"Perfect Market Knowledge": No Replacement for Great Ideas
posted by Geoffrey Gifford ~ 03/02/14
Category: Marketing
A few years ago I worked for the retail division of a large entertainment company in California. Every week we would have a large marketing meeting involving 20 - 30 people. We would all show up with spreadsheets and presentations. Most of my week was dedicated to producing a report for that meeting.

That's an expensive meeting!

We would all ponder the numbers and try to anticipate where the market was heading. That team was made up of people at the top of their professional game working for the top company in the sector.

But in reality we were reading the tea leaves.

By the time the numbers came in and we put together the reports and had the meeting and discussed the response the customers had moved on. It was a game of reaction after the fact.

In the end it was the Chief Merchant (a kind of special person)  to give Soloman-like directions and we would all scuttle off and make it happen.
The accuracy of their directions had more to do with the gravitas and conviction of delivery than with any real insight.

If the strategy worked they were a genius with a 'golden gut' !
But let's also say that success has many fathers but failure is an orphan. The half-life of Chief Merchants is short and/or volatile. Viz: Mickey Drexler.

A few years later I worked with a fast fashion label - same deal. The buyers read magazines, tried to predict color trends. They were all breathing the data exhaust and guessing.

Fast forward to the present.

Web traffic, social media and network-aware point-of-sale systems all provide real time market data. Even in-store behaviours, which has always been anecdotal data at best, is being quantified. The problem is not collecting the data. The problem is knowing what to do with it.

We've all read the articles about how Zara, TopShop, Burberry and Uniqlo track and respond to trends in real time. Zara has floating factories creating trend-right garments whilst in transit! These retailers lead the way with large capital investment in systems.

But if we have learnt anything about the internet it's that technology is democratised faster every year. What cost $1M to implement 5 years ago is a downloadable app today.

Every time you are reading a report ask yourself - Is there a decision that can be automated here?' If the answer is yes, then you could and should be doing something more value-added.

Market automation isn't new. High frequency trading has been dominating the stock market for several years. And whilst there has been some (ahem) problems, no-one really believes going back to human trading is an option. No pun intended.

Automation between customer behavior and retailer response moves us closer to "perfect market knowledge".
The downside is that "perfect market knowledge" also produces an echo-chamber of customer-driven decision making. 

As Henry Ford said - If I'd asked people what they wanted they would have said "faster horses".

Data is not a replacement for inspiration and innovation. Let the machines do what they do best and free yourself to think on a higher level.

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