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|Singapore respondents name data security & privacy as top area for increased investment
More than half of 469 senior consumer executives worldwide ranked data analytics and digital strategy as the two most important areas for their companies in the coming year.
This is one of the key findings from the latest annual survey conducted by KPMG and the Consumer Goods Forum, a global industry network of consumer professionals.
Titled Transforming for growth: consumer business in the digital age, the second edition of the survey finds out what is ‘top of mind’ among retailers and food, drink & consumer goods manufacturers across 32 countries, including Singapore.
Said Mr Philip Lee, Head of Consumer Markets, KPMG in Singapore: "In last year’s survey, senior executives from consumer companies were most concerned about weak global demand.
"This year, worries over the Euro crisis have eased and the US employment picture is brighter. Consumer executives have shifted their focus towards technology and operations. They are particularly keen to harness data and digital technology to engage increasingly informed consumers."
A shift towards data and digital
About 56 percent of consumer executives said data analytics is important to their company’s strategy, making it the highest-ranked strategic area in the survey.
Digital strategy also featured prominently- 54 percent of respondents named developing a digital strategy for mobile and digital platforms as a priority for their business over the next 12 months. Yet, over a third currently see themselves as having weak or no capabilities in the area.
- Data analytics and external risk mitigation were seen as the most critical areas, with 57 percent of respondents naming these as the focus for their company over the next 12 months
- Developing a digital strategy, as well as data security and privacy, were mentioned by 43 percent of respondents as the most important strategic areas for their company.
- Some 58 percent said they have weak or moderate capability in leveraging digital technology. Singapore respondents were more confident about the use of data analytics- 72 percent said that they have strong or very strong capabilities in this area.
Data security a key challenge
"Data and technology is fundamentally transforming business models. They have also become salient components in advancing strategic advantages and mitigating compliance risks.
"Companies globally are quickly realising that providing a seamless experience across all channels – including digital, mobile and social platforms – and the meaningful analysis of data can differentiate their business," said Mr Lee.
However, the challenge that should really keep companies awake at night is data security, he said.
Indeed, 47 percent of global respondents cited data security as being very or critically important to their business. About 29 percent said it will be one of their biggest challenges over the next 12 months.
- Data security was the second top challenge for consumer executives, with 43 percent seeing the area as the most challenging for their companies over the next year.
- It is also the top area expected to see an increase in investment over the next year, with 57 percent of respondents indicating so.
Mr Lee added: "90 percent of the data currently available has been generated in the last two years and the volume is overwhelming. Companies are still a long way from where they need to be in terms of protecting their client and proprietary information from security breaches.
"Attacks on major retailers such as Target in the US show just how vulnerable organisations are. Hackers are always a step ahead and organisations must look into a comprehensive strategy to protect customer information."
Other key findings
The supply chain was another key area of focus, with 38 percent of global respondents citing it as their main challenge.
Globally, 42 percent placed supply chain management at the top of their list for increased investment over the next 12 months. This was followed by international expansion (32 percent), data analytics (28 percent) and digital strategy (28 percent).
Consumer health and wellness also emerged as a significant concern for respondents, with 56 percent of global executives stating that health and wellness and/or CSR and sustainability priorities are very important to their business.
In Singapore, supply chain management, as well as consumer health and wellness are the top challenge, with 57 percent naming it as the most challenging area for their company.
As for revenue growth, global respondents displayed optimism, with 64 percent expecting organic revenue growth of six percent or better over the next two years.
Singapore respondents reflected the same general optimism. More than 70 percent expect organic growth through existing businesses to be between three and 10 percent over the next two years.
Concluded Mr Lee: "These are exciting times for consumer companies and they can expect abundant opportunities. However, highly optimistic companies may need to assess their ability to support and drive growth as many indicated they were weak in fundamental areas such as digital strategy and supply chain management. Investments must be made so that they can also protect data and information as they continue to grow."
Download the Global Consumer Executive Top of Mind Survey 2014