120419 transform or die ibm breakout session 1 wgoir
DESCRIPTION
IBM presentation on retail conference What´s Going on in retailing 2012 WGOIR at Nieuwegein on 19 April 2012. Includes trends and how to respond to thisTRANSCRIPT
Transform or DieSurvival in the Age of the Smarter Consumer
IBM Global Business Services
IBM major businesses worldwide
Global Technology
Services
Global Business Services
Systems and
Technology
Software
S&D and
Research
Provides outsourced IT infrastructure services and business process services
Provides professional services and application outsourcing services
Provides advanced computing, storage and semiconductor technology and products
Provides middleware that enables clients to integrate systems, processes and applications, as well as computer operating systems
Our Sales and Research, Development and Intellectual Property organizations provide a wide spectrum of client support and additional value
GlobalFinancing
Provides financing solutions that can be customized to address specific IT needs, from competitive rates to flexible payment plans and loans
18%
38%*
*= External revenue / Source: Annual report 2011 / http://www.ibm.com/investor/4q11/press.phtml
18%
2%
23 %
1%
Topics
• Trends
– Changes that impact retailers
– Social, mobile, eCommerce throughout the shopping process
• What to do
– Best practices to survive (and thrive)
– Influence and assist along the customers´ digital path-to-purchase
3
Topics
• Trends
– Changes that impact retailers
– Social, mobile, eCommerce throughout the shopping process
4
“Today’s consumers know so much more before they reach the
shelf. They find incredible detail online, from every possible
source, about the brands and products that matter to them. They
browse, dig, explore, dream and master, and then they’re ready
to buy with confidence. And what they learn, they share with
others”.Source: ZMOT - Winning the zero moment of truth - Jim Lecinski
Consumers use (more) information and technology throughout the shopping process – of which a large part is out of your control
Service &
Support
Service &
Support
PurchasePurchase
AwareAware
Sh
op
pin
g M
om
en
t
Take
Possession
Take
Possession
ResearchResearch
Source: IBV Retail 2012 Winning Over the Empowered Consumer Study n= 28527 (global) C01 / http://bit.ly/IFWvHY / http://onforb.es/IsWHGX / http://bit.ly/yEVLaf
Almost one quarter of shoppers use
three or more technologies to shop
& purchase
5
Changes that impact retailers
By year’s end, worldwide media
tablet sales will approach 120 M
Apple to Sell 30 Million iPads in 2012
Of tablet-owning consumers 53%
shop for electronics, 39% for toys,
followed by clothing (37%) and
travel (26%).
Google, Amazon, Apple and Facebook are threatening your business
Source: Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012 - Sucharita Mulpuru - February 07, 20126
Changes that impact retailers
Nearly 50% of web shoppers start their research process on
Amazon or Google. Over 40% of the world’s Internet traffic
constitutes daily visits to Facebook and Google.
Facebook bought Instagram in a $1 billion deal on 9 April 2012
Facebook is currently the largest photo-
storage site in the world, with an average
of 250 million photos uploaded per day
On 13 April Facebook also bought TagTile,
a mobile-based customer loyalty business,
that lets stores run coupon programs and
offer loyalty rewards
BTW: TMG (incl. Hyves) has a public stock
value less than the younger-than-two-
year-old-startup Instagram with 13
employees (around EUR 472M)
7 Source: http://usat.ly/IiblRl / http://bit.ly/Iu2vzW / http://bit.ly/Hs6ig8
Social
Example: Extended reach through Slideshare & Facebook
8
Social
Slideshare: IBM WGOIR presentations Facebook: NL retailer example
53% of internet users in the Netherlands in 2011 reported they
had been active on social networking sites
Source:IBM Research - http://bit.ly/ufjsqm
Mobile phone: 2007- 2012
Source: http://bit.ly/HTS0II / http://gs.statcounter.com/#mobile_vendor-NL-monthly-201101-201201 / http://bit.ly/x78E2v9
Mobile
2007: Nokia phones 2012: Phones used most in NL to access websites
52% of Dutch consumers were using a smartphone in Q4 2011.
Smartphone usage passed normal phone usage for the first time
NASA had less technology when they put Neil Armstrong on the moon than the regular smartphone has today
Apollo Guidance Computer 2.048 MHz, 16 bit processor.
64 KB ROM / 8 KB RAM
Iphone 4Sdual-core 1 GHz Cortex-A9
A5 chipset and 512 MB of RAM
10
Mobile
eCommerce: 2007- 2012
In 2007, Bol.com achieved a record turnover of
EUR 171 million, an increase of 60%. In total, the
company sold over 8 million products
In 2011, Bol.com grew its sales by 18 percent to
EUR 376 million. One in two Dutch who shopped
online, bought something from Bol.com in 2011
In 2012, Royal Ahold NV (AH) acquired Bol.com for
EUR 350 million in an effort to boost Internet sales.
