Predicting consumer behavior with big data

Businesses of the past operated like a rookie playing darts, throwing something and hoping it sticks.  But the explosion of big data, automation and machine learning have allowed today's businesses to understand humans at an instinctual level, predicting their behavior before it happens, like an expert chess player anticipating well in advance his or her opponent's next move. "We previously were designing products to the extent that humans adapted to the them," said Karthik Kannan, the Thomas Howatt Chaired Professor in Management and director of the Business Information and Analytics Center at Purdue University's Krannert School of Management. "Instead, we are increasingly at the age where we deliver products that can adapt to humans, emphasizing human-centered design much more." The ways in which humans behave often is shaped at the subconscious level, said Kannan, who researches how products, policies and processes can be designed to appeal to human instincts. In his research, he has identified how one instinctual behavior in which humans cooperate for their mutual benefit, known by researchers as reciprocity, has helped and hurt businesses in the retail sector.