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Thomas Møller Jensen




Seamless Cross-Channel Retail Execution
Web, Mobile, & Store

                                  © Copyright IBM Corporation 2011
IBM Commerce Solutions



    AGENDA

               A trip to Cross-Channel Nirvana


               Why Retail Cross-Channel


               The Cross-Channel Participants


               IBM’s Smarter Commerce Portfolio


               Example Results of Cross-Channel



2
2                                                 © 2011 IBM Corporation
IBM Commerce Solutions




                                    Cross-Channel ?

       Shopping
                         Mobile
                         Phone
                          Shop
                          Field                       Marketing
                          Apps                          Social network
                          Web                              Direct Mail
                             ...                                Online
                                                                   TV
                                                                     ...
                                   Fulfillment
                                        Delivered
                                         Services
                                          In Shop
                                          Pick-up
                                            Direct
                                              Mail
                                                ...
3                                                                          © 2011 IBM Corporation
IBM Commerce Solutions




    Cross-Channel Nirvana @ Stables




4                                     © 2011 IBM Corporation
IBM Commerce Solutions




    Cross-Channel Nirvana recap

     Social media integration Marketing
     Accurate inventory information Fulfillment
     Location based promotion Shopping
     Rewards program/CRM Marketing
     Cross/Up sell Shopping
     Split payment (Online/Shop) Fulfillment
     One View of Customer and Order at all times
      Marketing Shopping Fulfillment


5                                                   © 2011 IBM Corporation
IBM Commerce Solutions



    AGENDA

               A trip to Cross-Channel Nirvana


               Why Retail Cross-Channel


               The Cross-Channel Participants


               IBM’s Smarter Commerce Portfolio


               Example Results of Cross-Channel



6
6                                                 © 2011 IBM Corporation
IBM Commerce Solutions


   Consumers Are More “Instrumented” Than Ever Before




  Source: “Capitalizing on the smarter consumer”, IBM Global Business Services Executive Report, 2011


       7                                                                                                © 2011 IBM Corporation
IBM Commerce Solutions


   Consumers Are More Interconnected And Intelligent Than Ever Before




                                 Customer




      8                                                         © 2011 IBM Corporation
IBM Commerce Solutions


    Today’s ‘Smarter Consumer’ Sees One Brand, Not Multiple Channels




9                                                              © 2011 IBM Corporation
IBM Commerce Solutions


     Consumers’ Interactions With Your Brand Are Varied And Ever Changing




                   Research                                     Schedule        Check Status                                 Initiate/Track
       Store                  Create Order   Change Order       Delivery                       Cancel Order     Pickup
                    Product                                                                                                      Return




                   Research                                 Schedule Delivery   Check Status                   Schedule      Initiate/Track
     Call Center              Create Order   Change Order      or Pickup                       Cancel Order
                    Product                                                                                   Store Pickup       Return




                   Research                                 Schedule Delivery   Check Status                   Schedule      Initiate/Track
        Web         Product   Create Order   Change Order      or Pickup                       Cancel Order   Store Pickup       Return




                   Research                                 Schedule Delivery   Check Status                   Schedule      Initiate/Track
       Mobile       Product   Create Order   Change Order      or Pickup                       Cancel Order   Store Pickup       Return




10                                                                                                                              © 2011 IBM Corporation
IBM Commerce Solutions


         Consumers Have Come To Expect Seamless Cross-Channel Retail
         Execution




                             85% of respondents “expect a seamless
                          experience across all channels for a retailer”. 1




     1   Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



11                                                                                                             © 2011 IBM Corporation
IBM Commerce Solutions


         Increasingly, Consumers Expect You To Operate Seamlessly Within Your
         Brand



                          Importance Of Cross-Channel Capabilities 1
 Notify when item is ready for in-store pickup (important to very important)                                           91%
 Maintain cross-channel customer history (important to very important)                                                 53%
 Notify when frequently-purchased item will be on sale (important to very                                              59%
 important)
 Assist with matching the compatibility of a new purchase with a
                                                                                                                       49%
 previous purchase (important to very important)

                 = Requires cross-channel capabilities




     1   Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



12                                                                                                             © 2011 IBM Corporation
IBM Commerce Solutions



     Even Consumers’ Expectations for Mobile Apps Include Cross-Channel


               Most Desirable Mobile App Capabilities
   Look up and verify product availability at a particular location                                             62%
   Look up price of an item while in the store                                                                  57%
   Find nearest store location                                                                                  49%
   Receive pro-active notification about status of outstanding orders                                           48%
  Locate an OOS item at an in-stock location, purchase it, and have it
                                                                       46%
 shipped to you or held for pickup
 Access product reviews while in the store                                                                      46%
           = Requires cross-channel capabilities


  Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



      13                                                                                                © 2011 IBM Corporation
IBM Commerce Solutions


         Consumers’ Expectations Keep Increasing


                                                   2007-2010 Comparisons1
 Cross-Channel Consumer Expectations                                                                           2007            2010
 Complete an order anywhere                                                                                    55%             61%
 Modify an order anywhere                                                                                      65%             74%
 Track an order anywhere                                                                                       56%             87%
 Shipping Notice (via any combination of channels)                                                             94%             88%
 Shipping Delays (via any combination of channels)                                                             91%             91%
 Delivery Notice (via any combination of channels)                                                             78%             79%
 Cross-channel return to store                                                                                 90%             84%
                 = Requires cross-channel capabilities

     1   Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



14                                                                                                                    © 2011 IBM Corporation
IBM Commerce Solutions


     Other Retailers Are Responding To Their Customers’ Cross-Channel
     Expectations



                                               69%
            In-store pickup of cross-channel orders
           Currently support (46%); plan to support in 12
                         months (23%) 1




                                                                        77%
                                                       In-store returns of on-line purchases
                                                     Currently support (57%); plan to support in 12
                                                                   months (20%) 1


     Source: Edge Research Retailer Survey; 2010


15                                                                                           © 2011 IBM Corporation
IBM Commerce Solutions


     Other Retailers Are Responding To Their Customers’ Cross-Channel
     Expectations



                                               76%
             Cross-channel order/shipment status
                              tracking
           Currently support (47%); plan to support in 12
                         months (29%) 1




