For the modern consumer, shopping has never been easier. You could be sitting in a taxi or standing on the Skytrain when the urge to buy overtakes you, and after a few taps on your mobile phone, you're done. At the other end, the business can learn instantly who you are, where you were when you made the purchase, and what kind of hardware and software you used.
But does it know why you made your decision? That's the big question businesses are grappling with in the new digital world.
Companies these days can use digital data not only to capture consumer insights, but also to optimise their business practices from inventory management to finance, and precisely predict future trends that can lead to more sales and profits.
But first they must understand that digital is not just another channel of communication, but a wholly integrated "ecosystem" that allows brands to create a more meaningful journey for consumers, according to Nils Michaelis, managing director of Accenture Digital Asean.
"Many companies are looking at the digital consumer and trying to find new ways to communicate with them. The bigger picture, however, is the whole back end of the enterprise," he said.
The power of digital allows brands to quickly and efficiently track purchasing patterns and consumer trends. Once they quantify and qualify the data, they can design a meaningful journey around it, he said.
Challenges arise, however, when firms cannot make proper use of the huge amount of data they receive.
"The difficulties in extracting valuable insights from data mean that marketers have a rear-view mirror approach, only understanding their performance and brand equity weeks or even months afterward," said Nitin Nishandar, managing director of branding and communications with TNS Asia Pacific.
Real-time data needs to deliver real-time value, otherwise it is just distracting noise, he added.
Kirati Thepsoparn, founder and managing director of Thailand-based Vitamins Consulting & Research Ltd, added that digital technology allows researchers to know what people are doing, but leaves out the essential why factor.
"The insight is what motivates consumers to purchase or behave in certain ways. It explains why people do things," he said, adding that digital data-gathering must be complemented by traditional research.
"I think it's scary when people use digital to understand insights because it's merely reducing people to numbers and statistics."
For example, he said, social media sites only provide part of the picture about what a person is interested in and how he or she wants to portray themselves to the world.
PRACTICAL APPLICATIONS
One company that is investing heavily in digital platforms to obtain real-time data on its customers is iflix, a new Southeast Asian internet-based TV service.
"Using our data from digital sources, we know the location where they're viewing our shows, which types of shows they choose to watch and how long they watch them," Artima Suraphongchai, the iflix country manager in Thailand, told Asia Focus.
The information, she said, helps the company decide what content to offer.
Even data on devices and operating system versions, or whether someone watches a show right after subscribing, can help paint a better picture of who the consumers are, she added.
The insights gained also have allowed the company to improve its application.
"Our first version of the iflix app used the three-line symbol instead of the word 'menu' as we assumed viewers would understand; however, we soon observed that nobody was clicking on it," she said.
Lazada, one of Southeast Asia's largest e-commerce firms, says using digital data makes it easy to track its consumers from the beginning of their journey to the end.
"From the digital data, we are able to drive new potential consumers while increasing the [spending of] current ones," said Alessandro Piscini, chief executive of Lazada Thailand. "Take mobile phones for example. We can track everything they do, where they are, what they searched for and what is becoming the new trend."
Information about consumers' digital profiles also allows the company to target its promotions very precisely. If it wants to advertise a particular item to a particular audience, it can do so based on personal profiles, which types of Facebook pages they like, and their past searches.
"As opposed to traditional advertising such as television spots, the digital world allows us to target the audience more precisely," he added.
GrabTaxi, Southeast Asia's leading taxi-booking application, has taken advantage of data obtained from social media sites to make its software interface more appealing.
"We have made our application less complicated with fewer steps required," said Palm Leviwong, deputy head of the GrabTaxi driver community. "We've also improved the pinpoint locations on the map, both at pickup and the end of the journey, given the complaints we received from social media sites."
EMBRACING DATA
Experts suggest that meaningful insights acquired from both traditional and non-traditional sources, once combined and extracted, can help predict trends and fulfill consumer needs in a more precise manner.
"If research firms were to only observe the facts without understanding why such facts occur, they wouldn't know how else they could fulfill consumers' needs in the future," Mr Kirati said.
"We have to try to understand why the data is like this, why this pattern exists, both through digital and non-digital means."
Mr Michaelis agreed that by combining traditional data gathering and digital channels such as social media, brands can capture highly personalised data to help explain why people buy certain products or services.
"Brands can take all of the data they have and combine it to understand who the consumers are, what their lifestyles and motives are. They will understand why they are doing what they are doing and be able to predict what they will do in the future, even without the data from social media," he said.
While social media data is very valuable for decision-making, brands need to be constantly prepared to deal with "crazies" or those who create a stir that threatens a brand's image, added Chris Riquier, CEO of TNS Asia Pacific.
It doesn't take long for inaccurate information to go viral, with just a few clicks of a "share" button.
"An organisation needs to realise that it can't be in 100% control of the content in social media and consumers are very much guided by the commentaries there," said Mr Riquier.
"Social media monitoring is absolutely critical to monitor short-term conversation, noise and issues that get raised. … Brands need to have a specific mechanism and action plans to respond to specific issues that arise online given that people can post anything."
BALANCING THE BUDGET
The degree of transformation wrought by digital technology has been massive, affecting every aspect of life, from the way people interact to the way they are educated.
"The way firms communicate with their customers, regardless of the industry, has changed and one can see a huge transformation from one-way to two-way communication," said Mr Riquier.
Mr Kirati added that in the past, "information asymmetry" was the norm as brands presented only one-sided information to consumers through advertisements in traditional media. Now with digital media, consumers can obtain information from many sources, enabling more democratic and honest relationships.
Consumer expectations have also shifted in the era of always-on, instant information. "I want what I want, when I want, and in the way that I want to buy it," is how Mr Michaelis put it.
One dilemma for brands is how much money they should allocate to digital spending, while maintaining a proper balance with traditional media spending.
"Companies are struggling with the whole concept of integrated marketing," Mr Riquier said. "They are having difficulty deciding how to allocate funding to digital platforms. They don't understand how to measure the return on investment from those sources."
In his view, the amount of time people spend with their five-inch screens should tell companies where they should allocate their funding. Making that leap will require a strong understanding and commitment from management.
TNS recently advised a global beauty brand with an anti-ageing product that was facing intense competition in Asia and needed to improve its media mix. It recommended that the client reduce traditional media spending and substantially increase digital spending, especially on mobile devices. The advice worked, the brand was able to communicate with its consumers more effectively and ultimately improve its performance.
Investing more in digital engagement is easy and it's very good value for money, said Mr Michaelis. "It's about understanding what customers want and creating services around it. It's not a big investment."
The underlying principle is to put consumers at the centre and understand how to use digital technology to better serve them, he added.