In May 2017, Zimana founder Pierre DeBois was interviewed at InteropITX in Las Vegas. Pierre stopped by the Information Week News desk to speak with Jim Conolly, Executive Managing Editor, offering his insights on All Analytics, an analytics online community, and on the state of business intelligence today.
You can also check out an article Pierre specifically wrote for Information Week. The post focuses on the growing shift in retail to mainstream e-commerce. It examines Amazon and compares its status in retail today against Sears, a stalwart department store which had a similar ascendancy in its heyday.
You can read the article, Amazon and Sears – Tales of Two Retailers, here.
We hear the phrase Mar-tech in webinars and see it in posts everyday. But how does a marketer gain an appreciation for Mar-tech, especially when training budget for any marketer has been exhausted for the year?
One way is through participating in a hackathon. I should know – I participated in one, the AT&T Hackathon in April 2016. Through it I learned how hackathons offer valuable education time that rival the best paid training sessions or bootcamps.
A little background about the AT&T Hackathon: It was a 24 hour affair hosted at Launch Fishers in Fishers, an affluent suburb of Indianapolis. Launch Fishers had been in operation for a few years, and expanded that year to accommodate more entrepreneurs and startups.
The challenge for participants was to address a civic challenge, outlined by civic and business mentors. The goals was to build creative tech solutions that could help lawmakers, law enforcement and emergency services better understand and solve Indiana’s heroin and methamphetamine problems. The State Police Drug Lab and Marion County Emergency Services provided data related to the civic needs and services mentioned in the opening presentations, but participants were free to use data from many sources.
I cover two main benefits in this CMSWire post on the hackathon – you can read my experience there. Many of the lesson apply to developing a coherent customer experience.
So what else makes a hackathon so valuable for marketers?
For one thing, hackathons nourish an environment where you can ask questions and experiment with solutions without fear of being wrong, or even worst, ruining a budget. Developers are used to working with different frame works and experimenting with functionality into a functioning tool is established. Web development and programming can be plagued with a lot of trial and error, just like any other engineered product.
Another benefit of a hackathon is the fact that you can work with teams with a wide array of experiences. For example in my team for the AT&T hackathon I work with students from various Indiana universities. Some were majoring in marketing and business and others in computer science. I also met a student who was completing a software course through one of the new bootcamp programs such as General Assembly.
It turned out during the hackathon that this skill gap did not matter. I collaborated with the other developers in the group to help figure out how to get the programming code to work and function correctly within the IDE. At the end of the hackathon we had some missteps, but we still had a relatively functioning app that we could describe and demonstrate.
The collaboration taught me that although preparation is important, such as having a working knowledge of frameworks, the true value from hackathons is determining how to deploy frameworks, especially within a given deadline.
Another aspect to note was that I was also among the older participants overall, let alone in my group. I was 47 at that time. But my age gave me an advantage of offering perspective on decisions that had to be made when the team met periodically in the development time allotted.
Hackathons can also help marketers understand what goes into the development process a lot more clearly than any words could ever express. Learning to work with cross-functional teams. Learning to leverage skill set that you have balanced with a curiosity to learn more can go a long way to make the hackathon experience enjoyable.
One personal revelation was discovering how much experience I could bring to others. After so many years marketers forget how their experience can help others. Twice I was asked by my younger members about what my experiences were in running an analytics company.
There are plenty of hackathons available for users to jump into. A hackathon does not have to be from within a college setting. ChicagoHack offers a weekly hackathon every Tuesday, in which developers from across the city to work with interested persons as well as provide a platform for learning of the latest data sources. Chicago, like many other cities , are leveraging open data to encourage developers to come up with apps that improve the quality of life in their communities.
Participation in hackathons or other groups blended with technical professionals can help marketers understand what’s going on in the real world without a lot of expense or extensive effort.
“It’s our recognition that if you go to bed as an industrial company, you’re going to wake up as a software company,” declared Jeffrey Immelt, Chairman and CEO of General Electric (GE) at a Gartner conference back in 2015. He was trying to note that companies should seek to disrupt themselves, making a nod to his own, GE.
Well, he certainly did not imagine making a nod to Amazon, but that comment is so apt given what Amazon did with its bid on Whole Foods Markets.
Amazon’s acquisition of Whole Foods Markets represents an unprecedented technological investment in the grocery retail industry. The milestone also signals an unprecedented moment for analytics being seen as a catalyst for long-term business value.
