Tips on Making Big Bucks Using Big Data
SEOUL, KOREA — 48-year-old breadwinner Geo Kim decided to submit his resignation to his company and start his own business. He opted to put up a pub believing that running a bar would be relatively easy for novice entrepreneurs like him. After careful contemplation, he picked out a strategic location near some women’s university where heavy human traffic was expected. Mr. Kim, who had no experience whatsoever, found it a little costly to get professional advice from a consultant. Then, one of his friends informed him of a marketing platform for commercial area analyses. A bit curious yet skeptic, Mr. Kim visited the website and read reports on the commercial area around the women’s university. What he learned from the reports was very much different from what he initially thought about the area. He breathed a sigh of relief on the fact that he ran into the reports before he actually signed any contract.
Though many highly-consuming, 20-something women hang out in the vicinity of the women’s university, there is already a glut of bars in the area. Besides, the students frequent the area’s eateries the most during the weekdays, so the commercial area is not crowded on weekends. The analyses of similar businesses in the area did not sound promising, either. In addition, as job-seeking students spent fewer hours hanging out, the bars located in front of the university suffered a drop in their sales.
Thanks to the report, Mr. Kim learned that operating a coffee shop instead would be far more profitable. Notwithstanding the myriad of coffee shops in the area, they were mostly small-sized. Thus, if a new coffee shop opened offering more fine-tasting coffee and fancier interior designs, captivating female students would be within reach. Mr. Kim was able to loan from a bank but with high interest because of an existing home equity loan and his inability to prove his new venture’s future profitability. After much meandering, Mr. Kim finally opened his own coffee shop. A year later, his coffee shop, as the reports predicted, finally stabilized. The unexpected opening of a subway station nearby was a boon to his business. Self-employed Mr. Kim was on a roll making him expand further his coffee shop.
“Geovision”, SK Telecom’s (SKT) newest innovation, is Korea’s first ever LBS-based corporate business platform. Like Mr. Kim and many other budding entrepreneurs, the marketing platform for commercial area analysis provides them leverage on their business strategies. Many credit card holders are actually unwitting users of Geovision, which analyzes the patterns of credit card use and send card holders text messages recommending them stores nearby based on their preferences.
Geovision integrates map services with the vastest amount of databases, held by Geovision partners from nine different sectors namely SKT, Hyundai Card, SK Marketing & Company, SundoSoft, Real estate 114 and Ilmsoft. Providing innovative management support services like customer management, marketing activities and analyses of commercial areas can help companies save time, enhance work efficiency and make prompt and accurate business decisions. Geovision plays a vital role in SKT’s much-touted service platform, API (Application Programming Interface). Previous efforts to unlock API were largely based on business-to-consumer approach (B2C) while Geovision, based on the B2B approach, takes the credit for laying the foundation for API’s availability to anyone who wants to start his own business. Internationally, LBS-based business services have been a must-have tool for corporate management. In Japan, backed by diverse government policies, LBS-based business services have played a pivotal role in business marketing and sales activities. Numerous global giants like Google, Apple and Twitter are intent on launching location-based services for business.
Unbridled Access to Information on How 2.6 Million People Spend Money
Standing at the center of Myeongdong, once a smartphone user touches an app icon on the screen, relevant maps pop up. As his fingertip taps a specific area, a year’s worth of sales by a business sector appears on the screen. Even sales information during a certain time period is available. Moreover, he learns that between seven to eight in the evening, female office workers in their twenties and thirties, with strong spending ability crisscross the area the most.
If he wants to compare this result with Gangnam, he simply enters Gangnam into the app to retrieve relevant information. This ideal app that helps prospective business proprietors decide on the optimum location and type of business is now available for free. In June, 2012, SKT allowed subscribers and nonsubscribers enjoy free access to Geovision, which was built on information gathered from SKT’s over 2.6 million subscribers. Since 2006, information on SKT subscribers’ traffic stored in each station have been analyzed. At first, SKT attempted to understand when and where subscribers make calls most frequently to draw up a new mobile payment plan. However, in the process, the Korean wireless carrier hit on the idea of utilizing such data for the analysis of commercial areas.
Integrating with information from 3.4 million OK Cashbag members, SKT developed an app capable of comprehensively analyzing commercial areas. This is a perfect example of using “big data.” The first round of developing Geovision was completed in March, and continued efforts are being made to constantly feed updates into Geovision.
Dr. Do-hoon Ha (General manager of Emerging Solution Business Team of Consulting& Solution Business Office of SKT) said, “Bearing in mind the limits of the u-City common platform and business service platforms, Geovision gleans a wide range of information through u-City sensors attached to varied infrastructures, municipalities’ administration, public institutions and the private sector in order to offer location-based services via smartphones.” He continued, “Geovision can be described as a smart analyst because of its ability to analyze deeper by predicting future market trends and offer consulting services.”
General Manager Ha stressed, “We will work towards making u-City services more accessible, more diversified and better utilized. Geovision will eventually contribute to enhancing the usability of u-City services by performing as a service platform that supports services’ initiation and encourages services’ participation. In the past, several credit card companies have developed commercial area analysis services based on information from credit card transactions. Yet, Geovision covers detailed information on the floating population at a certain location. Moreover, it is able to accurately calculate foregift (a premium paid for a lease by a tenant) each store will demand.”
Primarily, SKT charged its corporate customers a fee of KRW 150,000 for using Geovision once at a certain location. However, the Korean wireless giant changed its policy for the benefit of retirees as more Korean baby boomers (born between 1956 and 1963) started to reach their retirement age and sought to start their own business as source of post-retirement income.