How Better Data Will Make Better Decisions

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The Big Data revolution has been described as a “fire hose” of information all companies need to sort through and categorize. While most data-driven articles focus on how businesses use data, it’s important to realize that people use data for decision-making every day.

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Today, we live in a data-focused environment that would have been hard to imagine even ten years ago. Pew Research estimates 68% of Americans own smartphones, putting an immensely powerful tool for data access right in their pockets. They’re not shy about using that tool: Since summer of 2015, more online searches have come from mobile than desktop.

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With such a powerful tool in their hands, this suggests people are frequently accessing data at the very moment they need to make a decision.

And yet, phones are just one part of the equation: Tablets, smartwatches, fitness trackers, and other devices are proliferating fast. Some of these offer access to specialized data sets not available elsewhere, while others allow consumers to bring data with them into new situations.

Whether we realize it or not, we are navigating larger, more complex data sets to make goal-directed choices in our day-to-day lives. How did we get here and what does it mean — for the consumer and the businesses seeking to connect with them?

Data Mining for Everyone: The Modern Shopping Experience

On a daily basis, most routine decisions use qualitative data. Experience, hearsay, hunches, and best guesses all play a role in choosing between alternatives. However, there is one area where quantitative data has always been preferred: Shopping. This offers a window into how data is changing one of the most fundamental activities that virtually everyone engages in.

In the data-centered now, the way brands organize and publicize product information has evolved. Consumers benefit from quicker, more granular comparisons of competing products because all the facts they need are available from multiple sources.

“Comparison shopping” used to mean taking separate trips to different retailers to get the best price. Now comparisons that used to require hours take minutes. Customers can plan their shopping list, purchase path, and coupons in a fraction of the time they once did. They might never set foot in the store that has the “losing” price for the item they want. Heck, they might not ever “set foot” in any store at all!

But the elephant in the room still looms large. No matter what size a company is or what industry it’s in, today’s brands are always running against a competitor with mountains of data: Amazon. With over 480 million products and thousands of retailers all over the world, Amazon itself is a repository for price and performance data. This is consumer data mining at its easiest. Besides its simplicity, it seems that one of Amazon’s key competitive advantages is centralizing and clarifying huge stores of data.

The data revolution encompasses qualitative data, too. Consumers can seek out reviews from “people like them” and view online videos to get a sense for a product before they decide. Family, friends, and colleagues are still important sources of qualitative data, but they have been joined by an ever-growing number of digital influencers.

Consumers Are Integrating Data into Their Lives in Remarkable Ways

One could argue comparison shopping has been around for millennia. Don’t overlook the fact, however, that data is profoundly changing the way people organize their lives. For the first time, individuals have statistics on their personal habits that can help them make positive changes.

Take the Fitbit, for example. This wearable device provides clear, immediate fitness data — faster, cheaper, and deeper than most people have ever had access to. Even a personal trainer, nutritionist, or physician is not usually able to deliver detailed, factual biometric data on demand.

Yet, at last check the best-selling Fitbit was just around $125: A fraction of the cost that would be incurred paying a trainer, nutritionist, or physician. Unlike those experts, the Fitbit is always available and could be useful for many years to come at no additional cost. And with Fitbit collecting and analyzing user data, they are able to use their data to help us get our data to make decisions for a preferred health lifestyle.

The trend isn’t limited to this famous brand. Wearable devices are providing people with the ability to track and monitor their well-being in nuanced ways. Users now have easy access to data measuring:

  • Their basic vital signs, like heart rate and blood pressure — the core of good health.
  • What kinds of food they should eat and when for optimal nutrition and wellness.
  • What physical activities are best for them and when they can maximize benefits.
  • The depth and length of their sleep and how daily activities impact sleep quality.
  • Longitudinal information on how well they’ve maintained their fitness habits.

As technology advances, devices are becoming more compact and advanced. New devices offer instant visibility into data formerly derived from sophisticated and pricey laboratory processes. For example, Google recently filed a patent for glucose-sensing contact lenses. These could grant diabetes sufferers greater convenience and confidence in disease management.

The Smartplate is another innovative example. This “intelligent plate” uses advanced sensor technology to instantly analyze the contents of a meal. It not only delivers customized nutrition information, but tracks and visualizes long-term eating habits. This reduces manual data input, a major inconvenience while following any specialized diet plan.

Though these examples are purpose-built, standalone devices, they already interface with the “computer in our pocket”. In time, even their most advanced capabilities may be integrated right into phone hardware. Thus, the average smartphone is now a communication tool, fun center, and data analysis multitool. It is capable of picking up a growing range of data from the environment and drawing conclusions from it.

Data for Big Decisions: Will Data Access Lead to the Decline of Professional Services? 

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We can see data has a big footprint in areas like fitness and health. In these realms, outcomes are linked to verifiable facts and behaviors that can be modeled via statistics — perfect for the novice and the data professional.

How is consumer access to data affecting areas that use more ambiguous data sets?

To understand ambiguous data, consider the challenge of developing an investment strategy:

There are clear, objective aspects to investment analysis, but the most important factors in a stock’s performance can be hard to isolate. To make an effective choice, decision-makers first must structure the data – deciding what’s most important. Then, they have to integrate qualitative data like executive statements and even personal “hunches” into their view.

While economists and analysts are constantly building models based on macro factors, we’re not exactly there yet for the everyday consumer. For now at least, even the most powerful data analysis tools fall short of providing certainty or consistency possessed by qualified experts with specialized knowledge about the marketplace.

Extending the finance metaphor, qualified experts have other advantages:

Web Users Don’t Believe Everything They Read

People may be willing to indulge freely in the Web’s funny cat videos or Bigfoot conspiracies, but when it comes to their financial future, they’re more vigilant. Today’s Web surfers increasingly believe in caveat emptor when it comes to online content. They realize anyone can have a website, and the information presented is not necessarily vetted by experts. Since the truth is hard to find in an endless sea of data, they’re more likely to start by educating themselves with some of these sites, but in the end go to a reputable authority.

Professional Service Areas Demand Specialized Judgment

Eating, sleeping, and exercising are things people have to do — and they’re expected to do them “right,” even if they’ve never been trained to. That’s a different perspective than most people have on finance. Anxiety around finances is so prevalent that the UK National Health Service has a page on the dangers of money worries. People who feel intimidated by the specialized problem-solving skills professional services demand are unlikely to take a “DIY” approach.

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Working with Experts Helps You Hedge Your Bets

Going hand in hand with the idea that some subjects are too complex to handle alone, working with an expert has an important psychological effect. When ordinary folks partner with a subject matter expert, they feel that someone “in the know” is on their side. There’s a certain selfishness to this, too: If things go wrong, they have someone else who shares blame. Both these factors are important in reducing the overall uncertainty around any major life decision.

As things stand, data probably won’t decimate professional services — but, just as in retail, data access can transform how brands deliver services. Understanding how information is collected, charted and examined provides professionals with the tools to make more incisive decisions.

Better Data Will Clarify and Accelerate Tomorrow’s Decisions

The data revolution has led to big changes, but it’s far from over. Consumers and businesses alike have much to gain from embracing data. Companies can achieve better performance and proven results, while individuals make better choices regarding health, finances, and more.

Used properly, tomorrow’s technology will facilitate better decisions than ever — but these opportunities also bring challenges. Businesses need to be alert, quickly aligning with strategic data collection and usage. As more tools and avenues for applying data emerge in the lives of ordinary consumers, excellence in data use will become a competitive necessity.

What other ways are ordinary people using data to make important decisions?  Let me know here!