"Data Science" is a term that not everyone is familiar with, so let's start by defining it: Data Science is an interdisciplinary field focusing on extracting valuable insights from large amounts of information. Remember that movie Moneyball? The Oakland Athletics making draft picks based on their analysis of players' statistics is a great example of Data Science in action.
But Data Science can be useful for more than just sports. UPS has been using Data Science since the 1980s to track their packages, Netflix uses it regularly to predict the viability of new productions based on its users' viewing habits, and IBM relies on it to optimally cool its facilities. Some of the biggest companies in the world are using Data Science to grow their profits by streamlining their operations and better forecasting what the future holds.
Small businesses too can benefit from Data Science. While it may seem that a small business owner couldn't possibly have the time or resources to invest in a process that sounds as complex as "extracting valuable insights from large amounts of information," let's examine three real-life examples that will hopefully get you to think again.
1. Farmstead Table
Far from industry titans like UPS, Netflix and IBM is Farmstead Table, an intimate restaurant in Newtown, Massachusetts. While owner Chad Burns is busy cooking, he's got a Data Scientist (of sorts) working round the clock: Swipely. More than just a point-of-sales system, Swipely integrates analytics to offer Burns otherwise hard to pin down details, like his best customers, top items and even the ROI on his marketing efforts. By collecting, storing and analyzing every transaction made at Farmstead Table, Swipely is giving Burns a depth of information that he would otherwise never reach.
An online used car marketplace based in Phoenix, Caravana is a start-up that was concerned with one thing: lemons. No one wants to buy a used car that turns out not to run, and Caravana didn't want to be selling lemons but was unsure how to weed them out. The company turned to Kaggle, an online platform for Data Science competitions, for the solution. Kaggle's users, with data regional customer preferences and model availabilities, were able to help Caravana avoid lemons while also finding better cars for $500 below what similar vehicles would sell for. Talk about a win-win!
3. Revolve Clothing
This Cerritos, California-based online clothing retailer has been collecting data on customer orders since its inception in 2003, but that information was not easily accessible. That changed in 2011 when its new chief marketing officer, Kobie Fuller, asked Custora for help. A predictive analytics platform for e-commerce, Custora was able to crunch Revolve's customer orders records and come back to them with valuable insights, like the fact that shoppers who made repeat purchases within 90 days were particularly profitable. Insight in hand, Fuller targeted new customers with an email campaign through the 90-day mark, generating 30 percent more second-time purchases!
By now the value of Data Science and the different ways it can help your small business should be apparent. We've ticked off a number of services you can turn to for you various needs, including Swipely, Kaggle and Custora, but if you believe your business requirements are greater than what a pre-packaged service can offer, consider adding a Data Scientist to your employees' ranks. Better yet, learn the skills you need to become a Data Scientist yourself. It's clear that Data Science will only be playing a larger and larger role in business as technology advances, and the only way to ensure your small business isn't left behind is to be on the edge of that evolution.
Source: Cate Costa.