FutureScot, 28 April, 2016 2 - Page 15

BIG DATA 28 April 2016 FUTURESCOT 15 The Netflix approach to retail marketing The decades-old audience segmentation model for marketing is broken, says the co-founder of Big Data for Humans. Welcome to the era of the ‘networked customer’ BY KEVIN O’SULLIVAN Midway through our conversation Peter Ellen pauses to read me a quote. It’s from Todd Yellin, Vice President of Product Innovation at Netflix, who said: “Geography, age and gender, we put that in the garbage heap. Instead, customers are grouped almost exclusively by common taste.” This is part of a new way of thinking in the world of customer marketing, an approach in which Edinburgh and Paisley-based Big Data for Humans is carving a niche for itself. ‘Martech’ – marketing technology – is busy turning decades of customer segmentation learning (classifying people into groups by labels such as ABC1/C2DE which indicate the top and bottom socio-economic tiers) on its head. Instead, marketers are starting to pay very close attention to data, and how it can unlock much greater insight into their customer base. Who would have known, for example, that for one client of Big Data for Humans – a leading department store – that their most valuable customers for fashion retailing were men? Women account for more in terms of sales volumes but the most value came from discerning male customers. “The really interesting stuff when we do work with the clients – there’s usually some quite big surprises as to who their customers are,” says Ellen. “The problem with the idea of a typical customer is that it’s usually a stereotype. The real customer is never as trite and stereotypical as the initial assumption is. “What we did in Big Data for Humans was that firstly the methods for understanding who your customers are were broken for lots of enterprises. So essentially, in order for an enterprise that trades across channels to build a traditional customer insights stack, they nee