It Is All About Understanding Your Consumer Through Data and Analytics

Customer intelligence, Marketing analytics, Customer analytics, Consumer data....we come across all this jargon frequently these days, in an age where the importance of actionable insights has come to the forefront. The practice of leveraging analytics to better understand the customer or consumer has existed for decades but primarily has existed in silos from other functions. As technology accelerates, the evolution of algorithms and methodologies has also accelerated, allowing us to better use customer data.  However, two underlying issues remain - (1) Not enough data is being captured on consumer behavior (2) Marketing analytics is still done in silos. There is now an urgent need to interweave analytics in silos within organizations. Thanks to technology, enterprise analytics tools are available today that can help you create an end-to-end analytics process. SAPinsider will publish a research report, "Spend and Customer Intelligence," in December 2022. We coupled two different topics traditionally thought of as two different categories or buckets of analytics to highlight this aspect. But more importantly, there is a need to capture pure consumer behavior data. The Quest to Get More Data Amazon's acquisition of iRobot came as a surprise for some. Right off the bat, as you can see from the charts below, Amazon did not acquire iRobot for its revenue or income. At Amazon's scale, these numbers are trivial. What matters though, is the product and the future potential of what that portfolio of products can help achieve.

Source: Macrotrends.com

The acquisition is for innovation, which will help capture more consumer behavior data. Amazon was the pioneer when it came to being a customer-centric company. The intent was to put the customer in the center and design products, services, processes, and technology around it. An area it has made progress vs. its competitors is that it has effectively been able to tie customer intelligence with operations and supply chain analytics, eliminating the issue of the analytics silo highlighted earlier, thereby running one of the most responsive and agile supply chains networks. But to do that effectively, they also needed to answer a question many before Amazon tried to answer but failed.

What Does The Consumer Want?

To get the right answer(s) to this question has been a challenge for decades for companies across industries and around the globe. An important contributing factor behind the challenge to understand the customer better was that the means to garner data on customer behaviors, needs, and wants were limited. But then technology evolved, and the opportunities to collect data increased. Amazon has been leveraging technological advances to gather data on their customer for a long time. The plethora of devices they have been able to push into our homes serve a two-fold purpose. While it provides us, as consumers, the products and associated convenience we need, it also provides Amazon the data points they need on our behavior (of course, after we consent to share the data). This acquisition is another key step in that area. Insights Through Innovation Whether it was the smart fridge idea or Astro, my postulation has always been that these new innovations, while primarily aimed at providing consumers with innovative products, also provide Amazon with consumer behavior data that no other company may have access to in real-time. My take here is that this shopping essentially gets Amazon a product they can "tweak" to understand their customers better, while Astro is still in the development pipeline. Roomba is a great product with some advanced technology features. But with the current features, it will not be the treasure trove of data that Amazon wants. They want to "look around" in your home (after taking all the due permissions, of course), and that is what Astro, a product currently in development, is about. Stay in a home for a few hours while everyone does their daily chores and observe them, and you can understand a lot about the needs and wants of all those who live under that roof. A consumer goods company that can get the capability to collect that kind of data will be extremely difficult to compete with. And Amazon wants to be that company. Synergies with Industrial Robotics Amazon has been investing in innovation in its warehouse robotics arm (formerly Kiva robotics), and with this acquisition, the opportunities to do some interesting cross-innovation emerge. There are many opportunities to infuse some features of warehouse robotics that can help Roomba capture some previously uncaptured aspects of consumer behavior. So Roomba will see modifications in the coming years. I expect a version with a more advanced camera as well. This camera will be more evolved than the one currently used to map the area and landmarks by Roomba. That evolved smart camera is the key- the most important feature in my opinion. But the follow-up question you may have is: What type of data can Amazon collect, and how will they leverage that data?

Data Collection and Analytics

Over a period of a few years, Amazon has been working on many different technologies that can be accommodated in Roomba. Another key aspect you need to keep in perspective before we review data points is that it is about the ecosystem ode devices in your home. The complete picture will emerge when data collected from various devices, like fire tv stick, fit, echo, fire tablets, Amazon.com, Audile, Astro, Roomba, etc., go through many sophisticated algorithms. From conversational AI to Deep Learning, coupled with advanced technologies that Roomba already has, can help collect data points on:

• Number of consumers in the household, their age groups, and gender (Camera and/or conversational AI)
• Household layout and specifications (Roomba can already map an area. Combined with a smart camera, it can capture additional details. It can also capture details like what portion of the house is carpeted vs. hardwood)
• House hygiene (How frequently you clean, how many times Roomba's bin needs to be emptied in one cleaning cycle etc.)
• Product placement (Product brands that Roomba can scan and identify while it roams around)

These are some examples of data that can be collected, and the opportunity exists to collect many more. Still, the most important part is leveraging this data to make consumers' lives more convenient. And you can easily draw some examples from the examples of data points highlighted above. Part of A Product Ecosystem Combined with other Amazon products and services, like Amazon.com, these data points will help generate timely and tailored product recommendations. Let us take an example of the obvious cleaning products. Hardwood floor refinishing? Time for carpet deep cleaning? The bot "sees" a bag of a specific brand of pet food in a corner, and the next time you log in, you may see a deal on that item or a competing item recommended to you on Amazon.com. As you can envision, the opportunities to leverage the data are plenty. The foundation of infrastructure The most potent weapon here that Amazon is leveraging here is AWS. Tapping into consumer data in real-time across millions of households across the globe is a task of mammoth proportions. Fortunately for Amazon, they have the infrastructure to support it. And this highlights another key aspects. Leading cloud computing providers are typically leading technology companies as well. And then they have this massive infrastructure and cloud based offerings that they sell to companies across industries. The depth in technology, availability of an infrastructure that can support extreme innovation-these two are ingredients for them to explore how to gain more and more insights into consumer behavior. Even when they may not be the ones selling cookies and cream, the moola in that data is gigantic.