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Digital media as ‘big data’: Retailing evidence from Belgium
Despite significant investment in digital media in general, the role of digital media as a platform for big data remains overlooked. To illustrate the potential value of digital media in this regard, this paper demonstrates how Google searches can be used to ‘nowcast’ the evolution of Belgian retail consumer spending. The statistical evidence shows that the elasticity of Google searches to retail spending is relatively large and the relationship is strongest up to six weeks in advance of retail sales. From a management viewpoint, this means that companies can use digital media as a much more effective forecasting tool, as well as for various other core functions such as planning future sales volumes, anticipating brand competition, etc. In general, the value of such information is significant and may explain more than 20–25 per cent of retail spending.
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Jacques Bughin is a senior partner at McKinsey & Company where his work focuses on high-tech, telecom and media industries. He is a director of the McKinsey Global Institute and a Fellow of ECARES and the University of Leuven. He is the co-author of ‘Managing Media Companies’ (Wiley & Sons), and his academic articles have been published in such journals as the European Economic Review, Management Science, Journal of Economic Behavior and Organization and Journal of Big Data.