The data chief of sports gear giant Under Armour warned Canadian businesses to embrace digital disruption or get left behind on Tuesday, even though new research suggests they’re already slow off the mark.

Phil Kim, Under Armour’s senior director of analytics and big data, told SAP’s Art of the Possible event in Toronto how the U.S.-based retailer is using data to pursue its goal of creating the largest connected fitness network in the world.

Rather than just selling sportswear to customers, Kim said, the company is trying to build data-based relationships with each one of them via its mobile and wearable devices, which include fitness tracking wristbands and biometric running shoes. Since the data is unique to each user, it helps Under Armour build a relationship with each customer that is both personal and personalized.

“Data by itself is useless,” Kim said, unless you use it to “drive value back to the consumer.”

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Over 140 million people use Under Armour apps and social networks such as MapMyFitness, above. (Photo: Under Armour)

Besides creating ongoing engagement with Under Armour’s brand, these connected devices and services also give customers an opportunity to share their experience with an interactive community of fellow fitness-minded users, he said.

“We’re building that community. We’re building that data set,” Kim said.

Fast-paced growth

That community is growing quickly. In a conference call with analysts last July, CEO Kevin Plank said Under Armour had 140 million users worldwide for its connected fitness apps and products, a figure he said was increasing by about 30 per cent annually. Plank also revealed that Under Armour’s connected apps platform was gaining 100,000 new unique registered users every single day.

Much of that phenomenal growth rate comes from a string of acquisitions the company has made since 2013: workout app MapMyFitness, diet and exercise app MyFitnessPal, and social fitness network Endomondo. Yet Kim attributed the bulk of Under Armour’s success to its customer-centric focus.

“It’s the idea that we want to get close enough to the consumer to figure out what they want and need,” he said.

Customers first

Kim said this type of customer-first approach is a common denominator among businesses that use data analytics and other digital technologies to disrupt their industries. From Uber and Airbnb to Netflix, he said the crucial key performance indicator (KPI) for disruptors is the question, “Was the customer satisfied?”

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Under Armour’s Phil Kim said the crucial KPI for disruptors is the question, “Was the customer satisfied?”

Although Kim’s presentation focused on adopting a data-based strategy, a recent study released by event host SAP shows Canadian organizations are off to a slow start when it comes to fully integrating technologies like analytics into their business model.

IDC researchers surveyed 200 senior level Canadian executives for the study, with 134 hailing from line-of-business and 66 from IT. While 84 per cent agree “every business is a technology business,” less than 50 per cent are actually making major investments in technologies like analytics, cloud, cyber security or mobile solutions.

According to respondents, the top real or perceived challenges to implementing a digital transformation strategy are cost, increasing complexity of technology, increasing complexity of business processes and the need for new workforce skills.

Tomorrow’s worry

But the researchers concluded that digital transformation is “largely seen as tomorrow’s worry” among Canadian organizations. Only one third view it as having a “major impact” on their business right now; most (63 per cent) believe it won’t have a major impact on their business for another three to five years.

As a result, businesses in Canada are apparently doing more thinking than acting when it comes to adopting a digital strategy. While 47 per cent are testing “some” digital initiatives, the majority (63 per cent) have only “made formal plans to address digital transformation” at some point.

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Kim: “Data by itself is useless.”

They might not want to wait too long to act, however. Kim noted that game-changing industry disruption is happening faster and faster. He cited movie theatres, which ruled for about 60 years before Blockbuster Video disrupted their business model. It took Netflix less than half that amount of time to come along and upend Blockbuster’s business model, he said.

“Remember Blockbuster? They didn’t keep up, so someone disrupted them,” Kim said.

That risk of being left behind seemingly overnight is echoed somewhat in the SAP/IDC report. Seventy-two per cent of the Canadian businesses surveyed agreed with the statement, “New competitors in my industry appear to be emerging from nowhere.”

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