The reason behind this predictive magic is that companies like Amazon and Netflix are studying historical user data to improve their forecasting and marketing, and to increase their revenue.
Data Mining is the automated process of analyzing large sets of data and then transforming the data into targeted sets, picking out subtle patterns and trends that would otherwise go undetected. Companies use these analyzed data sets to gain insight into their consumers and to predict future trends and behaviours within their line of business. The information allows companies to reach their business goals by making proactive, knowledge-driven decisions and to answer questions that were previously too complex to resolve.
Data mining is mainly used by companies with a strong consumer focus in retail, finance, communication, and marketing. Target, for example, uses data mining techniques to track who is buy what, when they are buying it, what they are buying it with, and at what price. The company then uses this data to offer customers coupons that are tailored to their buying habits, move certain displays closer to others (Ex. move the chocolate aisle closer to the scented candles), and to decide when to put items on sale and when.
Hey students! Data mining is also used within the classroom. Learning Analytics is when students’ interactions with a learning management interface (like UBC Connect) are tracked and analyzed to determine learning trends, such as the average amount of time spent on a discussion board or the number of people that have read the syllabus. This allows professors and school administrators to view student progress and to determine an individual’s likelihood for success.
Applications of data mining methods are widespread and depend on the specific goals and needs of the company or organization. To learn more about the power of predictive analytics and data mining, check out our stop motion video below:
How does data mining impact your daily life? Do you think that data mining is invasive or useful? Do you have any privacy concerns regarding certain data mining techniques?
Share your thoughts in the comments below.