Whenever a hurricane is forecast, the Federal Emergency Management Agency (FEMA) recommends a standard list of supplies: canned food, can openers, bottled water, flashlights, batteries, radios and pet supplies. No surprise, but demand for these items will then jump prompting retailers and manufacturers of these products make sure to increase their stock.
But shoppers also pick up other storm “necessities,” and some of these purchases are a bit more surprising. In the early 2000s, Wal-Mart analyzed their data and noticed that just before a hurricane, shoppers were adding an entirely unexpected item to their carts.
"We didn't know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane. And the pre-hurricane top-selling item was beer,” Linda M. Dillman, then Wal-Mart's chief information officer, told the New York Times at the time.
This example underscores the importance of not overlooking big data within an organization: no organization operates in a vacuum. Executives hope big data platforms will help them identify surprises, as well as track emerging trends. It may seem a lofty goal, but by understanding patterns and plucking insights from all internal data sources, they believe they’ll be able to predict the future.
External News and Data
But without external sources, especially news, predictive value is limited. After all, without knowledge about the hurricane’s path analysts cannot link the weather pattern to sales or jump into high gear when the next storm is forming. The context provided by news can frame how the data is interpreted and applied.
Business leaders are acutely aware of the crucial role external data plays in rounding out their internal data sets. In its research on data analytics, management consulting firm McKinsey, discovered that most companies realize the need to mine both structured and unstructured external sources of data. The firm says public information and shared data from private sources can potentially add $3 trillion to $5 trillion of value to select areas of the economy.
“Blended with proprietary data sets, it can propel innovation and help organizations replace traditional and intuitive decision-making approaches with data-driven ones,” the firm says.
An integrated news feed puts customer behavior in context, provides a 360-view of business decisions, and enables faster discovery of trends. There are three ways external news sources help organizations make accurate predictions and effective data-driven decisions.
Customer Behavior in Context
Like the hurricane example above, internal customer data can tell you what items are selling, but not necessarily why. By integrating a news feed via API into your data analytics platform, you can identify relationships and patterns, leading to a better understanding of customer behavior.
The 360-Degree View
Organizations are often buffeted by forces outside their control. Customers, competitors and government officials can use news outlets as a platform to persuade or influence corporate decisions. Nordstrom’s recent announcement to discontinue Ivanka Trump’s clothing line in its stores elicited strong reaction by both customers and the U.S. executive branch. Widely reported on the evening and nightly news, the story was extended after the President tweeted his disappointment in the move and, in a TV interview, advisor Kellyanne Conway suggested viewers buy items from the clothing line. Within a week, Nordstrom’s stock price was up nearly 5%.
Extended news cycles such as these almost certainly impact future sales and the organization’s well-being. By integrating news feeds into data analytics platforms, brands get a 360-degree perspective – as the news unfolds. Only with immediate and comprehensive insight can they develop appropriate next steps, especially essential in high-risk situations where a timely reaction that optimizes on the news is critical.
Big Data Spotting Trends
Trend-spotting is the most frequent and compelling argument for big data platforms. The first organization to recognize attitudes or behaviors are shifting will be well-positioned to take early advantage. On their own, customer and marketing data may seem unremarkable. But by analyzing the interrelation of internal data and broadcast media, for example, a product manager may discover markers of a trend and a potentially lucrative opportunity.
In building their data analytics platform, business executives should think expansively about data sources. Without external news, their decisions will be limited by a partial view. After all, no business should ever operate in a vacuum.
TVEyes offers a variety of APIs designed to make video and audio, transcripts and data easily accessible from your platform. Learn more about our most popular API offerings by requesting the API Overview Guide.