The Importance of Big Data in the COVID Era
The global events of 2020 drastically changed consumer decision-making and how users interact with brands. The abrupt shift in consumer behavior created a deficit of information amongst even the most established organizations. As the pandemic disruption continued, firms from every industry approached customer data from a cold-start position – as if they were entering a new market or audience segment. Companies needed to respond quickly in order to acquire the data they needed to maximize their marketing and investment strategies. With the help of big data, firms were able to collect, analyze, and implement data results at a fast and reliable pace.
As consumer trends continue to fluctuate with the changing socio-economic landscape, big data may become the tool businesses rely on to sustain their profitability and optimize their digital marketing during the COVID-19 era.
Why the Big Four have been pandemic-proof
While most companies have struggled to emulate their pre-COVID success during the pandemic, the Big Four – Google, Amazon, Facebook, and Apple – have been able to actually grow. From March to December of 2020, the Big Four have managed to see their share prices rise by about 92%. While some may attribute that to the size of their media buying, arguably it’s because of their ability to leverage big data better than other companies. These behemoths are able to collect more data than almost any other firm in the market. For example, let’s take a look at Amazon’s use of big data to support its dominant digital marketing strategies.
Amazon’s big advantage
The utility of big data is directly proportional to the volume of information collected. What this means is that giant data collecting companies like the Big Four can more accurately track and interpret consumer trends better than any other competitor. In the case of Amazon, big data is particularly important when it comes to their Conversion Rate Optimization (CRO) strategies.
Amazon’s secret sauce isn’t necessarily its delivery efficiencies; it is likely their recommendation engine. The Amazon recommendation engine (RE) utilizes the massive amount of consumer data that online vendors have collected over the years to inform the purchasing decisions of their visitors. Why this is so important is because recommendation engines are extremely effective at up-selling customers.
A 2019 marketing study published by the Journal of Retailing and Consumer Services found that the effective RE the researchers produced for a mid-sized healthcare company resulted in a 32.79% increase in Average Order Value (AOV). That is a jaw-dropping figure. And one that firms from every industry should be looking at as an effective use of big data in digital marketing. The biggest takeaway is that there are hundreds of different ways companies can improve their marketing efforts by leveraging the results of big data.
Unfortunately, many marketers don’t have access to this volume of consumer data. Thankfully, there are agencies like Modus that help inform your digital marketing strategies and maximize your investment opportunities. To learn more about how our team can help you, contact us today.