                                                                        76%
                                                      Single cross-channel view of customer
                                                                      purchases
                                                     Currently support (40%); plan to support in 12
                                                                   months (36%) 1

     Source: Edge Research Retailer Survey; 2010


16                                                                                           © 2011 IBM Corporation
IBM Commerce Solutions


     But, Few Retailers With Cross-Channel Capabilities Are Satisfied With
     Their Current Approach




             % of Retailers Satisfied With Current Capabilities 1
     Customers can complete an order via any combination of channels          22%

     Customers receive order, shipment, and delivery status updates           24%

     Overall ability to deliver cross-channel capabilities                    21%




     Source: Edge Research Retailer Survey; 2010


17                                                                    © 2011 IBM Corporation
IBM Commerce Solutions


     Cross-Channel Execution (Enabled By Cross-Channel Order Management)
     Delivers Results


      Macy’s: Every advertising dollar spent online influences $5.77 spent in the
       store over the next 10 days1

      REI: 40% of online orders are picked up in-store, with 35% of pickups
       resulting in additional sales that average $90 per sale1

      Best Buy: Best Buy, recognized as a leader in cross-channel retailing, has
       achieved a 40% buy online/pick up in store rate2

      Nordstrom: Multi-Channel customers spend, on average, four times more
       than single channel buyers1




     1. Source: Deloitte Research, Forrester Research, Internet Retail Offline Influence Model:
     2. Source: CEO Brian Dunn- 9/21/2010-RIS News
18                                                                                                © 2011 IBM Corporation
IBM Commerce Solutions



     AGENDA

               A trip to Cross-Channel Nirvana


               Why Retail Cross-Channel


               The Cross-Channel Participants


               IBM’s Smarter Commerce Portfolio


               Example Results of Cross-Channel



19
19                                                © 2011 IBM Corporation
IBM Commerce Solutions




   There are Lots of Participants

                                                            Customer Channels


                Call Center                     Kiosk                   eCommerce           Mobile                   Store




                         Distribution Centers           Drop Shippers               3PL’s            Store Network
  Enterprise                                                                                                                 External
 Applications                                                                                                                Services




                                                            Fulfillment Network.




                                                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions




                      Various Expectations
                                                                         Customer Channels


                            Call Center                      Kiosk                   eCommerce           Mobile                   Store




                                               Can We Set Accurate Expectations with the Customer?




                                                                                                                                                     Performance Management?
Global Visibility ?




                                           What Steps are Required to Fulfill each Specific Order Line?
                        Enterprise                                                                                                External
                       Applications           How do we Coordinate these Steps Across Applications?                               Services

                                              What are the Fulfillment Rules for a Specific Order Line?
                                                  How do we Best Leverage the Fulfillment Network?
                                                 How do we Remain Flexible to Enable New Business
                                                                   Initiatives?

                                      Distribution Centers           Drop Shippers               3PL’s            Store Network




                                                                         Fulfillment Network.



                                                                                                                                   © 2011 IBM Corporation
IBM Commerce Solutions




   This Can Get Complex
                                                            Customer Channels


             Call Center                        Kiosk                   eCommerce           Mobile                   Store




        Enterprise                                                                                                   External
       Applications                                                                                                  Services




                         Distribution Centers           Drop Shippers               3PL’s            Store Network




                                                            Fulfillment Network.



                                                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions




                      IBM  Sterling Approach
                                                                         Customer Channels


                            Call Center                      Kiosk                   eCommerce           Mobile                   Store




                                                                                                                                                     Performance Management?
Global Visibility ?




                                                       Sterling Cross Channel Inventory and Order Hub
                        Enterprise                                                                                                External
                       Applications                                                                                               Services

                                                   Promising                     Order
                                                                                                         Visibility
                                                     (ATP)                    Orchestration




                                      Distribution Centers           Drop Shippers               3PL’s            Store Network




                                                                         Fulfillment Network.



                                                                                                                                   © 2011 IBM Corporation
IBM Commerce Solutions



    A Single Source of the Truth…
   In-Store                                                On Line (web)




                                            Sterling
                                            Platform



   Call Center                                                   iPhone                RF
 Enable single face to customer with access to information about any order from any channel or
 division to be available where and when a customer needs it.

                                                                                       © 2011 IBM Corporation
IBM Commerce Solutions



     AGENDA

               A trip to Cross-Channel Nirvana


               Why Retail Cross-Channel


               The Cross-Channel Participants


               IBM’s Smarter Commerce


               Example Results of Cross-Channel



25
25                                                © 2011 IBM Corporation
IBM Commerce Solutions




   There are Various Approaches




                                  © 2011 IBM Corporation
IBM Commerce Solutions


Broad Representation of Interfaces

                         Store     Web          POS              Call Center          Other




                                 Warehouse(s)         Store(s)                 Other(s)

                                                                                              © 2011 IBM Corporation
IBM Commerce Solutions


 There are 4 Distinct Capabilities Needed to Project a Single Face to the Customer

3 Synchronized
   Multi-Tiered                                                                          1 Multi-Channel
    Fulfillment
                          Repair Depots
                                              2Single Point of                                Order Capture
                                                                                Field
                                                Order Visibility                Sales
                                                                                                                   Diverse
                                                                                                                  Customers
                                                                                                                  & Partners
                                                                SLAs,                          CSR
      Plants /                                                  Customer
     Warehouses                           Business              Mandates
                                           Unit 1
                                                                                                          Web
                                                     ERP 1                                                Store
                                 Business                     Order
    Contract                      Unit 2       ERP 2           Hub
  Manufacturers

                                      Acquired                                                       Field Sales
                                                                     VAN,                              Mobile
                                      Company        Legacy
                                                                     IaaS
                                                     System
                                                                                                Named
   LSPs / Carriers                                   4     Customer                            Accounts
                                                                                         Store / Service
                                                         Integration &                       Center
                                                          Compliance        EDI, Email, Fax
                   Channel                                 Platform
                   Partners
                                 Banks / Payment
                                   Processors

                                                                                                          © 2011 IBM Corporation
IBM Commerce Solutions


IBM’s integrated portfolio for Smarter Commerce
                                                VALUE CHAIN STRATEGY AND SERVICES
     Innovation and business value                      Market and customer mgmt.                        Operating and Organization Models
     Innovating and aligning business models to          Aligning sales, marketing and operations           Designing operations, supply chain and the 
            drive value to the customer                         to engage with customers                   organization model to deliver customer value