A look at an industry and its margins
Grocers like Krogers and Safeway have sold food items and associated services with thin profit margins. This meant goods would have to be sold at high volume for a grocery chain to be profitable.
When Whole Foods Market started, however, it developed and maintained a margin advantage over other grocery chains through its focus on offering organic foods. Organic foods command higher prices; thus a high product margin is possible. Whole Foods Market established a strategic advantage with its organic food focus. In fact Whole Foods Market is the first grocer to certify its food as organic according to the Wikipedia page on the company.
In recent years, Wal-Mart and Target have begun to offer grocery, increasing competition against traditional grocery chains. But the most striking tactic has been to offer organic foods alongside those . Wal-Mart and other low-cost grocers drawing customers seeking bargains away from Whole Foods.
The plan has worked. Whole Foods reported six quarters of declining sales as a result. Moreover, Whole Foods gained a consumer nick-name “Whole Paycheck” that references the price concerns people have about its produce.
How Analytics Becomes Essential To Business Growth
Enter Amazon and its potential to give Whole Foods a leg up.
Amazon has a number of analytic solutions that benefit Amazon Web Services (AWS), a set of cloud and services for databases and hosting. These cloud services have been geared towards either supporting Amazon services or for specific needs of the tech community. But with the Whole Food acquisition, Amazon has an opportunity to demonstrate tangent value to a industry that consumers and Wall Street analysts naturally understand. Consumers can see more personalized marketing, which will boost sales.
An effort to provide more value may even challenge that consumer nick-name “Whole Paycheck” nickname.
The Amazon-Whole Food deal creates a transformation for a retail business model: a retailer that has been regularly limited by margins suddenly can determine where to focus on growing customer experience and ultimately retain customers. It can do so through applied machine learning. A simple concept behind machine learning is applying computation software to a dataset and providing meaningful results such as personalized service for customers. A complimentary predictive analytics model can be built to adjust operational support for that personalization service. Ultimately Amazon can leverage discoveries from machine learning initiatives into meaningful customer and business value.
This scenario is an analytical environment that can benefit Whole Foods against fierce competitors like Target and Wal-Mart, which are already using analytic initiatives of their own.
Decide whether to build software or acquire another company’s
The decision to acquire a company is no small feat – Amazon’s all-cash acquisition is its largest to date. But this news places a strategy spotlight on the value of analytics.
Amazon’s growth, albeit with debate about its scale at its start, reflects a trend that scaling a business profitably is part of business growth. Business leaders are beginning to understand analytics can become a factor for unlocking long term value. More importantly, they are putting that understanding into action.
The growing appreciation also raises the question – should a business look to acquire a business with analytics capability or should it develop its own in-house analytic services? This dilemma is a significant twist from a classic business question – to develop in-house capability or to integrate another company capabilities that has been honed and refined.
So should companies build software as a response to competitive pressure, or should they acquire it? There is no panacea for an answer.
Many business owners believe business growth means increasing in physical size. But doing so increases the demand for capital, and can start a never-ending spiral to induce volume sales.
Analytics can provide the right approach to scale, a variation on Immelt’s thought regarding self-disruption. But it can take a large costly and timely effort to implement the right solutions.
But no matter what choice managers make, companies have to analyze their strategic activity and determine how to best create solutions that customers appreciate.
This image is just notes from my pad, but one comment is a crucial aspect that is really important in business today – the idea that the team that manages all its sources of value has a significant advantage. Those resources are become digitalized, represented as data.
The end result is that analytics becomes central in building a strategic advantage. For probably the most dramatic example of what analytics can potentially do, check out my CMSWire post on the Amazon-Whole Foods merger. The grocery retail industry has operated on thin margins. Whole Foods Market has been the noted exception for years, thanks to its emphasis on organic foods. Organic foods have traditionally carried a higher price, so its contribution margin is higher than common goods.
But during 2016, Whole Foods saw competitors begin to also offer organic foods. The most notable is Wal-Mart. Wal-Mart has offered groceries at lower prices, putting earning pressure on Whole Foods. It experienced 6 financial quarters of declining earnings, due in part to the increased competition.
Analytics can not fix a bad business model, but it can make an effective one better. Whole Foods has an effective model, and Amazon’s ability to leverage wholistic analytics on its cloud technology and operations can offer new ways to Whole Foods to cut costs where possible.
On January 1st, the Chicago Sun Times published an interview with Zimana founder Pierre DeBois. The interview covers how Pierre made a transition from his early automotive career to a leader in the analytics field.
You can read the interview at this link, and can check out the accompanying video below.