SAP demystifies the Fourth Industrial Revolution
In the midst of this Fourth Industrial Revolution, people, devices and things get increasingly connected and digitized, giving rise to the terminology “Digital Economy”. The size of this digital economy for ASEAN could reach USD1 trillion in over a decade, a study by AT Kearney and Axiata Group had discovered.With over 150 million digital consumers in ASEAN according to Bain & Company, SAP points out that consumers are changing the rules, and technology is changing the game. Consumers choose the way they want to evaluate and interact with a brand and are more inclined to share personal information such as profile, heath records or even personal finances, when they are delighted with a brand’s digital interfacing experience.
SAP Digital Experience Report for Malaysia
SAP commissioned a 1st phase study, in partnership with The Factuary and AMR, to measure the digital experience of consumers in Malaysia. Over 500 consumers were asked to rate nearly 1500 digital interactions with some of the country’s well-known brands. The resulting digital-experience score is positive: 43 percent of consumers rated “delighted” but 26 percent rated “unsatisfied”. This translates to a digital-experience score of 17 percent (delighted less unsatisfied).
As a comparison, when the study was conducted across countries in SEA, namely, Indonesia, Philippines, Singapore, Thailand and Malaysia, the average digital-experience score was 27 percent. That sample size was over 3600 consumers who rated more than 240 brands resulting in 9375 digital interactions.
Business impact of the digital experience
Standing alone, Malaysia’s digital-experience score of 17 percent provides limited insight unless viewed in the context of hard, measurable business outcomes. SAP found a strong correlation between digital-experience score and customer loyalty. About 67 percent of “delighted” consumers said they were likely to remain loyal to that brand. And this same “delighted” group’s “Net Promoter Score” (defined by SAP as the propensity to recommend the brand to others) measured at a cool 65%.
Conversely, just four percent of those “unsatisfied” said they would remain loyal. For the “ambivalent” group, 18 percent said they would remain loyal. A poor digital experience can do a lot more harm to a brand than a lost sale. Many love to share a bad experience, which can lead to multiple losses across multiple customers faster than you can spell “Pokemon Go”. To know that this “share” is virtually borderless should shake any business from its digital stupor.
It is hardly surprising that not ALL “delighted” consumers said they will remain loyal. Some will fall through the cracks. Customer loyalty is a hot yet fickle commodity, with the smallest of irritations pushing a customer to switch brands in an instant. For new entrants to the technology race, that also translates to “penetrable” barriers to entry. That’s one up for consumer choice!
Accenture describes this as the “switching economy”. The estimated opportunity of this potential switching economy, sits at USD$6.2 trillion in revenue across 17 major global markets today. How staggering.
“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.
The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”
– Klaus Martin Schwab (Founder and Executive Chairman, World Economic Forum) –
Doing digital right
Terrence Yong, Managing Director, SAP Malaysia concurs, “With 14 million digital consumers (defined as those 16 years or older who have researched products or services online in at least two categories) in Malaysia, brands that fail to deliver simple, seamless and personalized experiences across any channel, anytime, anywhere and on any device, stand to lose a share in consumers’ wallets.
He continues, “’Brands can bridge the digital experience gap by adopting a clear digital strategy that brings together marketing, sales, services, and commerce to ensure seamless digitization of the entire customer experience. SAP solutions for customer engagement and commerce, powered by the SAP HANA platform, facilitates a 360-degree customer view and how brands can better engage them.”
In today’s digital economy, where data is currency, responsible and respectful access to customer information can trigger a virtuous circle: the better the digital experience, the more personal information the consumer provides, the better the brand can tailor the experience….. and repeat.