                                                          CORE BUSINESS SOLUTIONS
                                                               Core Business Processes

        Buy                                    Market                                 Sell                                   Service
       • Trading Partner Mgmt..             • Predictive Analytics/Modeling       • B2B & B2C Cross‐channel              • Delivery & Service 
       • Supplier Management                • Behavioral Segmentation               commerce                               Scheduling
       • Supply Chain Visibility            • Cross‐channel Campaign              • Distributed Order Orchestration      • Customer Self Service 
       • Logistics Management                 Mgmt.                               • Fulfillment  and Supply Chain          Enablement
       • Inventory Optimization             • Search Optimization, Ad               Optimization                         • Reverse Logistics
                                              Targeting                           • Mobile Commerce                      • Case Management
                                            • Marketing Resource Mgmt.            • Retail Store


                                                                  Advanced Analytics
       Store analytics  |  Purchase analytics  |  Consumer loyalty  |  Predictive and prescriptive  |  Social analytics |  Web analytics |  Master data  mgt

                                                           Workload Optimized Systems
                      Systems, Storage and Software focused on agility, integration and automation to drive relevant business outcomes


29                                                                                                                                         © 2011 IBM Corporation
IBM Commerce Solutions


IBM’s integrated portfolio for Smarter Commerce
                                           VALUE CHAIN STRATEGY AND SERVICES

                                                       CORE BUSINESS SOLUTIONS
                                                                Core business processes

                   Buy                                    Market                                          Sell                                      Service
      Sourcing and procuring goods                Developing, delivering, and                                                             Servicing customer needs across
                                                                                           Selling and fulfillment of products
     and materials required to deliver             measuring relevant and                                                                   all interaction channels to drive
                                                                                             and services across multiple
      products and services to meet              consistent messages across                                                               repeat sales and enhance lifetime
                                                                                                 channels to drive sales
           customer demand                        multiple channels to drive                                                                       value of a customer
                                                           demand
                                                      Coremetrics
                                                      • Digital Analytics                • Cross‐Channel Order Capture, Cart 
           Sterling Commerce                          • Behavioral Segmentation            and Catalog
                                                                                                                                           Sterling Commerce
           • Warehouse Management                     • Search Optimization, Ad                                                            • Delivery and service Scheduling
                                                                                         • Customer‐centric Shopping Experience
           • Transportation Management                  Targeting, and Real‐time                                                           • Reverse Logistics
                                                                                         • B2C/B2B Storefronts
           • Supply Chain Visibility                    Website                          • Mobile 
           • Sterling Collaboration                     Recommendations
             Network/B2B Services
                                                                                                                                             •Customer Self Serve 
                                                         Unica                                                                                 Portals
             ILOG Supply Chain                           • Cross‐channel             Retail Store Solutions  Sterling Commerce
             • Product Optimization                                                                                                          •Call Center
                                                           Campaign Mgmt             • Retail POS Solutions • Distributed Order              •Collaboration 
             • Inventory Optimization                    • Real‐time Decision,       • Self‐Service            Management
             • Network Optimization                                                                                                            Environments
                                                           Event Detection, and        Portal/Kiosk          • Configuration, Pricing,       • Case Design, Run‐time, 
             • Transportation                              Contact Optimization      • POS Applications        Quoting
               Optimization                                                                                                                    Analytics
                                                         • Operations Mgmt                                   • Multi‐vendor catalog




                                                        Advanced Customer Insight

30                          GBS Smarter Commerce Sales Enablement Training | Introduction to Smarter Commerce Products                                         © 2011 IBM Corporation
IBM Commerce Solutions



                         Questions/Discussion




     ThMJ@dk.ibm.com

                                                © 2011 IBM Corporation
IBM Commerce Solutions



     AGENDA

               A trip to Cross-Channel Nirvana


               Why Retail Cross-Channel


               The Cross-Channel Participants


               IBM’s Smarter Commerce


               Example Results of Cross-Channel



32
32                                                © 2011 IBM Corporation
IBM Commerce Solutions


     Key Cross-Channel Retailing Direct Impact Areas
      In-Store Pickup
         – Impact: Additional in-store purchases (cross-sell/up-sell)
      In-Store Returns
         – Impact: In-store purchases (converting the return back into a sale)
      Recovering From Out Of Stocks (OOSs)
         – Impact: Sale of the OOS item
         – Impact: Sale of companion items
         – Impact: Salvaged future shopping trips
      Cross-Channel Sourcing
         – Impact: Avoiding duplicate safety stock
      Available-To-Promise Sourcing
         – Impact: Inventory reductions by sourcing from in-transit inventory (before it
           arrives at the DC)
      Sourcing From End-Of-Life (EOL) Inventory
         – Impact: Reduced markdowns by sourcing from inventory pools with excess
           inventory




33                                                                             © 2011 IBM Corporation
IBM Commerce Solutions


     Key Cross-Channel Retailing Direct Impact Areas
      In-Store Pickup
         – Impact: Additional in-store purchases (cross-sell/up-sell)
             – Drive additional in-store traffic
                  – 40% of those making online or mobile purchases will choose in-store
                    pickup as their fulfillment method
             – Cross-sell/Up-sell
                  – 38% of those opting for in-store pickup of online, catalog, or mobile
                    orders are likely to highly likely to make additional purchases while in
                    the store
                  – Retailers with high attach rates benefit even more (e.g., general
                    merchandise, apparel, electronics, toys, sporting goods,
                    hardlines/home improvement, etc.)
             – Avoided shipping overhead
                  – For every in-store pickup of an online, catalog, or mobile order, the
                    retailer avoids the shipping overhead that would have been incurred



  Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



34                                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions


     Key Cross-Channel Retailing Direct Impact Areas
      In-Store Returns
         – Impact: Additional in-store purchases (cross-sell/up-sell)
             – Drive additional in-store traffic
                  – 46% of those making online or mobile purchases will choose to return
                    their purchase to a store
             – Cross-sell/Up-sell
                  – 33% of those opting for in-store return of online, catalog, or mobile
                    purchases are likely to highly likely to make additional purchases
                    while in the store
                  – Retailers with high attach rates benefit even more (e.g., general
                    merchandise, apparel, electronics, toys, sporting goods,
                    hardlines/home improvement, etc.)
             – Avoided shipping overhead
                  – For retailers that do not charge customers for shipping returned goods
                    back to the retailer, for every in-store return of an online, catalog, or
                    mobile order, the retailer avoids the shipping overhead that would
                    have been incurred
  Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare



35                                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions


     Key Cross-Channel Retailing Direct Impact Areas
      Recovering From Out Of Stocks (OOSs)
        – Impact: Sale of the OOS item
                – 66% of consumers would purchase an OOS item if the retailer could find it at an in-
                  stock location and ship it to the customer
                – For those cases where the retailer has the item in stock somewhere, they could save
                  the sale 66% of the time
          – Impact: Sale of companion items
                – 42% of consumers faced with an OOS leave the store without purchasing anything
                – For every saved sale, the retailer has the likelihood of selling attachment items 42%
                  of the time
          – Impact: Salvaged future shopping trips
                – For every saved sale, there’s the potential to save the sales associated with one or
                  more future shopping trips
                     – 29% of consumers who experience an OOS will forfeit at least one future
                       shopping trip to that retailer
                     – 13% of consumers who experience an OOS will forfeit at least two future
                       shopping trips to that retailer
                     – 6% of consumers who experience an OOS will forfeit three or more future
                       shopping trips to that retailer

  Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
36                                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions


     Key Cross-Channel Retailing Direct Impact Areas
      Cross-Channel Sourcing
        – Impact: Avoiding duplicate safety stock [liberated capital; avoided working capital
          interest]
              – For those SKUs that are common across channels, the ability to source across
                channels enables the retailer to reduce duplicate safety stock
      Available-To-Promise Sourcing
        – Impact: Inventory reductions by sourcing from in-transit inventory (before it arrives at the
          DC) [liberated capital; avoided working capital interest]
              – Internet, catalog, and mobile items can be sourced from inventory that has yet to
                arrive at the direct-to-consumer shipping site
              – For those SKUs, every additional day’s orders that can be sourced from in-transit or
                on-order inventory is another day’s inventory that can be reduced for those SKUs
      Sourcing From End-Of-Life (EOL) Inventory
        – Impact: Reduced markdowns by sourcing from inventory pools with excess inventory
              – For EOL inventory that is at risk of being marked down (in order to sell the
                merchandise), the ability to source across channels from pools of excess inventory
                enables the retailer to sell the product at full price and avoid the markdown




37                                                                                      © 2011 IBM Corporation
IBM Commerce Solutions


       Consumers Will Reward Retailers That Make The Desired Cross-Channel
       Improvements


                                                             Likelihood to spend more with retailer if
                                                                     improvements are made


                                                         Yes                                                   58%




                                                           No                    19%
                                                                                                                US


                                                   Not sure                           23%



                                                                0%        10%   20%     30%    40%       50%   60%   70%

                                                                                      Percent selected



     Source: IBM Institute for Business Value Analysis, Retail 2010, n=13,960



38                                                                                                                         © 2011 IBM Corporation
IBM Commerce Solutions


     Nordstrom Results
     “Nordstrom has implemented several solutions within Sterling Selling and Fulfillment Suite,
     including Sterling Catalog and Offer Management and Sterling Order Management, to enhance its
     order capture and fulfillment capabilities. A critical element of the Sterling Commerce implementation is the centralized
     order hub that synchronizes and orchestrates customer orders, without having to replace warehouse or distribution
     systems. Instead, the software extends Nordstrom’s existing systems to help improve service, make more efficient use
     of inventory and reduce costs. For example, Nordstrom is able to open-up website inventory to the stores, operating a
     single distribution center to fulfill deliveries for every channel. The end result is a better shopping experience for the
     consumer and better control over the entire fulfillment lifecycle for the retailer. ”

     Nordstrom’s efforts are paying off.
     According to their quarterly sales report (8K) dated August 12, 2010:
          • $2.52 billion in revenue, up roughly 13% from the year ago period
          • Net earnings increase of $41 million compared with the same period in fiscal 2009
          • Multi-channel same-store sales increased 9.9% compared with the same period in fiscal 2009
          • Full-line same-store sales in the second quarter increased 8.2%
          • Direct sales increased 34.1% compared with the same period in 2009
          • Same-store sales during the Anniversary Sale event increased 9.0%

     In the 8k report Nordstrom credits the shared inventory platform between full-line stores and the Direct business for improved
     financial results, because this platform enables better fulfillment of customer demand and greater access to inventory.
     Nordstrom was also able to reorganize the business as a single, "multi-channel" operating segment, which reduces costs and
     improves their ability to serve customers well. From Nordstrom's 10Q filed 09/08/2010,
     "Through our multi-channel initiatives, we have substantially integrated the operations,
     merchandising and technology of our Nordstrom full-line and online stores, consistent with our
     customers' expectations of a seamless shopping experience regardless of channel.”

39                                                                                                                  © 2011 IBM Corporation
IBM Commerce Solutions


     Press Release Source: Best Buy Co., Inc. 9/23/2010; 1:55 a.m. EDT

     MINNEAPOLIS--(BUSINESS WIRE)--Best Buy (NYSE: BBY - News) makes
     holiday shopping even easier this year by offering one of the most comprehensive
     shipping programs in the retail landscape, Store Pickup Plus.

     The Store Pickup Plus program consists of the following capabilities:

 • Store Pickup: Buy online, skip the shipping charge and pick up an order in as little
   as 45 minutes after placing it.
 • Ship-To-Store: Out-of-stock products that are available online can be shipped to
   any Best Buy store for customer pickup, without any shipping fees.
 • Friends & Family Pickup: Place an order online and have someone else pick it
   up, avoiding an inconvenient trip to the store or giving an out-of-town relative
   immediate access to a purchase.
 • Warehouse Pickup: Avoid delivery charges and scheduling conflicts by picking up
   products directly from a local Best Buy warehouse. This is an expedient option for
   appliance purchases and same-day pickup.

     With each of the program options, customers will be notified via email when their
     product is ready for pickup, creating an overall expedient and efficient on-site
     transaction.

