You’ve probably heard this quote several times before: “Data is the new oil.” A quote that goes back to 2006, and is attributed to Mathematician Clive Humby who was the first to coin this term. Which makes one wonder: is data being the new oil a faux?

Definitely not. In 2020, data will continue to have a real impact on the world. This impact cuts across almost all industries we can think of; technology to healthcare, transportation to trade, finance to education, retail to advertising, and the list goes on.

Today, many brands rely heavily on data not only to survive, but also win an edge over their competition. Below are four trends in which data will be a massive driver for brands in 2020.

  • The Development of New Products
  • Amplifying Customer Experience
  • Optimizing Advertising Strategies
  • Improving Recommendations

The Development of New Products

With customers becoming more demanding, every brand be it local or global, new or well-established, needs to keep evolving to meet their expectations. And evolving means creating new products that are relevant to customers and will play a meaningful role in their lives. 

However, how does a brand ensure that a product is successful? One school of thought says: “try out many products until one succeeds.” While one can argue in favor of this approach, it can be a very costly route few brands can afford to take, both from a time and cost perspective. In an era where everything around us is fast moving, brands will have to step up their game.

Hence, it is only wise to rely on data collected from customers. Data that gives an insight on their pain points, their needs, and ultimately help develop the products they love and would want to use.

Testing, learning, and optimizing (TLO) framework has become a practice among top brands like Amazon and Netflix. The reliance on data from their A/B tests to roll out new features helps make their decision an informed one. Here’s how Netflix performs A/B testing to serve a great streaming experience with high-quality video and minimal playback interruptions to its customers.

The days of blindly experimenting with products won’t lead to results anymore, especially with the ever growing customer expectations. In 2020, there will be huge reliance on data-driven product development instead. Data will have its influence over every phase of the product development process, starting from research to design, development to market rollout.

Amplifying Customer Experience

Customer experience will continue to be a big topic in 2020 as many brands strive to enhance it. One example of how some brands started improving customer experience is by integrating a chatbot service in their communication platforms. Using chatbots, customers can get their queries answered in one interface, instead of navigating the full website/app of a brand.

From the backend, brands will use collected data from these queries to analyse the customers’ pain points, build better experiences, as well as diminish operational costs. However, for customer experience to be optimal, brands should also keep manned support available in the event a chatbot fails to answer customer queries.  

In 2020, we will also see a rise of artificial Intelligence-powered chatbot, which uses machine learning to converse more naturally, and thus enhancing customer experience.

Another way brands will rely on data to better their customer experience is the use of big data, which is analyzing big volumes of data to generate meaningful business insights. For example, a brand can learn a lot about customers through their purchase history. Big data helps understand customers’ interests which brands can then leverage to curate personalized experiences that connect with them on an emotional level and ultimately win their loyalty.

Optimizing Advertising Strategies

All brands need advertising, even the biggest of them. While it is no secret that our social news feeds are becoming cluttered with content, brands are striving to optimize their advertising strategies to target relevant customers with meaningful content. 

So, how do brands get their products in front of the right customers at the right time? Data is the clear answer. However, with the existing paradox of customer trust in brands, it makes it harder for the latter to collect personal data. Also with the rise of regulations like GDPR which strengthens the control of individuals over what they want and don’t want to share.

What brands need to do in such a case is to create trust with their consumers, and be transparent on where the collected data is being used. At the end, no one wants to feel like they are secretly being watched and listened to through their computer or phone screens.

In addition to building the trust, brands would need to adopt data-driven advertising which uses automation and AI to scale the communication with customers on a one-to-one level. Data-driven advertising gathers all the data a brand has about customer behavior and generates meaningful interactions out of it. 

From the point of view of advertising agencies, adopting a mindset of data-driven strategies is crucial for their evolution, as well as the evolution of brands they work with. In 2019, campaigns like Uber Legends and Spotify Wrapped proved to be successful examples of the use of data-driven advertising, smart creative, and appealing content.

Improving Recommendations

Content is king, and will continue to be the driving force behind many brands we know today. However, with the ever growing content industry, how do brands overcome the challenge of delivering content that is relevant to their customers? 

Brands like, Spotify, the largest on-demand music service in the world, has a history of using data, artificial intelligence and machine learning to not only push custom recommendations to its users based on their preferences, but also based on the preferences of other users that have similar tastes. 

Recommending songs that fall in line with a user’s interests can only be efficiently done by making use of data, and Spotify accumulates a lot of these: song preferences, playlist data, geographic location, and more. This is definitely one of many strategies that helps them continue winning in the online music streaming world.

The assumption is that more brands will be following the Spotify path in 2020. It is also safe to say that brands not relying on data to improve their recommendation systems risk being left in the dust by the competition.

Take Away

Data is everywhere, and it is generated by every interaction we make with a brand, be it offline or online. While a lot of brands started to leverage data to enhance their services and customer experience, many still lag behind. 

From the perspective of advertising agencies, the power of marrying data insights, creativity, and technology will become the magic potion of campaigns that deliver meaning and appeal to people. At MRM, we pride ourselves with the use of data to create targeted and meaningful experiences for brands we work with. Experiences that are curated in real time, to engage customers and build relationships.

In summary, the use of data to drive the success of brands will no longer be a choice, but a necessity. And it will be interesting to see more brands and agencies riding the data wave and adopting its trends in 2020.