SORRY, DATA ISN'T REALLY THE NEW OIL

The ability to derive significant monetizable insights by crunching big data is questionable

- T.N. Hari

Bengaluru: Ever since the world went online, one of the most common assumptions driving many a business (and business models) has been that customer data is a prized asset, and anyone with sufficiently large volumes of it would be able to monetize it in a big way. More the data, the better the monetization potential.

Listening to this, one would assume that all e-commerce companies are making money hand over fist and all physical retail chains are contemplating shutting down.

Everyone—from an analyst at a venture capital firm to a student in a B.School—would tell you that an e-commerce company can figure out if you have a baby at home (because you are ordering diapers) and can use this knowledge to get you to buy other baby products. Statements like these are common and sound cool until you dig deeper.

The underlying tacit assumption behind a statement like this is that you are currently buying these products from some other store because you didn’t know that this e-commerce platform has these products; you took the pains to visit another store but didn’t bother to even check on the platform using the search option. Or, probably, you as a parent were unaware that your baby even needed these products, and if you are shown these products you would buy them.

Let us take an online e-commerce company like BigBasket or Amazon. The amount of data that each of these companies have about their customers is mind-boggling. Every click on their app, or website, is tracked through sophisticated tools employing big-data frameworks.