40                                                                            © 2011 IBM Corporation
IBM Commerce Solutions



     Retailers Who Enable Cross-Channel Order And Inventory Visibility
     And Cross-Channel Execution Enjoy Quantifiable Benefits
  85% report improved customer satisfaction from ensuring product
   information and pricing is up to date and consistent across channels
  40% report a 2-5% increase in eCommerce profitability
  29% report a 5-10% increase in overall return on inventory investment
  25% report a 2-5% decrease in warehouse space requirements while another
   20% report a 5-10% decrease in space requirements
  33% report a 2-5% increase in overall inventory turn while another 25%
   report a 5-10% improvement in the same metric
  31% report a 5-10% improvement in gross margin percent
  24% report a 2-5% sales lift on cross-channel promotions while another
   20% report a 5-10% lift and a very surprising 22% report a 10-25%
   improvement.
  27% report a 5-10% improvement in fill rates
      Source: Cross-Channel Retailing For The Anytime, Anywhere Consumer; Benchmark Study, 2009 – Brian Kilcourse, Paula Rosenblum,
      RSR [“benefits achieved by retailers who enable cross‐channel order and inventory visibility and enabling cross‐channel processes”]
41                                                                                                                                          © 2011 IBM Corporation
IBM Commerce Solutions


 Additional Validation

 There are two undeniable facts of being a retailer in 2010:
  Online sales outpace brick-and-mortar sales growth rates by 3-5x.
  Customers increasingly expect retailers to leverage technology to provide a
   consistent, efficient and satisfying buying experience across channels.

 Retailers who implement demand-optimized multi-channel inventory, order, and
   fulfillment
 applications will enjoy the following benefits:
        –   Reduced stock-outs
        –   Improved sales: 15%-35% increase in average transaction size
        –   Higher customer retention rates
        –   Fewer lost sales: e.g., increased online conversion rates between 30% and 45%
        –   5%-10% increase in loyalty customer profitability
        –   20%-60% reduction of inventory losses as a percentage of sales

                         –                                           Leslie Hand-IDC Retail Insights




42                                                                                      © 2011 IBM Corporation

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Seamless Cross-Channel Retail Execution, Thomas Møller Jensen, IBM

