By this year, data analysts will be in high demand in companies around the world, according to WEF forecasts
by AZREEN HANI/ pic by BERNAMA
A SINGLE receipt may not mean much to consumers, apart from record-keeping purposes. But for data analytic experts, this piece of paper provides an insight into the vital details companies or business owners should know, in order for them to strategise their operations better.
Over the past 10 years dubbed the “decade of disruption”, the world has witnessed how tech disruptors such as Grab Holdings Inc, Airbnb Inc, Amazon.com Inc and Netflix Inc have changed the way businesses are run.
With the advent of digitalisation, most businesses aren’t just seeking sales figures anymore. This decade, according to experts, companies that know how to analyse and leverage data will win big.
Data is said to be the world’s next biggest commodity, even more important than oil. By this year, data analysts will be in high demand in companies around the world, according to World Economic Forum (WEF) forecasts.
The increasing prominence of online data can no longer be ignored by brick-and-mortar retailers.
Failure to adapt will see them trailing behind other online retailers. This has already been deemed as one of the major reasons behind the “retail apocalypse” in the US.
“Data is going to be the next commodity. Small and medium enterprises (SMEs) and retailers need to learn and adapt to the current demand to remain relevant,” Innergia Labs Sdn Bhd CEO Vernon Chua told The Malaysian Reserve (TMR) in a recent interview.
The data from each receipt generated tells a lot about the buyer’s pattern — “what items they like, what time, when they are more likely to purchase, how they pay,” he added.
“A seasoned businessman would say that this is something he already knows, but it is acquired through years of experience. When he wants to pass on to his children to take over, they may not get the same acumen and years (of experience), so this is where we are able to assist.”
For retailers, their main focus would be increasing their revenues or how much the customers would spend, hence having an understanding of data that would allow retailers to plan their prices and strategise.
However, convincing local SMEs to venture into data analytics will be difficult due to concerns over privacy and cloud storage, which not all retailers are familiar with, Chua noted.
“We realise we have to educate (the SMEs). The good thing is, there is a lot of push from the government on the importance of data and digitisation for SMEs,” he said, adding that the awareness surrounding data has definitely improved from three years ago.
“We also need to teach about cloud storing, data ownership, the privacy issues around data (usage). The Cambridge Analytica Ltd scandal left a bad impression among the SMEs and we had to work hard to mitigate that,” he added.
Most local SMEs are aware of the importance of data, as well as the analysis and processing of data, said the 40-year-old entrepreneur. However, a lack of resources and time could hinder one’s participation in data mining.
“It is quite taxing to do it if they don’t have the tool to automate it,” Chua noted.
Room for Growth in Retail
It has been reported that more than 90% of the world’s data was created in the past few years. Tech giants such as Amazon and Google LLC have been using consumers’ data to their advantage. Every click by users is now personalised based on one’s data history.
For Malaysia, online retailers have been observing the trend over the past decade at least. This provides an added advantage compared to their brick-and-mortar competitors.
Failure to adapt to this development may result in losses for some retailers, especially those in fashion, electronics and books.
“If they don’t adapt, they will be hard hit especially when the government expects this sector to grow all transactions by 20% in the next five years,” Chua warned.
Still, based on trends in China, Malaysian retailers will be able to pick up, provided that they shift their game plan.
“What has happened there is the data shows that brick-and-mortar retailers and malls are growing. Two things are happening: For e-commerce, the cost of acquisition has become very high to get new customers.
“The key is for these brick-and-mortar stores to complement real life and online experiences into one,” he explained.
In China, retailers have adapted to the new digital environment. Players are taking on lifestyle-based concepts, while business owners have invested into systems and technologies to give them similar advantages to the online world.
“For example, I know what products you’re looking at based on data. So, they start marketing to the customers based on their understanding of what they want. Also, they’re doing convergence, offline and online experiences. It’ll never be one or the other. The success is in how these experiences complement (each other).”
Local Reception to Data Usage
The future “is good for now”, said Mydin Mohamed Holdings Bhd CEO Datuk Seri Dr Ameer Ali Mydin, who has noticed that more consumers are returning to physical stores.
“The stores are slowly transforming into new generation stores by using artificial intelligence (AI) and advanced technology to give an experiential shopping experience,” he told TMR.
According to Ameer, the government’s push for the Industrial Revolution 4.0, as evident in the RM2 billion budget this year, has also prompted more local retailers to start venturing into the big data world.
“I think many are starting on this (initiative) and it will only expand more in the future,” he said.
For KK Supermart Holdings Sdn Bhd founder Datuk Dr KK Chai, the only way to grow is to embrace big data analytics.
“Whether we like it or not, we need to understand that understanding data will be very helpful for businesses, especially in observing customers’ trend,” Chai said when contacted recently.
“The technology has enabled us to predict what works and what does not, and adjust our businesses accordingly.”
Chai began using data in KK Supermart’s operations three years ago. He has his own internal analytics team observing, analysing and processing the data.
“It was hard at first, because we didn’t know how to make use of it,” he admitted.
“How to use our data and make use of it, it all takes time. I think that is the challenge for SMEs: Some cannot afford the hassle.”
Yet data offers a far broader world, thus local businesses should use data when they can, Chai said.