In 1453, the fall of Constantinople presented a gargantuan headache to Europe. With the Ottomans defeating the Byzantine Empire, the curtains finally descended on the 1,500-year-old Roman Empire. The Roman Empire had traded precious metals for spices and silk with various Chinese and Indian empires via the land-based silk route; trade flourished and many cities mushroomed along the path, spreading wealth. Being the hub of trade and able to guarantee peace had fuelled their hegemony. With the new regime in place, taking the land route was far more risky. There was now considerable pressure on the Europeans to find a new route to Asia – even if it meant bypassing the Ottoman Turks – in order to enjoy the imported goods.
It was under these circumstances that Christopher Columbus set out to sail westward in search of spices, based on a Florentine astronomer’s endorsement. Unfortunately for him, in a major development, a Portuguese seafarer Bartolomeu Dias reached the Cape of Good Hope in 1488, paving the way for an eastward sea-route to India. The Portuguese were now engrossed in exploring this route further. Additionally, due to a misunderstanding of medieval units and a gross overestimation of the Eurasian landmass, Columbus ended up hopelessly underestimating the distance from the Canary Islands to Japan to a mere 3,700 km (one-fifth of the actual distance). No medieval ship had the capability to carry its crew across such large distances. Furthermore, the spoils of trade were offset by the risks of shipwreck, mutiny, starvation and piracy. He finally found a backer in the Catholic Spanish Monarchy, who were eager to steal a march against their neighbouring Portuguese rivals, even if it meant authorising his left-field approach.
In hindsight, it was remarkable that Columbus embarked on this voyage to the “East” in 1492 without knowing his precise nautical position at any point of time. Sailors of the time largely sailed with a sense of intuition. Determining latitude was relatively simple and involved measuring the angle of the sun. The longitude, however, was a different beast altogether; so much so that the nations with aspirations of maritime supremacy offered significant financial incentive towards determining the longitude correctly. This was only solved a couple of centuries later, with the invention of the chronometer by a British clockmaker. By the time the British ruled much of global trade and the high seas, it was the essential maritime accessory, and with it, came the Age of Discovery and colonialism. Further improvements in technology were brought much later by radio waves and the recent, ubiquitous Global Positioning System (GPS).
The proposition of linking a consumer to a producer (in the manner of the Europeans seeking the East or à la Google) has been an attractive one from time immemorial; being the ultimate middleman was even more so, as demonstrated successfully by several imperial empires. It comes as no surprise that today’s corporations have chosen to embrace the same ethos. In these capitalistic times, finding, serving and retaining customers while churning a profit is the bedrock of any company engaged in trading of goods and services. Needless to say, there is substantial interest from companies who are eager to know how a customer thinks, and what drives his financial choices. In the absence of clean data, business is driven on existing wisdom and intuition.
The conventional modes of marketing and advertising thrive on recall value; create a big splash and make people talk about you. Yet, merely talking alone does not result in sales, the desired end product of marketing. And then there is the problem of online website-based businesses, who are essentially shopping complexes without a salesperson (essentially kiosks), and are vying for attention in today’s ADHD world. But how many people are truly talking about the company and what kind of response are they getting at the end of an expensive marketing campaign?
With the recent thrust on digitising money payment, online wallets and credit card companies will become custodians of the kind of fundamental information that businesses seek.
Big companies and coming-of-age startups thrive heavily on mass media to carry their message to their prospective customers. Why, wading through newspapers and searching for the news item is quite a tedious task today. But do you reach out to your wallet to make a purchase after reading a front-page newspaper ad? Has a billboard ever driven you to buy a product? Or a radio or television advertisement? Are they even making a mark? At astronomical rates, are these options bang for the buck? Is the reward worth the risk? You reckon this is kinda like the sea-route problem? You think marketing is fraught with uncertainity and inefficiency?
Identifying and reaching potential customers is part of the every business’ existential struggle; but the challenge of what customers want and understanding how they spend money in exchange for products or services is not straightforward, even more so in a cash-based economy. Of course, an experienced marketeer or salesperson might tell you that people tend to purchase more at the start of the month, during festivals or if the terminal digit of the price ends in a nine but how much of it is a science? And, what sanctity does the data have if you can’t keep an exact track of purchases made?
The big problem is that responses to traditional media-based campaigns, for lack of a better method, base it on survey responses. Anyone who’s spent some time following exit polls know their efficacy. Sure, the internet has probably answered some of these questions – how long did the buzz last, how many people came online to check out the website, what they did afterwards and their ilk; but the issue of how people spend their money after all the hullaballoo still remains.
This is where credit card companies, banks and online wallets are poised to take advantage of the recent demonetisation in India. No doubt, the drive has set the cat among the pigeons, throwing day-to-day transactions into disarray. But when the dust finally settles, credit card and online wallet companies would be the ones laughing all the way to the bank. With the recent thrust on digitising money payment (though India is still far away from a complete transformation), they are custodians of the kind of fundamental information that businesses seek. What kind of answers can logbook provide?
The biggest impediment to marketing and sales efficiency was never the people who interpreted available information and spotted trends; it was the paucity of crystal clear data points on customer behaviour.
Who are the people buying a burger? What are their income levels? How old are they? How much do they spend per month on food or clothing or grooming services? How far do they stay from my store? Where else do they go to grab a bite? In which locality should I open my store? Does gloomy weather increase the sales of chai and pakora? If a customer buys a white shirt from my shop, what does he buy next and where does he go? Which other items should I sell in my store in order to increase my sales but not compromise my profit? More disturbingly, firmly in Big-Brother territory, based on my customer’s social cohort, what is the level of discount necessary to entice them into the store?
The biggest impediment to marketing and sales efficiency was never the people who interpreted available information and spotted trends; it was the paucity of crystal clear data points on customer behaviour. With digital payments, the new middlemen stand to gain from becoming the gatekeepers of precious market information. It is only a matter of time before companies jump on this bandwagon and sell this information to the highest bidder, while we were busy signing up and clicking the EULA checkbox. The future might involve utilising this information to carpet-bomb, force-feed us customers and respectfully part us of our money for their goods and services in the most efficient manner possible. Who knows, they may even do it on your birthday; worse, they may claim your family as a willing accomplice, as new insight might tell them that loved ones are likely to spend 300% more money in the week leading up to the customer’s birthday. The only consolation being, you’re not alone, in more ways than one.