2010 Ibm Users Group Final

Revitalize the Customer Experience

IBM Retail User Group ConferenceApril 25-28

2010San Antonio

Winning the New Consumer

Jim NadlerSVP – Business Development afterBOT Inc. [email protected]

33rd Annual Conference IBM RETAIL USER GROUP


Agenda Today's Retail Challenge

The “New” Consumer

People and Political Resistance to Change

Retail Technology Innovations

Retailing in Real Time

Factors to Consider:

Marketing

Merchandising

Store Operations

Supplier Community’s Role

The Business Process Impact

Conclusion – The “Connected Enterprise”



Today’s Retail Challenge

Attract, Build and Retain a PROFITABLE Customer Base Drive Operational Efficiencies. Improve Marketing Effectiveness Differentiate with Customer Service Offerings. Meet or BEAT Financial Expectations

Change the Paradigm on FINANCIAL Performance Metrics Drive Increased Performance through Operational

EXCELLENCE Increase the Level of Supplier Collaboration in order to DRIVE

Execution Strategy Reduced Reliance on Practices and Processes that do not

provide increased focus on CUSTOMER CENTRIC programs

Define and Implement Replicatible BU$INE$$ PROCE$$ Change



Today’s Retail Challenge

Average Industry Out of Stocks – 8.2%* Up to 17% on Promotional Items

Customers end up purchasing only 54% of intended items for that shopping trip

Industry Movement towards a Demand Driven Supply Chain “Customer Execution” as the Focal Point

Will require “Real Time” Visibility to Deliver to Customer Expectations

Demand for Increase Customer Service Levels Driving the Need for Change



The New Consumer

Value vs. Brands

Need vs. Want

Reliance on Coupons & Promotions

Digitally Savvy – Anywhere, Anytime Information Access

Increased Experimentation w/ Social Networks

Cautious - Unemployment remains at 9.7%

Increased Propensity to SAVE vs. SPEND



The New Consumer – “What Woman Want”

In a survey of more than 1,800 women on Targeted Ads

65% of them think: "Cool! How did they know I wanted this?" when they receive an online ad that was targeted directly at them.

88% of them said the wished brands they trusted sent tailored offers.

58% of the survey respondents encouraged brands to give them something first, while 19% wanted brands to get to know them better and 17% wanted the brands to tell them something valuable

The brands women said they have the best online relationships with are: Pillsbury, Procter & Gamble, Betty Crocker and General Mills.

April 2010



The New Consumer

According to a new study from ATG, “ a growing majority of consumers are using two or more channels to browse, research and purchase products.” The study, titled "Cross Channel Commerce: The Consumer Perpsective," found that nearly one-third of consumers use three or more channels to begin researching product.

The study found that consumers might start their research online via a computer or mobile device, but then go to a store to make a purchase, because they want to “touch and feel the product.”

April 2010



The New Consumer

*

* 2009 Study by



The New Consumer



Leveraging Social Networks to Build Traffic and Sales*

* Mashable The Social Media Guide

Find Out Who Is In Your 1%

Find Out What Your 1% Likes to Share

Find Out Where Your 1% Goes to Connect and Share

Find Out What Motivates Your 1%

Make ‘Em Famous



The New Consumer

Newspaper circulation continues to decline.

San Francisco Chronicle (- 25%)

New York Times (- 8.5%)

Time spent with social networking has surpassed time spent with e-mail (AC Nielsen).

Time spent on social networks and blogging sites is growing at over three times that of the overall Internet (AC Nielsen).

7 out of 10 Americans consume content via the “stream” or news-feed style communications (Pew Internet).



The New Consumer – Questions to Ponder

What price and promotion strategies are needed to win ?

Do I offer the right mix of need vs. want items ?

What role does private label play ?

Do my store formats meet customer expectations ?

Do I seamlessly integrate my web presence to the consumer?

How do we integrate mobile, social media and other emerging technologies into the customer shopping experience ?

And how do I support that integration?

Can operations, marketing & merchandising teams and my suppliers quickly respond to consumer demand signals ?

With Whom and How will Retailers Share Information?

What role does IT play in this transformation ?



People, Process, & Political Challenges

Shared

Operations

Vendor Community

HQ- Store Communications

Limited Data Accessibility

Pressure on Operations Costs

Inconsistent Vendor Relationships

Reactive vs. Proactive Strategies

Labor Expense & Scheduling

Integration of Business Process

Past Trade Promotion Practices

Delay in Reaction Times due to Data Accessibility

Integration of Field Merchandising Teams

Limited Actionable Information

Private Label Emergence

Industry Consolidation

Increased COGS

Sarbanes Oxley

Resistance to Change

Training on BI Tools & Analytics

Competitive Pressures

Merchandising Strategic Planning

Data Accessibility not Actionable Insight

Continued Reliance on Trade Promotion $$$

Compensation Plans

Disconnect with Operations



“These mature organizations and their leaders have seized on collaboration and self organization as

powerful new levers to cut costs, innovate faster, co-create with customers and partners, and generally

do whatever it takes to usher their organizations into the twenty-first century business environment.”