Ahold wants to triple its online sales.
11
eCommerce
Bol.com started in 1999
Turnover 1999
NLG 4,5 - 5 million
Facts & Figures, if you still need more ...
12
eCommerce
Two-thirds of consumers are ready to buy after researching, with the vast majority still transacting in stores > but is it your store?
39
47
47
56
61
67
68
76
80
81
83
18
19
19
17
17
17
20
10
9
8
9
34
13
16
14
8
8
8
6
6
4
4
9
21
18
13
8
8
4
8
5
7
4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Shopping Portal
Mobile Apps
Online Streaming
Social Media
Search Engine
Retailer Website
Magazines
Family/ Friends
Mail/TV/Radio/Blbd
Store
Source: IBM Institute for Business Value Analysis, Retail 2012 = 28527 PM04 After getting information at (research method), where do you usually purchase the item you researched]?
Other = 11% mobile, 10% other
Other = 7% mobile, 11% other
Other = 5% mobile, 8% other
Purchase ChannelResearch Channel
Retail Store
Retail Website
Portal/ Auction
Other
13
Changes that impact retailers
For the 33% of consumers who did not have enough information to purchase, the lacking information is within the retailer’’’’s control
1. Wanted to touch, see and experience the item
2. Wanted to price compare to determine best price
3. Product information was missing
4. Missing independent product review information
5. Could not tell if the product was in stock
Source: IBM Institute for Business Value Analysis, Retail 2012, n = 28,527, PM05
AdvocateAdvocatePurchasePurchaseAwareAware
Shopping Moment
Take
Possession
Take
Possession
ResearchResearch
14
Changes that impact retailers
Topics
• What to do
– Best practices to survive (and thrive)
– Influence and assist along the customers´ digital path-to-purchase
15
Navigate Store/Site
Select & Buy
Choose Channel
User Satisfaction
Advocate Community
Create Demand
Choose Trusted Source
Source: Kantar Retail analysis
How to make that work?
Front-office
1.Make it easy to shop wherever, whenever
2.Personalize offers to individual customers
3.Deliver more value and fun in store
4.Offer unique products and services
Back-office
5.Enhance the added value of store associates
6.Move to smaller stores and more focused assortments
7.Low cost operations become “table stakes”
8.Improve the use of all available data
16Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper
Best practices to survive
Fro
nt-o
ffice
Back-o
ffice
1: Make it easy to shop (wherever, whenever)
17 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: http://bit.ly/HOzAVJ / http://bit.ly/HPwk1N
“We're sort of more of a service for men's
life than just underwear. We find that
guys are historically kind of lazy for
shopping for these things so we make it
really easy for them."
Front-Office
2: Personalize offers: More than just past purchases and profile
18 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://tgr.ph/ACSCVl / http://bit.ly/peSwmu / / Global Technology Outlook 2012
“Tesco is set to launch a wave of price promotions and range
reviews based on the affluence of areas.”
Front-Office
3: Deliver more value and fun in store
19 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HN5IvQ / / http://bit.ly/v3qMEL
“Maybe (the) most important is that the staff isn’t focused on
selling stuff, it’s focused on building relationships and trying to
make people’s lives better. That may sound hokey, but it’s true”.Ron Johnson former senior vice president for retail at Apple
Front-Office
4: Offer unique products & services (to prevent “showrooming”)
20Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / pwc.com/multichannelsurvey
"Offering people personalized prices through their mobile device
may be the most effective way to beat showrooming"
Ability to handle digitally: � Content
� Community
� Commerce
× Social activity
× Frequency
Store = Showroom
Ability to handle digitally: × Content
� Community
� Commerce
× Social activity
× Frequency
Store = Experience
Front-Office
4: Add unique products & services
21Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / pwc.com/multichannelsurvey
“Retailers realize that the competition isn't between stores and
websites, but between their websites and those of others”
Front-Office
5: Enhance the added value of store associates
22Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HKCSgA / www.sephora.com
“With the social, digital, mobile and website updates, we’re
giving our clients the most customizable experience in the beauty
industry, and connecting clients with our experts in the ways that
are most relevant to them” Sephora senior vice president Julie Borntein
All 305 Sephora makeup stores are
equipped with iPod touches that provide a
mobile point-of-sale option for
customers, helping to mitigate the lines
that form in the store.
And 20 Sephora stores, will have two to
four iPads to help clients interact
with a menu of services offered at their
makeover studios.
Back-office
"Hyperlocal will be our true point of differentiation.
This is a major cultural shift for our company, but one that
store teams have genuinely embraced." Craig Herkert, Supervalu president and CEO
6: Move to smaller stores and more focused assortments
23Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Planet retail - Is there a future for hypermarkets? / http://bit.ly/HWVRnM
Non-food offer limited
to daily needs
Proximity and
convenience
Back-office
7: Low cost operations become “table stakes”
24Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HdJO2l / http://reut.rs/HCfLTc
"It's clear to me that the consumer likes shopping online.
I am focused on how do we make them feel as comfortable and
ready to buy in our stores as they do online“Macy's Chief Executive Terry Lundgren
“Macy's plans to have 292 of its more
than 800 stores double as distribution
centers for online orders by the end of
the year in a bid to get products to
customers more quickly as the retailer
competes with Amazon.com Inc”.
Back-office
8: Improve the use of all available data
25
“If we wanted to figure out if a customer is pregnant, even
if she didn’t want us to know, can you do that? ”
Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/zljGR5 / http://onforb.es/xahmzo
Back-office
The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items
Shopping Becomes
Collaborative
Shopping Becomes
Contextual
Shopping Becomes
Deconstructed
Shopping Becomes Real-
time Aware
Shopping Becomes
Experiential
Shopping Becomes
Omnipresent
26
What to do?
Excellent, harmonized and personalized value proposition X-channels
Shared processes & systems supporting use of data, flexibility, low-costs
Sell & Serve:
Buy & Market:
The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items
Shopping Becomes Collaborative
�Retailers engage consumers in retail decisions (e.g. assortment, etc.)
�Consumer-to-community interactions become commonplace3
Shopping Becomes Contextual
�Consumers demand relevancy and personalized service
�Availability of consumer information combined with real-time analytics enables superior experience
4
Shopping Becomes Deconstructed
�Consumers can start/stop and switch channels seamlessly
�New competitors arise; disintermediating consumers from retailers2
Shopping Becomes Real-time Aware
�Device and communication technology converge
�Consumer interactions become timely and proactive5
Shopping Becomes Experiential
�Physical and digital worlds converge to provide an enhance experience
�Shopping becomes all about the experience; availability and fulfillment times are greatly reduced
6
Shopping Becomes Omnipresent
�Shopping becomes engrained in all aspects of our lives due to persistent connectivity and ubiquitous access
�Consumer touch points continue to proliferate increasing availability1
© 2011 IBM Corporation27
Why this is important
Buy Market Sell Service
Good marketing is Service
Service feedback drives better
marketing
Marketing displays relevant ads
ecommerce provides marketing
with real-time shopping behavior
Excess Inventory influences
marketing campaigns
Campaign results impact
inventory plans
Consumer demand shapes
decisions on the supply side,
e.g. supplier sourcing, inventory
Inventory & Logistics drive
fulfillment options
Good service drives cross/up-sell
& repeat sales
Service options offered to
customers during the selling
process
• Supplier Integration &
Management
• Supply Chain Management
• Payments and Settlements
• Strategic Supply
Management*
• Customer Awareness &
Analytics
• Social Media Marketing
• Cross-channel Campaign
Management
• Digital Marketing Optimization
• Pricing, Promotion and
Assortment Optimization*
• Cross-channel Selling
• Order Management &
Fulfillment
• Customer Integration &
Collaboration
• Store Solutions
• Payments & Settlements
• Delivery, Service, & Support
• Customer Self-Service
• Case Management
* IBM announced intent to acquire Emptoris and DemandTec
We help bringing it all together >
28
How IBM can help
Customer
Smarter Commerce focuses on the customer
You need an approach that
allows you to more effectively
connect, collaborate, conduct
commerce and create a
differentiated customer
experience
In today’s world of instant
business, you need deep
insights, in real-time that you
can turn into immediate action
Customer InsightIn turn, you must re-think
how your customers define
value, and the changes you
must make to your value
chain so you can deliver
exactly what your customers
want - profitably
Customer Value Strategy
Customer & Partner Engagement
…increasing the value companies generate
for their customers and partners in a
rapidly changing digital world
29
How IBM can help
Competing based on “price” as the primary value driver
is a “race to the bottom”.
The compelling opportunity for retailers is in blending the
best of what the digital realm has to offer with the best
that the physical realm delivers
Enabling cross channel capabilities, exposing inventory
across the entire enterprise, empowering associates to
meet customer needs, and proactively managing the
relationship with consumers, will enable retailers to build
loyalty with their customers that is more valuable than
merely delivering a low price.
http://bit.ly/HKCSgA
31