Jeopardy_watson_IBMEvery year, I take stock of the past year to get an idea of what the New Year will hold, so I went through the 2013 monthly round-ups to select stories that defined the state of personalization, predictive analytics and other major retail trends last year.

2013: Personalization Tech’s Leaps and Bounds

A fascinating theme to emerge was the urge to understand how the human experience fits into the growth of increasingly powerful and pervasive technologies. From mistrust of machine learning technology and spying, to the increased importance of delivering large-scale yet personalized unique experiences, both evolved from high-minded rhetoric to become mission critical goals for many industries. My sense is that delivering the best experiences for customers will be a primary goal of retailers everywhere in 2014.

As I look both backward and forward, on the behalf of everyone here at Baynote, I want to say thank you to our friends and customers and extend warm holiday wishes to you and your loved ones.  Now, let’s dive in…

Why We Need to Kill ‘Big Data’,” TechCrunch 1/5/13 The big data discussion will likely persist for some time. But is the term “big data” overused with countless startups calling themselves “big data solution providers”? According to this article by Leena Rao, that’s exactly what’s happening.  But the solution is not to identify a new term. Instead, we must look beyond the big data itself to what function it serves. I agree with Leena: Now that the importance of big data is established, let’s refocus the conversation on how we can use that data to drive results. If you’re a big data startup, what solution do you provide? What are the actionable outputs? By answering these questions, we can move beyond the ambiguous “big data” label to drive productive outcomes.

Despite Ms. Rao’s entreaties, the phrase ‘big data’ remained prominent in 2013. Businesses are still working to put big data systems in place. I predict 2014 will see retailers find a way of integrating big data techniques into their organizations and will start extracting insights which they can turn into action.

It’s Not Skynet Yet: In Machine Learning, There’s Still a Role for Humans,” GigaOM 3/20/13– While big data coupled with machine learning provides businesses with a powerful tool for delivering personalized online experiences, humans play an integral role in determining what data sources to feed machines when developing the algorithms that inform machine learning. At GigaOM Structure:Data, Baynote’s Scott Brave pointed out that humans can “build intuitions and holistic pictures in their minds and see these connections that the machine might not even have the possibility of seeing because it doesn’t have the right data.” Sure, a machine may be able to process more data than a person, but we need to remember that humans help to define how that data is processed and still play a vital role in big data and machine learning.

This story touched upon the natural fears of job obviation and the nitty-gritty of machine learning. And, while the machine are powerful and getting stronger, believe it or not – the human-machine connection is still equally important and retailers must train their personnel to use it. 

What’s the NSA picking out of your phone calls? ‘Unvolunteered truths,’” Digital Trends 8/31/13: This article makes the case that the NSA was using meta-data for use in predictive analytics for the sake of national security. Skirting Constitutional issues for a moment, this article highlighted the power of predictive analytics and how it can “…in the aggregate, reveal sensitive details about our everyday lives – details that we had no intent or expectation of sharing.” We continue to learn how big data and predictive analytics impact our lives.

With the revelation that the NSA has been using metadata to produce startlingly accurate pictures of reality, the wider public truly understood what predictive analytics offers for better or worse. Predictive analytics will continue to reshape many aspects of our society, including retail.

“Marissa Mayer: Yahoo is a personalization company,” TechCrunch 9/11/13: During an interview with TechCrunch’s Michael Arrington, Marissa Mayer asserted that Yahoo “is really a personalization company” above anything else. I find her assertion enlightening as she is talking both about the future of Yahoo as well as the entire internet.

Yahoo underwent significant soul searching and internal reorganizations to decide how to move forward. Meyer’s comments crystalized the fact that the way forward for customer-centric companies is to regularly create a unique web experience. A decade ago, this notion would have been laughable. Today, it’s reality.

Shopping dissatisfaction is on the rise but savvy complaints get attention,” The Wall Street Journal 12/19/13: I’m bullish on CXM and it is essential that retail companies especially learn how to master it. CXM will also likely initiate a rise in savvier customer communication. That is, customers will learn how to communicate with companies beyond only complaining when things go wrong. Modern retailers are already making crucial strides to create closer relationships with customers. Social listening and good old fashioned responsiveness will win the hearts and wallets of modern shoppers.

CXM encompasses a lot of technologies and activities for retailers – from personalization to free shipping.  As fewer retailers can compete on price and availability alone, creating a civil and constructive dialogue with customers both pleased and displeased will be at the heart of customer-company communication.