  • 1. Thomas Møller Jensen Seamless Cross-Channel Retail Execution Web, Mobile, & Store © Copyright IBM Corporation 2011
  • 2. IBM Commerce Solutions AGENDA A trip to Cross-Channel Nirvana Why Retail Cross-Channel The Cross-Channel Participants IBM’s Smarter Commerce Portfolio Example Results of Cross-Channel 2 2 © 2011 IBM Corporation
  • 3. IBM Commerce Solutions Cross-Channel ? Shopping Mobile Phone Shop Field Marketing Apps Social network Web Direct Mail ... Online TV ... Fulfillment Delivered Services In Shop Pick-up Direct Mail ... 3 © 2011 IBM Corporation
  • 4. IBM Commerce Solutions Cross-Channel Nirvana @ Stables 4 © 2011 IBM Corporation
  • 5. IBM Commerce Solutions Cross-Channel Nirvana recap  Social media integration Marketing  Accurate inventory information Fulfillment  Location based promotion Shopping  Rewards program/CRM Marketing  Cross/Up sell Shopping  Split payment (Online/Shop) Fulfillment  One View of Customer and Order at all times Marketing Shopping Fulfillment 5 © 2011 IBM Corporation
  • 6. IBM Commerce Solutions AGENDA A trip to Cross-Channel Nirvana Why Retail Cross-Channel The Cross-Channel Participants IBM’s Smarter Commerce Portfolio Example Results of Cross-Channel 6 6 © 2011 IBM Corporation
  • 7. IBM Commerce Solutions Consumers Are More “Instrumented” Than Ever Before Source: “Capitalizing on the smarter consumer”, IBM Global Business Services Executive Report, 2011 7 © 2011 IBM Corporation
  • 8. IBM Commerce Solutions Consumers Are More Interconnected And Intelligent Than Ever Before Customer 8 © 2011 IBM Corporation
  • 9. IBM Commerce Solutions Today’s ‘Smarter Consumer’ Sees One Brand, Not Multiple Channels 9 © 2011 IBM Corporation
  • 10. IBM Commerce Solutions Consumers’ Interactions With Your Brand Are Varied And Ever Changing Research Schedule Check Status Initiate/Track Store Create Order Change Order Delivery Cancel Order Pickup Product Return Research Schedule Delivery Check Status Schedule Initiate/Track Call Center Create Order Change Order or Pickup Cancel Order Product Store Pickup Return Research Schedule Delivery Check Status Schedule Initiate/Track Web Product Create Order Change Order or Pickup Cancel Order Store Pickup Return Research Schedule Delivery Check Status Schedule Initiate/Track Mobile Product Create Order Change Order or Pickup Cancel Order Store Pickup Return 10 © 2011 IBM Corporation
  • 11. IBM Commerce Solutions Consumers Have Come To Expect Seamless Cross-Channel Retail Execution 85% of respondents “expect a seamless experience across all channels for a retailer”. 1 1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 11 © 2011 IBM Corporation
  • 12. IBM Commerce Solutions Increasingly, Consumers Expect You To Operate Seamlessly Within Your Brand Importance Of Cross-Channel Capabilities 1 Notify when item is ready for in-store pickup (important to very important) 91% Maintain cross-channel customer history (important to very important) 53% Notify when frequently-purchased item will be on sale (important to very 59% important) Assist with matching the compatibility of a new purchase with a 49% previous purchase (important to very important) = Requires cross-channel capabilities 1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 12 © 2011 IBM Corporation
  • 13. IBM Commerce Solutions Even Consumers’ Expectations for Mobile Apps Include Cross-Channel Most Desirable Mobile App Capabilities Look up and verify product availability at a particular location 62% Look up price of an item while in the store 57% Find nearest store location 49% Receive pro-active notification about status of outstanding orders 48% Locate an OOS item at an in-stock location, purchase it, and have it 46% shipped to you or held for pickup Access product reviews while in the store 46% = Requires cross-channel capabilities Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 13 © 2011 IBM Corporation
  • 14. IBM Commerce Solutions Consumers’ Expectations Keep Increasing 2007-2010 Comparisons1 Cross-Channel Consumer Expectations 2007 2010 Complete an order anywhere 55% 61% Modify an order anywhere 65% 74% Track an order anywhere 56% 87% Shipping Notice (via any combination of channels) 94% 88% Shipping Delays (via any combination of channels) 91% 91% Delivery Notice (via any combination of channels) 78% 79% Cross-channel return to store 90% 84% = Requires cross-channel capabilities 1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 14 © 2011 IBM Corporation
  • 15. IBM Commerce Solutions Other Retailers Are Responding To Their Customers’ Cross-Channel Expectations 69% In-store pickup of cross-channel orders Currently support (46%); plan to support in 12 months (23%) 1 77% In-store returns of on-line purchases Currently support (57%); plan to support in 12 months (20%) 1 Source: Edge Research Retailer Survey; 2010 15 © 2011 IBM Corporation
  • 16. IBM Commerce Solutions Other Retailers Are Responding To Their Customers’ Cross-Channel Expectations 76% Cross-channel order/shipment status tracking Currently support (47%); plan to support in 12 months (29%) 1 76% Single cross-channel view of customer purchases Currently support (40%); plan to support in 12 months (36%) 1 Source: Edge Research Retailer Survey; 2010 16 © 2011 IBM Corporation
  • 17. IBM Commerce Solutions But, Few Retailers With Cross-Channel Capabilities Are Satisfied With Their Current Approach % of Retailers Satisfied With Current Capabilities 1 Customers can complete an order via any combination of channels 22% Customers receive order, shipment, and delivery status updates 24% Overall ability to deliver cross-channel capabilities 21% Source: Edge Research Retailer Survey; 2010 17 © 2011 IBM Corporation
  • 18. IBM Commerce Solutions Cross-Channel Execution (Enabled By Cross-Channel Order Management) Delivers Results  Macy’s: Every advertising dollar spent online influences $5.77 spent in the store over the next 10 days1  REI: 40% of online orders are picked up in-store, with 35% of pickups resulting in additional sales that average $90 per sale1  Best Buy: Best Buy, recognized as a leader in cross-channel retailing, has achieved a 40% buy online/pick up in store rate2  Nordstrom: Multi-Channel customers spend, on average, four times more than single channel buyers1 1. Source: Deloitte Research, Forrester Research, Internet Retail Offline Influence Model: 2. Source: CEO Brian Dunn- 9/21/2010-RIS News 18 © 2011 IBM Corporation
  • 19. IBM Commerce Solutions AGENDA A trip to Cross-Channel Nirvana Why Retail Cross-Channel The Cross-Channel Participants IBM’s Smarter Commerce Portfolio Example Results of Cross-Channel 19 19 © 2011 IBM Corporation
  • 20. IBM Commerce Solutions There are Lots of Participants Customer Channels Call Center Kiosk eCommerce Mobile Store Distribution Centers Drop Shippers 3PL’s Store Network Enterprise External Applications Services Fulfillment Network. © 2011 IBM Corporation
  • 21. IBM Commerce Solutions Various Expectations Customer Channels Call Center Kiosk eCommerce Mobile Store Can We Set Accurate Expectations with the Customer? Performance Management? Global Visibility ? What Steps are Required to Fulfill each Specific Order Line? Enterprise External Applications How do we Coordinate these Steps Across Applications? Services What are the Fulfillment Rules for a Specific Order Line? How do we Best Leverage the Fulfillment Network? How do we Remain Flexible to Enable New Business Initiatives? Distribution Centers Drop Shippers 3PL’s Store Network Fulfillment Network. © 2011 IBM Corporation
  • 22. IBM Commerce Solutions This Can Get Complex Customer Channels Call Center Kiosk eCommerce Mobile Store Enterprise External Applications Services Distribution Centers Drop Shippers 3PL’s Store Network Fulfillment Network. © 2011 IBM Corporation
