Operations | May 2013 | By John Morell

Get a Grip on Big Data

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Quick service brands are using big data to streamline and improve business.
Brands like Haute Dogs & Fries are capitalizing on the big data trend to better understand consumer behavior. Haute Dogs & Fries
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Big data can alter the way customer reactions are judged, for instance, when a new product is tested, Gallo says.

An item may be advertised through point-of-sale signage in a handful of stores, as well as through social media channels, with a company carefully watching the tweets and Facebook responses to gauge customer reaction.

“It’s a more immediate way to poll if you have a winner,” he says. “You get a good picture of what your loyal customers are saying, and you can use that to quickly make adjustments if needed.”

But using this type of information and customer data doesn’t mean the venerable focus group has been replaced, Washington says.

“I think like the post office, it will always be around,” she says. “Social media gives you immediate reactions to your products, which is wonderful, but there are times when you really do need those face-to-face encounters with consumers to ask them questions and get into what drives them to buy.”

Just a decade or two ago, digital storage space could be costly, and analysis was considered guesswork with fewer numbers, Diener says.

Now, however, many businesses have become hoarders of virtually any bit of information they can get on their current and potential customers.

“The key is, you’re not just in the restaurant business anymore,” he says. “You’re in the information business, and you’ve got to collect and use that information to stay on top of the market.”

Though big organizations may have more manpower to put behind big data analytics, smaller quick-serve operators can use this information, too.

For them, however, the race to keep up with the big guys in terms of data analysis is often confined to a few minutes on a laptop or smartphone here and there throughout the day.

“We went into this business with a very definite plan that social media would drive our marketing, and that’s how it’s worked out,” says Lionel Holmes, co-owner of Haute Dogs & Fries, a two-unit quick-serve operation based in northern Virginia.

“In the mornings, you do a check of Twitter and Facebook to get a pulse of what’s happening—what people in your community and in your demographic are talking about,” he says.

“Then you can start a conversation about a special you’re having that day, and odds are it’s going to get around quickly.”

Holmes says his years of experience in the restaurant industry and his interest in marketing have taught him that the ways in which customers prefer being approached electronically are evolving.

“It used to be that asking for someone’s e-mail address was no big deal,” he says.

“Now it’s like you’re asking for their social security number,” he continues. “Or lots of people have one e-mail for personal use and another to sign up for subscriptions that they never check, so e-mail addresses have become less reliable in terms of contacting people.”

The big data trend not only means changes for operators at the store level, but also for brands at the corporate level.

In the years ahead, Gallo says, it’s likely that a company’s chief information officer and marketing director will work so closely together that they may want to be in the same office.

“Some organizations are already putting in place a chief data officer to oversee all of the information coming in, and others are hiring data scientists to analyze and make projections about the business,” he says.

And while it may seem like a computer, rather than a person, could gather and interpret all of the big data, it’s not that simple, Diener says.

“We often get caught up trying to find the easy solution—the simple program that allows us to push a button and tells us what product will sell on what day—but you can’t rely too much on that,” he says.

“It’s all about what information is fed into the program and how the program is designed,” he adds. “You still need someone to look over the results and give a detailed interpretation; we don’t have the computer program for that just yet.”

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