Technology has changed the way the world functions. There has never been a time where people were more connected, and this is likely to increase as we live through the fourth industrial revolution. Everything from artificial intelligence (AI) and robotics to quantum computing is at an all-time high when it comes to advancement, and that means that the way people live and work is going to continue to see huge and quick changes.
Oil was the last big driver of growth and change, and now computing power and connectivity is taking over. The sheer amount of data collected from consumers across the world is making it easier for companies to connect with existing and potential customers and clients, all while increasing their ability to personalise the user experience.
Big data is at the heart of Industry 4.0. Agricultural consortiums collect data to optimise how they harvest, increase their crop yields, and operate on par with recent public calls for sustainability. For eCommerce companies, data levels are crucial for targeting, personalisation, and tracking user behaviour.
Is there hope for Malaysia’s retailers? We spoke to Innergia Labs’ Vernon Chua to find out more.
But what about the little guys? Small and medium-sized enterprises (SMEs) make up 98.5% of all businesses in Malaysia while employing 48.4% of the population. Yet, their hand in the data pool is barely even skimming the surface.
So, what does the data economy have to do with SMEs? Everything.
A treasure trove at your fingertips—if you know how to use it
SMEs are “the backbone of the economy” in Malaysia. Collection of data needs to be utilised by these firms, not so they can keep up with big conglomerates already a few steps ahead, but because this particular style of customer connection provides an opportunity for growth in a challenging space.
To encourage SMEs to adapt to the growing data economy and prepare for future uncertainties in the business landscape, the Malaysian government has implemented support initiatives to encourage and support digitalization, even with the risk of downsizing or shutdowns because of COVID-19. The SME Digitalisation Grant and the Smart Automation Grant are two of the recently launched programs designed to connect small and medium-sized companies with the resources they need to reap the benefits of increased connectivity, automation and comprehensive information collection.
Digitalization will enable SMEs to achieve higher visibility, customer engagement and improve decision-making. And, data collection — enabled through these digitization initiatives — will give companies an ability to track customer behaviour, spending, and product pairing. It can also help with monitoring which stores or outlets generate the most and the least amount of revenue, and to keep track of ‘hero’ products (the best-selling products available) for companies. For an SME, having access to this type of digital data collection can mean the difference between sinking or swimming, especially during the current pandemic.
A stake in the new data economy
The United States has taken full advantage of the advancing big data abilities for businesses, and customer data is now a huge asset when it comes to company value. This new way of looking at how much a company is worth proves just how important it is for SMEs to hop on the big data train before it leaves the station.
The pandemic has caused an enormous strain on the Malaysian economy, and the president of the Federation of Malaysian Manufacturers(FMM) Tan Sri Soh Shian Lai thinks that it could take up to two years to reach full recovery. During this time, SMEs have the opportunity to utilise new grants to help bring them into the data game.
One of the main sectors taking a massive hit during the pandemic is retail, and although doors have reopened and customers have slowly returned, having access to the right data could make all the difference as they get back on their feet. For one, having this information allows them to see the changes in customer purchasing so that they can develop stable plans to continue to drive sales as the entire economy begins to restore itself. Beyond that, retail data can also serve as a source of revenue.
SME retailers sit on a treasure trove of data that is sought after by suppliers, manufacturers, market research organizations and even the government. The fact is: almost all businesses can benefit from data collection. In the retail/supply-chain, FMCGs and brand owners need to understand consumption data on the street level in order to manage factory planning — supply too much, and there’s wastage; too little, and there’s loss in potential revenue. In marketing and advertising, companies can use it to follow campaigns to see what is working and how efficient their media spend is; market research organisations can use it to track trends and patterns, as they provide data consultancy and reports to their clients; and, governments utilise this data for consumer confidence and economic predictions.
It’s not just data anymore—it’s a “tradeable commodity”. SMEs and giant corporations are both at the mercy of their users’ data. They rely heavily on how much they can collect and how quickly and efficiently a company can analyse it to gain consumers. For many SMEs, the masses of data they own sits there, idle — but by organizing this data, they can commoditize it, transforming these heaps of numbers and figures into an additional revenue stream to tide them through these tough times.
To benefit from the growing data economy ecosystem, SMEs will need to:
- Undertake an audit of the data their organization is generating
- Take stock of how this data can be useful to their organization planning and decision-making, and start tracking its impact on their company bottom line.
- Start understanding how this data is being consumed within their industry ecosystem, and how the acquisition or exchange of the data can bring additional benefits to the company and industry.
Big data isn’t going anywhere, and for SMEs to keep up with the times and protect their bottom line, they’ll need to jump aboard now or risk floundering.
This was contributed by Vernon Chua, CEO and Co-founder of Innergia Labs
About the author
Vernon is the Founder and Chief Executive Officer of Innergia Labs, where he drives the business’s vision and ambition towards a global presence while taking a hands-on approach to new product developments and market entries.
Vernon’s passion for Information Technology started in his teens and has not wavered since. After receiving his Bachelor of Information Systems from the University of Melbourne, he began his career as an analyst programmer in Melbourne. Since then, he gathered a wealth of experience in various roles — as a consultant leading a team providing project management services to a government-linked financial institution; and, as a partner at an IT firm overseeing the development and commercialisation of new products and technologies — before starting Innergia Labs.