  • 23. IBM Commerce Solutions IBM Sterling Approach Customer Channels Call Center Kiosk eCommerce Mobile Store Performance Management? Global Visibility ? Sterling Cross Channel Inventory and Order Hub Enterprise External Applications Services Promising Order Visibility (ATP) Orchestration Distribution Centers Drop Shippers 3PL’s Store Network Fulfillment Network. © 2011 IBM Corporation
  • 24. IBM Commerce Solutions A Single Source of the Truth… In-Store On Line (web) Sterling Platform Call Center iPhone RF Enable single face to customer with access to information about any order from any channel or division to be available where and when a customer needs it. © 2011 IBM Corporation
  • 25. IBM Commerce Solutions AGENDA A trip to Cross-Channel Nirvana Why Retail Cross-Channel The Cross-Channel Participants IBM’s Smarter Commerce Example Results of Cross-Channel 25 25 © 2011 IBM Corporation
  • 26. IBM Commerce Solutions There are Various Approaches © 2011 IBM Corporation
  • 27. IBM Commerce Solutions Broad Representation of Interfaces Store Web POS Call Center Other Warehouse(s) Store(s) Other(s) © 2011 IBM Corporation
  • 28. IBM Commerce Solutions There are 4 Distinct Capabilities Needed to Project a Single Face to the Customer 3 Synchronized Multi-Tiered 1 Multi-Channel Fulfillment Repair Depots 2Single Point of Order Capture Field Order Visibility Sales Diverse Customers & Partners SLAs, CSR Plants / Customer Warehouses Business Mandates Unit 1 Web ERP 1 Store Business Order Contract Unit 2 ERP 2 Hub Manufacturers Acquired Field Sales VAN, Mobile Company Legacy IaaS System Named LSPs / Carriers 4 Customer Accounts Store / Service Integration & Center Compliance EDI, Email, Fax Channel Platform Partners Banks / Payment Processors © 2011 IBM Corporation
  • 29. IBM Commerce Solutions IBM’s integrated portfolio for Smarter Commerce VALUE CHAIN STRATEGY AND SERVICES Innovation and business value Market and customer mgmt. Operating and Organization Models Innovating and aligning business models to  Aligning sales, marketing and operations  Designing operations, supply chain and the  drive value to the customer to engage with customers organization model to deliver customer value CORE BUSINESS SOLUTIONS Core Business Processes Buy Market Sell Service • Trading Partner Mgmt.. • Predictive Analytics/Modeling • B2B & B2C Cross‐channel  • Delivery & Service  • Supplier Management • Behavioral Segmentation commerce Scheduling • Supply Chain Visibility • Cross‐channel Campaign  • Distributed Order Orchestration • Customer Self Service  • Logistics Management Mgmt. • Fulfillment  and Supply Chain  Enablement • Inventory Optimization • Search Optimization, Ad  Optimization • Reverse Logistics Targeting • Mobile Commerce • Case Management • Marketing Resource Mgmt. • Retail Store Advanced Analytics Store analytics  |  Purchase analytics  |  Consumer loyalty  |  Predictive and prescriptive  |  Social analytics |  Web analytics |  Master data  mgt Workload Optimized Systems Systems, Storage and Software focused on agility, integration and automation to drive relevant business outcomes 29 © 2011 IBM Corporation
  • 30. IBM Commerce Solutions IBM’s integrated portfolio for Smarter Commerce VALUE CHAIN STRATEGY AND SERVICES CORE BUSINESS SOLUTIONS Core business processes Buy Market Sell Service Sourcing and procuring goods Developing, delivering, and Servicing customer needs across Selling and fulfillment of products and materials required to deliver measuring relevant and all interaction channels to drive and services across multiple products and services to meet consistent messages across repeat sales and enhance lifetime channels to drive sales customer demand multiple channels to drive value of a customer demand Coremetrics • Digital Analytics • Cross‐Channel Order Capture, Cart  Sterling Commerce • Behavioral Segmentation and Catalog Sterling Commerce • Warehouse Management • Search Optimization, Ad  • Delivery and service Scheduling • Customer‐centric Shopping Experience • Transportation Management Targeting, and Real‐time  • Reverse Logistics • B2C/B2B Storefronts • Supply Chain Visibility Website  • Mobile  • Sterling Collaboration  Recommendations Network/B2B Services •Customer Self Serve  Unica Portals ILOG Supply Chain • Cross‐channel  Retail Store Solutions  Sterling Commerce • Product Optimization •Call Center Campaign Mgmt • Retail POS Solutions • Distributed Order  •Collaboration  • Inventory Optimization • Real‐time Decision,  • Self‐Service  Management • Network Optimization Environments Event Detection, and  Portal/Kiosk • Configuration, Pricing,  • Case Design, Run‐time,  • Transportation  Contact Optimization • POS Applications Quoting Optimization Analytics • Operations Mgmt  • Multi‐vendor catalog Advanced Customer Insight 30 GBS Smarter Commerce Sales Enablement Training | Introduction to Smarter Commerce Products © 2011 IBM Corporation
  • 31. IBM Commerce Solutions Questions/Discussion ThMJ@dk.ibm.com © 2011 IBM Corporation
  • 32. IBM Commerce Solutions AGENDA A trip to Cross-Channel Nirvana Why Retail Cross-Channel The Cross-Channel Participants IBM’s Smarter Commerce Example Results of Cross-Channel 32 32 © 2011 IBM Corporation
  • 33. IBM Commerce Solutions Key Cross-Channel Retailing Direct Impact Areas  In-Store Pickup – Impact: Additional in-store purchases (cross-sell/up-sell)  In-Store Returns – Impact: In-store purchases (converting the return back into a sale)  Recovering From Out Of Stocks (OOSs) – Impact: Sale of the OOS item – Impact: Sale of companion items – Impact: Salvaged future shopping trips  Cross-Channel Sourcing – Impact: Avoiding duplicate safety stock  Available-To-Promise Sourcing – Impact: Inventory reductions by sourcing from in-transit inventory (before it arrives at the DC)  Sourcing From End-Of-Life (EOL) Inventory – Impact: Reduced markdowns by sourcing from inventory pools with excess inventory 33 © 2011 IBM Corporation
  • 34. IBM Commerce Solutions Key Cross-Channel Retailing Direct Impact Areas  In-Store Pickup – Impact: Additional in-store purchases (cross-sell/up-sell) – Drive additional in-store traffic – 40% of those making online or mobile purchases will choose in-store pickup as their fulfillment method – Cross-sell/Up-sell – 38% of those opting for in-store pickup of online, catalog, or mobile orders are likely to highly likely to make additional purchases while in the store – Retailers with high attach rates benefit even more (e.g., general merchandise, apparel, electronics, toys, sporting goods, hardlines/home improvement, etc.) – Avoided shipping overhead – For every in-store pickup of an online, catalog, or mobile order, the retailer avoids the shipping overhead that would have been incurred Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 34 © 2011 IBM Corporation
  • 35. IBM Commerce Solutions Key Cross-Channel Retailing Direct Impact Areas  In-Store Returns – Impact: Additional in-store purchases (cross-sell/up-sell) – Drive additional in-store traffic – 46% of those making online or mobile purchases will choose to return their purchase to a store – Cross-sell/Up-sell – 33% of those opting for in-store return of online, catalog, or mobile purchases are likely to highly likely to make additional purchases while in the store – Retailers with high attach rates benefit even more (e.g., general merchandise, apparel, electronics, toys, sporting goods, hardlines/home improvement, etc.) – Avoided shipping overhead – For retailers that do not charge customers for shipping returned goods back to the retailer, for every in-store return of an online, catalog, or mobile order, the retailer avoids the shipping overhead that would have been incurred Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 35 © 2011 IBM Corporation
