TRACKING THE DIGITAL FOOTPRINTS OF CUSTOMERS: HOW FIRMS CAN IMPROVE THEIR SENSING ABILITIES TO ACHIEVE BUSINESS AGILITY

This work predicts monthly sales numbers for two car manufacturers and demonstrates how information search data can be leveraged to improve forecasting accuracy and shows that information search based models are able to outperform existing benchmark models.

Abstract

In turbulent business environments firms must be able to respond to changes rapidly in order to operate in an economical and efficient manner. To detect such changes, sensing capabilities have to be developed to support decision makers with accurate and timely information. As is known from research in marketing, consumers’ information search behavior is a valuable source to gain insights about the market’s buying side. Therefore, we suggest firms include data on consumers' online information search into their IT-systems to enhance their sensing capabilities. In an empirical example we predict monthly sales numbers for two car manufacturers and demonstrate how information search data can be leveraged to improve forecasting accuracy. The results clearly show that information search based models are able to outperform existing benchmark models. Beyond sales forecasting, consumers’ online information search may be analyzed for a variety of purposes to enhance the sensing capabilities of enterprises.