Data will be central to smarter decisions, better outcomes in 2021 and beyond
Like many people, I’m looking forward to 2021. Undoubtedly, this year has been one of the hardest in every aspect of life. We’ve all had to adapt to new and increasingly digital ways of working, living, educating, shopping, recreating and traveling. This accelerated digitisation means that we are also generating increasingly larger quantities and diverse types of data as we complete the tasks essential to our daily lives.
Covid-19 has required businesses around the world to adjust to these new customer needs and shopping patterns. Some have, unfortunately, struggled for a wide range of understandable reasons, feeling their only course was to get rid of product or shut down operations entirely. Others have been able to find ways forward – showing true creativity in the process and demonstrating reinforced commitment as they focus on helping customers get through this uncertain time. But, in some ways, this perseverance should come as no surprise. Many businesses have shown incredible agility in recent years to meet rapidly changing consumer needs and market conditions.
As we look toward next year – and the challenges to business and society it will bring – the desire on the part of organisations to turn new and growing datasets into insights desperately needed to enable the innovation required to overcome those challenges will only intensify. These insights will guide businesses as they make incremental steps to recovery – and help all of us responsibly navigate our way through a still uncertain future.
Strategic decision-making in 2021 will require a deeper understanding of global economic and political changes and how they impact business priorities and customer behaviours. It will also force businesses to deal with a great deal of risk. But data-driven innovation is all about enabling the products, services and solutions of the future – while balancing the scale of current and future risks. Experimenting with ideas and quickly making decisions based on learnings will be key.
Here are three ways to embrace data-driven innovation in 2021.
Get to know today’s customer
Data does two valuable things for businesses: it inspires new ideas and provides direction for better decisions.
Access to accurate, valid, timely, complete and consistent data that is fit for purpose reveals key insight into what your customers want and need now and where and how they’re shopping. Sure, many executives rely on gut instinct, but 73% of the most innovative companies draw insights from multiple data sources and use advanced analytics to parse that data. This was one of the findings from research on innovation traits we sponsored in 2019 with Harvard Business Review Analytic Services.
We’ve seen how data and insights have guided organizations throughout 2020. While overall restaurant sales remaining down due to coronavirus restrictions, our Market Basket Analyzer solution helped a quick-service restaurant in the US increase their average check size 10% year-over-year thanks to the successful debut of “family meal deals.” Additionally, a major restaurant CFO tapped into SpendingPulse™ insights around ‘food out of home to food at home stats’ by region. The business used the findings to adjust regional approaches as mobility and service restrictions fluctuated.
If there’s anything that the pandemic has taught us, it’s that things can change quickly and dramatically. Data helps businesses be ready for those big and small changes and provides direction into how to adapt.
Second guess (and test) everything
Yes, the future remains uncertain as we all strive to reach whatever new reality awaits. Uncertainty requires businesses to be daring with new ideas and strategies that will better serve their customers. That said, not all bold ideas pay off.
That’s why testing new ideas will be critical in 2021. The need to get it right – and right now – has never been greater. Some of the most innovative pivots have happened in the grocery sector as they have had to find the most efficient way to serve the most people across stores. Much of this was driven by huge constraints on supply chains in the beginning of the outbreak.
When HEMA, which operates more than 750 stores in three continents, turned to us to help steer their response to the pandemic, the opportunity to help them help their consumers was clear. We focused on the big question: What is the most efficient way to serve the most people across stores? Conventional wisdom pointed to focusing on fewer, larger stores, but is traditional thinking out of place in a covid-19 world?
To find out, we used our “test and learn” experimentation platform, which was built to help businesses figure out what works—and, perhaps more importantly, what doesn’t—before businesses roll out changes broadly.
We were able to quickly identify what changes HEMA could make to balance the needs of their customers and the needs of the business. Interestingly, contrary to expectations, the data-driven insights showed that smaller stores, not larger ones, were doing well—leading the HEMA board to keep these stores open. A deep dive into the results revealed that sales were shifting to smaller stores, which are located in more residential areas, as people chose to stay home and shop more locally. In addition, opening stores earlier would give their elderly and vulnerable customers time to shop safely, while closing early allowed the staff to restock. All in all, the changes would allow them to best serve their customers—and their communities.
Protect data and make sure others do too
As companies look for new ways to meet changing consumer demand, they will need to rely on data collected from and shared by individuals. And with that increased data reliance comes real responsibility.
Consumer data can help businesses create new products and services and provide more personalized offers and messaging, which is especially important as people continue to physically distance and seek different ways to connect.
But consumers have become more aware and concerned about how companies use their data. In a new Harvard Business Review Analytic Services report that Mastercard sponsored, 72% of consumers surveyed said they are paying attention to how companies collect and use their data. And nearly that many consumers believe companies are getting the better end of the deal when it comes to business use of their data. As business leaders, we must do better, especially as we push innovation efforts to new levels.
Mastercard has taken several steps to frame our corporate data responsibility and to reaffirm our commitment to data innovation practices that honour individuals, their data rights and their trust. We believe these practices can apply across many organizations:
- Uphold best-in-class security and privacy practices.
- Explain clearly and simply to individuals how their data is collected, used and shared and give them the control over how it’s used.
- Keep consumer interests at the center of data practices.
- Be deliberate in how data is used to minimize biases, inaccuracies and unintended consequences.
- Constantly innovate to ensure individuals benefit from the use of their data through better experiences, products and services.
- Use data to identify needs and opportunities to make a positive impact on society.
As companies grapple with new workstyles due to lockdowns, along with continued uncertainty and growth challenges, they can’t let their guard down—protecting themselves and their customers is critical. From a cybersecurity perspective, the opportunity for cyber criminals has not changed. The attackers are more varied, attack in higher numbers and use various channels. But their objectives remain: disruption, damage and theft.
Innovation should not be hampered or disrupted by a cyber breach. As organizations ramp up their innovation strategies, so should they take a closer look at their risk exposure and proactively monitor third-party cyber risk. It’s also vital to make sure that as workforces innovate, they also be trained to recognize widely used phishing attacks, which have become more sophisticated.
No one truly knows what 2021 holds for us personally or professionally. In some ways, the uncertainly feels incredibly uncomfortable. But in other ways, it feels like an opportunity to pave the way for a brighter future for all of us.