As part of our ongoing focus on APAC, RETHINK Retail Editor-in-Chief Julia Raymond spoke with AJ Mak, founder and CEO of Chain of Demand, a predictive analytics company based in Hong Kong, about his key learnings from the COVID-19 pandemic and how his company is helping retailers make tough decisions during these unprecedented times.
Chain of Demand has since launched its COVID19 Retail Response Tracker, which helps businesses prepare for the upcoming quarters by providing data and retail-focused insights. You can access the free dashboard at covid19.chainofdemand.co.
Julia Raymond:
As the CEO of a company that specializes in supply chain analytics, what can we learn from APAC business leaders?
AJ Mak:
So, part of what we do, especially in light of the current crisis, is leverage our data analytics to help retailers and business leaders make the tough decisions that they need to make for the next few quarters. In light of this, we have taken Coronavirus data across eight major countries and major markets and infused it with our predictive models This allows us to offer our retail customers and brand customers market-specific and product-specific data based on how the Coronavirus is affecting sales.
AJ Mak:
I think one of the most common questions that we have received from different C-Suites is “What products are going to be most popular during the crisis and after the crisis?”; “How much of each SKU should I be ordering with my suppliers?”; and “When is the Coronavirus going to subside in my market?” So, those are all three very tough questions and we have been working tirelessly to try to answer all of them.
Julia Raymond:
Do you believe that some of your customer’s businesses have fundamentally changed since the Coronavirus pandemic?
AJ Mak:
Given the current virus situation, the original models that we had built for them were no longer valid. Our thesis is always “the best way to deal with Black Swan events, such as this one, is to get as much data as you can and have that data updated as frequently as you can to help you make decisions.” Because no one could have predicted this, no one would know what’s going to happen in the coming months. The only way that you can minimize the damage to your company is to have the most relevant data to make your decisions on.
Julia Raymond:
And when you think about acting rather than waiting, what did that look like for you internally with your company? Were you building these models initially, right when the first data points were coming out—how was the process for you?
AJ Mak:
At the beginning, we saw that this was going to be a major factor in how our business will operate for the whole year, actually. So, we’ve refocused all of our efforts to master the current needs of the market, and that includes offering data services to customers.
AJ Mak:
It’s really about organizing data that is relevant to each of our customers. And part of that effort is really speeding up the development of products for e-commerce customers. We see that there will be an uptake for direct-to-consumer (DTC) brands and all retailers to accelerate their e-commerce plans. We’ve actually created a new product that focuses on e-commerce and behind that is a predictive model that focuses on online sales.
Julia Raymond:
Are there other product offerings you’re looking into because of the pandemic specifically?
AJ Mak:
The e-commerce product was always something that we had in the pipeline but, due to the virus, we had to speed that up and basically focus all of our efforts into launching it within two months. The second product, which is the Data ALEKS offering, is the result of talking to different C-Suites, whether they’re in Asia, or whether they’re in the U.S. or in Europe. I’m just trying to learn more about what is needed and to create a product that can help solve their issues.
Julia Raymond:
And did you gain any customers during this point—any new customers that didn’t have the analytics in place that needed to predict the changes that will happen in order to make these hard decisions about their supply chain and their business?
AJ Mak:
Yes, for sure. We’ve seen quite a bit of an uptake in terms of inquiries to these two new products and we have been busy just trying to accommodate those inquiries because it’s really something that has proven to be lacking in the market. There are a lot of data reports on how the virus affects the economies, but for our industry, especially in retail and in the supply chain, there aren’t any other data reports or data analytic platforms that are updated weekly.
Julia Raymond:
In general, it’s easy to say things like this in hindsight, but knowing what you know now and the changes that you had to make quickly with your company, what would you have done differently, if anything, leading up to the lockdown?
AJ Mak:
The one thing that I wish we had done earlier is to share the data analytics that we have been collecting on the virus. So, in the past few weeks, we’ve been looking at major markets like the U.S., the UK, Canada, South Korea, Italy, China and Singapore, because those are the markets that have been experiencing either a surge in confirmed cases or they have been coming out of the lockdowns in recent weeks. So, we have been gathering that data and compiling into a way that is useful for brands. We really hoped that we could have done this earlier so retailers and brands could leverage this data to mitigate the risks that they’re faced with.
Julia Raymond:
Is there anything else you want to add about the insights you’ve learned?
AJ Mak:
I think one of the adventures that we have with Chain of Demand is that our data science team actually has experience in tracking previous pandemics, which is why we’re able to infuse the Coronavirus data into our models relatively early.
AJ Mak:
It’s a blessing in disguise, we don’t want to have to use this kind of experience ever again, but while we have it, we hope that it could really help the industry to make better decisions going forward. Hopefully, with this current situation, we will be better prepared for anything else that comes in the next 50 to a hundred years. ♦
AJ Mak is the founder and CEO of Chain of Demand, a predictive analytics company that uses AI algorithms to minimize inventory risk and maximize margins for retailers. To learn more about Chain of Demand, visit www.chainofdemand.co
