America is a country based on entrepreneurship and innovation. Businesses, both large and small, strive to compete in an ever-changing landscape. With new technology, emerging patterns, customs, news, and events, it is difficult to maintain a revenue-generating business on a consistent basis. In 2013, we are provided with tools that are both web and cloud-based to aid in the generation of massive amounts of data. With this influx of information, business managers and executives have the insight to create specific marketing strategies and tactics that can reach potential consumers effectively.
Big data achieved from technology does not need to be used solely within big business and Fortune 500 companies, which is the typical consensus. Instead, small businesses -- those mom and pop shops, startups, and entrepreneurs -- have the ability to use such massive amounts of information to provide a product or service tailored more specifically to their market, respectively.
In regard to small business, "big data" is a term used to describe collected data from consumers in an effort to identify spending patterns and behaviors based on a wide variety of variables. Using this data to better plan store inventory, staff schedules or even store discounts can help businesses to grow revenue and stay current with their customers.
Big data is especially significant to smaller business because data and figures surrounding consumer interaction can tell very specific things including:
- Gender preferences
- Time/day spending preferences
- Trend buying (what are people buying most?)
- Social media interaction (what is being talked about, what are people satisfied/dissatisfied with?)
Smaller businesses can use big data in very specific, niche ways to reach a more targeted audience and buyer group. Understanding buying patterns for its customers, for example, can be crucial for small businesses. It takes the guessing game out of the equation when it comes to stocking shelves and buying supplies. Small businesses with information surrounding buying trends better understand what their buyers want and what they don't, thus alleviating extra costs spent on stocking shelves with products that won't sell.
In addition, big data fortifies small businesses' concept of their typical customer. Gender preferences are easy to track, which is especially useful for retailers. Also, shopping patterns such as what time of day your store is most visited helps staffers to know how many people are needed during time blocks. All of this makes planning and stocking easier, while giving business owners a clear understanding of their usual customers, which are the life blood of their business.
And with technology that tracks and manages local information, small business can effectively create and deliver comprehensive marketing and advertising strategies. Big data is living and breathing and, as a result, is constantly changing to meld with societal patterns and goings-on. When delivered this information -- be it social media activity to competitor openings and closings to buyer patterns -- businesses can represent the current standing of its community by developing effective plans.
The local business economy accounts for 70 percent of the United States' GDP. As entrepreneurship continues to thrive in this country, big data can add a layer of personalization for smaller businesses. Owners and managers of small to mid-size businesses are now able to answer questions that previously went unanswered. These include questions of how much of a product to stock, how many workers are needed for this shift, or even how to compete with other local businesses. Lacking the answers causes profitable growth opportunities to slip away. Big data analytics and tools are more affordable and available to businesses with smaller budgets and, with that, a competitive landscape is forming based on information from consumers provided to all business establishments.
Ultimately, as big data becomes more prevalent and analytic tools more affordable, it should be a priority for small business to embrace the big data movement. It's time to break the notion that big data can only benefit large businesses. Small businesses that utilize big data will have a stronger understanding of their target markets and will be able to better cater to customers and demand. Big data is not just for the big players anymore, but is a valuable asset for businesses of any size.
David Steinberg is CEO at XL Marketing.
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