Don Tapscott, Author - Wikinomics

The New Business Paradigm



Merchandising

Operations

Vendor

Community

Applications

• Day of week performance

• Event Planning

• Order Guidance

• Item Management

• Assortment Management

• Promotion Effectiveness

• Logistics and Operations Planning

Value

• Increased Operational Efficiencies

• Reduce OOS

• Reduced Inventory $$$$$ Investment

• Increased Inventory Turns

• Reduce Item Voids

• Increase Sales

• Increase Profit

Maximizing Results will require adoption of a

New BUSINESS Model

The New Business Paradigm



Retailing in Real Time

Point of Service

Web

Services

ACTIONABLE Insights………Driving Business Process Improvements

Alert Messaging Supplier Access

Operational

Data

Repository

Customer Messaging



1950

1960

1970 ZIP code Census

1980 Demographic data

1990 Household data

2000 Atomic data

2010 Atomic/Mobile Data

Technology Innovations in Retail Marketing Evolution

Pivot Technologies

POS (70s)

Satellite Data Communication (70s)

PC based POS / Scanning (80s)

Barcode & Wireless Scanning (80s)

Inventory / replenishment system (80s)

Data warehousing (90s)

Supply Chain Management (90s)

e-Commerce(90s)

Targeted Marketing (00)

Mobile Commerce

Impacting Standards

Product Categorization

Product SKU & UPC

ARTS XML POS

Electronic Payment (CC, Debit)

EDI

B2B – Supply Chain (ebXML)

Product RFID

Commercial Opportunities

IBM Inovis

NCR GS1

Microsoft Qualcomm

Oracle Teradata

AC Neilson Verizon Wireless

IRI / Symphony Cell Fire

Google Motorola

Catalina Mktg.

Amazon



Mobile Couponing

Cell Fire (Verizon)

Firethorn (Qualcomm)

m-DOT

e-Marketing

Social Networks

Cloud Computing

Digital Receipts

Emerging Retail Technologies



Retail Technology Adoption History



Apple eReceipt has re-energized the topic

January 14, 2000 Announcement at NRF by Digital Receipt Alliance

Digital Receipt XML Schema Released by NRF ARTS Group in 2002

Today's Technology Enables Integration of Mobile Couponing, eMarketing and Digital Receipt

Consumer Research Favors “Digital Receipts” *

83% Overall would like a digital receipt

55% Would still Like a Paper Receipt

Older Consumers are NOT Averse to “digital receipts”

Key Findings *

Green initiatives

Supplier initiatives - Real Time Sharing of POS Information

Cost-cutting initiatives

Store investment initiatives - Operations Benefits

Emerging Retail Technologies – Digital Receipts

* Gartner Study – December 2009



Gain clear alignment within the organization and execute flawlessly against it

Consistently prove the marketing spend, constantly be testing and measuring

Finally make customer centricity a key company (not just marketing) initiative

Get the store portfolio right as its any retailer’s biggest marketing investment

Be promotional where necessary, but balance with a strategy that makes customers stick for reasons beyond promotions

Evolve to and invest in new marketing mediums, without walking away from the tried and true that still are the biggest traffic drivers

Winning the New Consumer – A Marketing Perspective


Revitalize the Customer Experience22

Winning the New Consumer – The Merchandising Effect



Different Pricing Strategies



Different Assortment Strategies



Effective Merchandising Planning Requires

Different Information Strategies

Effective Merchandising Planning



Leverage and Extend the Value of Category Management or Merchandise Planning Initiatives - Request and Reward Leadership Define Roles and Partner Responsibilities

Operations & Logistics Improvements Inventory Management Promotion Program Validation Top Line Growth Real Time Delivery of Sales Data will Provide Accurate & Timely Business Intelligence - Increase

Accountability Enhances Support Capabilities of Vendors by providing external access to Volume Analysis & Movement History Shared Responsibility to react between Store Operations and the Supplier Community Implement a Continuous Improvement Process to Ensure Long Term ROI

Solution Enables Vendor to Better Leverage Expertise in Support of Business Objectives – Change the Responsibility Model Improved Operational Efficiencies Analyze Sales and Marketing information

Provide New Marketing Opportunities Through Emerging Technologies - Focus the Message e-Receipts Shopping Lists Mobile Coupons e-Marketing Applications

The Supplier Community’s Role



Ensuring Product Availability – Significant Reduction of OOS

Improved Customer Service – Leverage information availability to deliver fast efficient responsiveness Anywhere, Anytime

Multi-channel Integration – Present a seamless approach to the consumer

eMarketing –Integration of Web, Mobile and Store Capabilities

Store Labor Management – Measured approach to increasing

Space Utilization – Maximize Sales by integrating all facets of the customer shopping experience to best leverage precious selling space

Store Operation Impacts



The New Consumer brings New Touch points, New Data Sources, New Service Demands and Will Demand a New Way of Doing Business

Create a Steering Committee to Identify the Opportunity / Issues / Challenges

Outline the Key Operational Changes

Detail a Solution – Define the AS IS / TO BE

Implement Change(s)

Document Improvements/Impact

Implement Continuous Process Improvement to maximize re$ults

Never Stop Learning

Bring In a New Infusion of Youth to the Organization

The Business Process Impact



The Future: Flawless Execution = $$ Maximized

Customer

Collaborative Commerce

Platform

Increased Loyalty

Improved Service

Retailer Supplier

•Gross Margin Optimization

•Enhanced Store Operations Reporting

•Increased Supplier Collaboration

•New Customer Marketing Tools

•Improved Performance Visibility

•Operational Efficiency

•New Targeted Promotion Opportunities

•Enhanced Retailer Collaboration

Web Enabled Data Access

Expanded Retail Enterprise Real Time Sell Through

Improved Marketing Support

Increased

Customer LOYALTY

Through Flawless

Execution

•Customer Self Management Tools

•Enhanced Post-Sales Retail Service

•Personalized Promotions

•Integrated Multi-channel Marketing

2010 Ibm Users Group Final

Documents

Transcript of 2010 Ibm Users Group Final