data apps.  We heard about how video analytics helped track the Boston Bomb terrorists at the speed of light.   The private sector is using much more powerful video analytics the moment you enter a mall or even a specific store in a mall. These video analytics apps are capable of finding your location within a store based on your device’s Wi-Fi connection and can send you a coupon if you are delaying making a purchase at a display.  They can even send you a coupon if they see that you visited a display twice and assume price was a barrier to your purchase decision.

Your likes on your friend’s posting in Facebook can be used to send a targeted email campaign or a coupon to influence you to make a buying decision.  It’s no surprise that Facebook’s stock price rocketed up once they were able to increase Facebook mobile apps usage and push more ad content effortlessly.

We are all concerned about privacy when we read about NSA tracking our phone and internet activities. However, knowingly or unknowingly we are already giving away a lot of this information!

Folks, remember, there is no free lunch in this economy!

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