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Consumers were too fast for even the cleverest algorithms this season

Posting in Technology
First, the good news: holiday shopping activity was greater than expected, signalling the economy is steadily continuing on a strong growth path. Now, the less-than-good news: holiday shopping was greater than expected, catching a lot of retailers and shippers by surprise.

The Wall Street Journal reports that a late surge in online consumer buying overwhelmed the ability of e-commerce retailers and shippers to get products out on time:
"Companies from Amazon.com Inc. to Kohl's Corp. and Wal-Mart Stores Inc., having promised to deliver items before Dec. 25, missed some delivery target dates.United Parcel Service Inc. determined late Tuesday that it wouldn't deliver some goods in time for Christmas, as a spike in last-minute shopping overwhelmed its system. 'The volume of air packages in the UPS system did exceed capacity as demand was much greater than our forecast,' a UPS spokeswoman said."
The WSJ cites estimates from IBM Digital Analytics, which shows that "web sales jumped 37% from the year before."

In this era of Big Data analytics, we're expecting organizations to have incredibly broad vision when it comes to customer trends and habits. Predictive analytics is supposed to be able to foresee demand to the point that everything is neatly executed, from production floor to warehouse to distribution point to customers' hands. But this season is a reminder that there's still a lot of work that needs to be done before Big Data really starts giving us a true picture of things that we can bet our businesses on.

And that's what will keep a lot of us busy through 2014....

(Thumbnail photo: Frauhofer Institute media relations.)

— By on December 26, 2013, 8:55 AM PST

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure