120419 transform or die ibm breakout session 1 wgoir

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

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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

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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


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

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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

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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.

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eCommerce

Bol.com started in 1999

Turnover 1999

NLG 4,5 - 5 million

Facts & Figures, if you still need more ...

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eCommerce

Two-thirds of consumers are ready to buy after researching, with the vast majority still transacting in stores > but is it your store?

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Shopping Portal

Mobile Apps

Online Streaming

Social Media

Search Engine

Email

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



Purchase ChannelResearch Channel

Retail Store

Retail Website

Portal/ Auction

Other

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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

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Topics

• What to do

– Best practices to survive (and thrive)

– Influence and assist along the customers´ digital path-to-purchase

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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

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“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

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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 >

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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

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How IBM can help

Thank You!

[email protected]

+31651285639

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ibm_retail_nl

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

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120419 transform or die ibm breakout session 1 wgoir

Business

Transcript of 120419 transform or die ibm breakout session 1 wgoir