Why do Procter & Gamble want to increase their market share of nappies and why should you and your business care?

To answer these questions I will start with a new phrase: big data. This is a term generally used to describe datasets so large and complex that traditional data processing is inadequate. It is said that the volume of data on the planet is doubling every 12 months and experts predict that there will be 40 zettabytes of data on the planet by 2020. I bet you, like my spellcheck, didn’t even know what a zettabyte (=10²¹ bytes) was. There is 1.7MB of new data created for every human being every second of the day! However, less than 0.5% of this data is being analysed – for shame.

In 2012 Starbucks became the first business to appoint a Chief Digital Officer to tie together the varied digital aspects a large corporation such as Starbucks face, from social media, to Wi-Fi and loyalty cards. It is a move that has been followed by L’Oreal and McDonalds among others and will soon be commonplace. This is because these digital aspects are able to mine data from their customers and enable the use of predictive analytics.

You will have seen it everywhere as a consumer. Being recommended a film on Netflix, receiving Tesco Clubcard offers and Facebook adverts are all examples of predictive analytics. The film Moneyball is about the Oakland Athletics baseball team that used formulas and modelling to select a team, despite the value that those with more experience placed on intuition and gut feel. That team broke the record that had stood for 55 years for consecutive wins in the American League regular season.

Is there opportunity for your business to be able to use predictive analytics from the data you generate?

If you’re Mr Whippy it’s fairly straightforward. If the sun is out, sales will be high today, I’d best stock up on flakes. For more complex businesses, looking out of the window will not suffice.

Procter & Gamble are running a promotion on Pampers in the US. If you sign up to their website you can print off vouchers to save $1.50 on a pack of nappies, because knowing whether someone has a baby is valuable data. Procter & Gamble can determine the age based on what size nappies the voucher selected was for and then they have years of informed offers to be able to make. In two months’ time, vouchers on a larger sized nappy might be welcome. In one year’s time the child will need shoes. Four years after that a bike might be on the parent’s mind. Thirteen years later discounts on washing powder, just as the child is perhaps off to University wouldn’t go amiss (and neither would some lessons on how to use it).

A parent’s desire to save $1.50 for every 48 times her baby goes to the toilet could mean they are in the grip of targeted advertising for the next two decades. This appreciation of the value of data and using it effectively is what will distinguish between an average and a good business in the future.