“What the heck…” I hear you say. “What do chainsaws and mattresses have to do with technology?” With the increasing power of IT, our common sense, business acumen and experience will no longer be applied in the way it used to be. Data is the new oil. It is the commodity today and into the future from where vast riches will flow. The Internet of Things (IoT) will simply accelerate the value of data and our greatest quest will be to tame and leverage our data beast.
This data phenomenon is not that new. Large (and small) retailers have been collecting and mining data associated with the shopping experience since the late 1990s. The introduction of the loyalty card has accelerated data collection and value even further. Just the other day I learnt that using a combination of big-data and artificial intelligence (machine learning) retailers are now able to forecast country level macro-economic data on a quarterly basis with eye watering accuracy. It’s not a surprise really as retail spending has always been an indicator. We’ve managed now though to break through to a whole new level and the more data, the better the analytics, the greater the insights, the better the business.
So what’s the deal with chainsaws and mattresses?
In the mid-2000s retailers in Minnesota did some analysis on buying patterns and experimented with product bundles. The data suggested a winning combination would be a chainsaw and mattress. The bundles flew off the shelf, profits soared and customers smiled. It only lasted for a few months though and sales dropped off. It was hard to explain. However it demonstrated the power of data as no ordinary human would have joined enough dots to determine that bundle would sell.
So what was driving this connection?
A typical weekend getaway in Minnesota involves some time in a cabin by a lake. There’s no beach, so a lake must be the next best thing! Winter in Minnesota can be very cold and with lots of snow. Early spring the snow melts and the weight can cause trees to fall over on to cabins. Not being terribly strong, from time to time a tree breaks through the roof. The owner looking for a break and celebrating the end of a long, cold winter, takes a trip to their cabin. Arriving they are dismayed to see the roof of their cabin caved in and bedding soaked from the rain. No responsible owner would just leave things as they are so heads to the closest town looking for something to remove the tree and a new mattress to sleep on.
A chainsaw and a mattress. The power of data.