  • 36. IBM Commerce Solutions Key Cross-Channel Retailing Direct Impact Areas  Recovering From Out Of Stocks (OOSs) – Impact: Sale of the OOS item – 66% of consumers would purchase an OOS item if the retailer could find it at an in- stock location and ship it to the customer – For those cases where the retailer has the item in stock somewhere, they could save the sale 66% of the time – Impact: Sale of companion items – 42% of consumers faced with an OOS leave the store without purchasing anything – For every saved sale, the retailer has the likelihood of selling attachment items 42% of the time – Impact: Salvaged future shopping trips – For every saved sale, there’s the potential to save the sales associated with one or more future shopping trips – 29% of consumers who experience an OOS will forfeit at least one future shopping trip to that retailer – 13% of consumers who experience an OOS will forfeit at least two future shopping trips to that retailer – 6% of consumers who experience an OOS will forfeit three or more future shopping trips to that retailer Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare 36 © 2011 IBM Corporation
  • 37. IBM Commerce Solutions Key Cross-Channel Retailing Direct Impact Areas  Cross-Channel Sourcing – Impact: Avoiding duplicate safety stock [liberated capital; avoided working capital interest] – For those SKUs that are common across channels, the ability to source across channels enables the retailer to reduce duplicate safety stock  Available-To-Promise Sourcing – Impact: Inventory reductions by sourcing from in-transit inventory (before it arrives at the DC) [liberated capital; avoided working capital interest] – Internet, catalog, and mobile items can be sourced from inventory that has yet to arrive at the direct-to-consumer shipping site – For those SKUs, every additional day’s orders that can be sourced from in-transit or on-order inventory is another day’s inventory that can be reduced for those SKUs  Sourcing From End-Of-Life (EOL) Inventory – Impact: Reduced markdowns by sourcing from inventory pools with excess inventory – For EOL inventory that is at risk of being marked down (in order to sell the merchandise), the ability to source across channels from pools of excess inventory enables the retailer to sell the product at full price and avoid the markdown 37 © 2011 IBM Corporation
  • 38. IBM Commerce Solutions Consumers Will Reward Retailers That Make The Desired Cross-Channel Improvements Likelihood to spend more with retailer if improvements are made Yes 58% No 19% US Not sure 23% 0% 10% 20% 30% 40% 50% 60% 70% Percent selected Source: IBM Institute for Business Value Analysis, Retail 2010, n=13,960 38 © 2011 IBM Corporation
  • 39. IBM Commerce Solutions Nordstrom Results “Nordstrom has implemented several solutions within Sterling Selling and Fulfillment Suite, including Sterling Catalog and Offer Management and Sterling Order Management, to enhance its order capture and fulfillment capabilities. A critical element of the Sterling Commerce implementation is the centralized order hub that synchronizes and orchestrates customer orders, without having to replace warehouse or distribution systems. Instead, the software extends Nordstrom’s existing systems to help improve service, make more efficient use of inventory and reduce costs. For example, Nordstrom is able to open-up website inventory to the stores, operating a single distribution center to fulfill deliveries for every channel. The end result is a better shopping experience for the consumer and better control over the entire fulfillment lifecycle for the retailer. ” Nordstrom’s efforts are paying off. According to their quarterly sales report (8K) dated August 12, 2010: • $2.52 billion in revenue, up roughly 13% from the year ago period • Net earnings increase of $41 million compared with the same period in fiscal 2009 • Multi-channel same-store sales increased 9.9% compared with the same period in fiscal 2009 • Full-line same-store sales in the second quarter increased 8.2% • Direct sales increased 34.1% compared with the same period in 2009 • Same-store sales during the Anniversary Sale event increased 9.0% In the 8k report Nordstrom credits the shared inventory platform between full-line stores and the Direct business for improved financial results, because this platform enables better fulfillment of customer demand and greater access to inventory. Nordstrom was also able to reorganize the business as a single, "multi-channel" operating segment, which reduces costs and improves their ability to serve customers well. From Nordstrom's 10Q filed 09/08/2010, "Through our multi-channel initiatives, we have substantially integrated the operations, merchandising and technology of our Nordstrom full-line and online stores, consistent with our customers' expectations of a seamless shopping experience regardless of channel.” 39 © 2011 IBM Corporation
  • 40. IBM Commerce Solutions Press Release Source: Best Buy Co., Inc. 9/23/2010; 1:55 a.m. EDT MINNEAPOLIS--(BUSINESS WIRE)--Best Buy (NYSE: BBY - News) makes holiday shopping even easier this year by offering one of the most comprehensive shipping programs in the retail landscape, Store Pickup Plus. The Store Pickup Plus program consists of the following capabilities: • Store Pickup: Buy online, skip the shipping charge and pick up an order in as little as 45 minutes after placing it. • Ship-To-Store: Out-of-stock products that are available online can be shipped to any Best Buy store for customer pickup, without any shipping fees. • Friends & Family Pickup: Place an order online and have someone else pick it up, avoiding an inconvenient trip to the store or giving an out-of-town relative immediate access to a purchase. • Warehouse Pickup: Avoid delivery charges and scheduling conflicts by picking up products directly from a local Best Buy warehouse. This is an expedient option for appliance purchases and same-day pickup. With each of the program options, customers will be notified via email when their product is ready for pickup, creating an overall expedient and efficient on-site transaction. 40 © 2011 IBM Corporation
  • 41. IBM Commerce Solutions Retailers Who Enable Cross-Channel Order And Inventory Visibility And Cross-Channel Execution Enjoy Quantifiable Benefits  85% report improved customer satisfaction from ensuring product information and pricing is up to date and consistent across channels  40% report a 2-5% increase in eCommerce profitability  29% report a 5-10% increase in overall return on inventory investment  25% report a 2-5% decrease in warehouse space requirements while another 20% report a 5-10% decrease in space requirements  33% report a 2-5% increase in overall inventory turn while another 25% report a 5-10% improvement in the same metric  31% report a 5-10% improvement in gross margin percent  24% report a 2-5% sales lift on cross-channel promotions while another 20% report a 5-10% lift and a very surprising 22% report a 10-25% improvement.  27% report a 5-10% improvement in fill rates Source: Cross-Channel Retailing For The Anytime, Anywhere Consumer; Benchmark Study, 2009 – Brian Kilcourse, Paula Rosenblum, RSR [“benefits achieved by retailers who enable cross‐channel order and inventory visibility and enabling cross‐channel processes”] 41 © 2011 IBM Corporation
  • 42. IBM Commerce Solutions Additional Validation There are two undeniable facts of being a retailer in 2010:  Online sales outpace brick-and-mortar sales growth rates by 3-5x.  Customers increasingly expect retailers to leverage technology to provide a consistent, efficient and satisfying buying experience across channels. Retailers who implement demand-optimized multi-channel inventory, order, and fulfillment applications will enjoy the following benefits: – Reduced stock-outs – Improved sales: 15%-35% increase in average transaction size – Higher customer retention rates – Fewer lost sales: e.g., increased online conversion rates between 30% and 45% – 5%-10% increase in loyalty customer profitability – 20%-60% reduction of inventory losses as a percentage of sales – Leslie Hand-IDC Retail Insights 42 © 2011 IBM Corporation