120419 transform or die   ibm breakout session 1 wgoir
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IBM presentation on retail conference What´s Going on in retailing 2012 WGOIR at Nieuwegein on 19 April 2012. Includes trends and how to respond to this

IBM presentation on retail conference What´s Going on in retailing 2012 WGOIR at Nieuwegein on 19 April 2012. Includes trends and how to respond to this

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  • 1. Transform or DieSurvival in the Age of the Smarter ConsumerIBM Global Business Services
  • 2. IBM major businesses worldwide Global Provides outsourced IT Provides middleware that enables clients toTechnology infrastructure services and Software integrate systems, processes and applications, Services business process services as well as computer operating systems 38%* 23 % Global Provides professional Provides financing solutions that can be GlobalBusiness services and application customized to address specific IT needs, Financing from competitive rates to flexible paymentServices outsourcing services plans and loans 18% 2% Systems Provides advanced Our Sales and Research, Development S&D and computing, storage and and Intellectual Property organizations semiconductor technology and provide a wide spectrum of client supportTechnology Research and additional value and products 18% 1% *= External revenue / Source: Annual report 2011 / http://www.ibm.com/investor/4q11/press.phtml
  • 3. 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-purchase3
  • 4. Topics • Trends – Changes that impact retailers – Social, mobile, eCommerce throughout the shopping process “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 Lecinski4
  • 5. Changes that impact retailers Consumers use (more) information and technology throughout the shopping process – of which a large part is out of your control Aware Almost one quarter of shoppers use three or more technologies to shop & purchase Research Shopping Moment By year’s end, worldwide media Purchase tablet sales will approach 120 M Apple to Sell 30 Million iPads in 2012 Take Possession Of tablet-owning consumers 53% shop for electronics, 39% for toys, Service & Support followed by clothing (37%) and travel (26%).5 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
  • 6. Changes that impact retailers Google, Amazon, Apple and Facebook are threatening your business 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.6 Source: Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012 - Sucharita Mulpuru - February 07, 2012
  • 7. Social 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
  • 8. Social Example: Extended reach through Slideshare & Facebook 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 sites8 Source:IBM Research - http://bit.ly/ufjsqm
  • 9. Mobile Mobile phone: 2007- 2012 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 time9 Source: http://bit.ly/HTS0II / http://gs.statcounter.com/#mobile_vendor-NL-monthly-201101-201201 / http://bit.ly/x78E2v
  • 10. Mobile NASA had less technology when they put Neil Armstrong on the moon than the regular smartphone has today Apollo Guidance Computer Iphone 4S 2.048 MHz, 16 bit processor. dual-core 1 GHz Cortex-A9 64 KB ROM / 8 KB RAM A5 chipset and 512 MB of RAM10
  • 11. eCommerce eCommerce: 2007- 2012 Bol.com started in 1999 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. Turnover 1999 NLG 4,5 - 5 million11
  • 12. eCommerce Facts & Figures, if you still need more ...12
  • 13. Changes that impact retailers Two-thirds of consumers are ready to buy after researching, with the vast majority still transacting in stores but is it your store?Research Channel Purchase Channel Store 83 9 4 4Mail/TV/Radio/Blbd 81 8 4 7 Retail Store Family/ Friends 80 9 6 5 Retail Website Magazines 76 10 6 8 Portal/ Auction Retailer Website 68 20 8 4 Other Email 67 17 8 8 Search Engine 61 17 8 8 Other = 5% mobile, 8% other Social Media 56 17 14 13 Other = 7% mobile, 11% other Online Streaming 47 19 16 18 Mobile Apps 47 19 13 21 Other = 11% mobile, 10% other Shopping Portal 39 18 34 9 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%13 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]?
  • 14. Changes that impact retailers For the 33% of consumers who did not have enough information ’ to purchase, the lacking information is within the retailer’s control Aware Research Purchase Take Advocate Possession Shopping Moment 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 stock14 Source: IBM Institute for Business Value Analysis, Retail 2012, n = 28,527, PM05
  • 15. Topics • What to do – Best practices to survive (and thrive) – Influence and assist along the customers´ digital path-to-purchase User Satisfaction Navigate Store/Site Select & Advocate Choose Buy Community Trusted Source Choose Channel Create Demand15 Source: Kantar Retail analysis
  • 16. Best practices to survive How to make that work? Front-office 1.Make it easy to shop wherever, whenever Front-office 2.Personalize offers to individual customers 3.Deliver more value and fun in store 4.Offer unique products and services Back-office 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 data16 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper
  • 17. Front-Office 1: Make it easy to shop (wherever, whenever) “Were sort of more of a service for mens 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."17 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: http://bit.ly/HOzAVJ / http://bit.ly/HPwk1N
  • 18. Front-Office 2: Personalize offers: More than just past purchases and profile “Tesco is set to launch a wave of price promotions and range reviews based on the affluence of areas.”18 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://tgr.ph/ACSCVl / http://bit.ly/peSwmu / / Global Technology Outlook 2012
  • 19. Front-Office 3: Deliver more value and fun in store “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 Apple19 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HN5IvQ / / http://bit.ly/v3qMEL
  • 20. Front-Office 4: Offer unique products & services (to prevent “showrooming”) Store = Showroom Store = Experience Ability to handle digitally: Ability to handle digitally: Content × Content Community Community Commerce Commerce × Social activity × Social activity × Frequency × Frequency "Offering people personalized prices through their mobile device may be the most effective way to beat showrooming"20 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / pwc.com/multichannelsurvey
  • 21. Front-Office 4: Add unique products & services “Retailers realize that the competition isnt between stores and websites, but between their websites and those of others”21 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / pwc.com/multichannelsurvey
  • 22. Back-office 5: Enhance the added value of store associates 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. “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 Borntein22 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HKCSgA / www.sephora.com
  • 23. Back-office 6: Move to smaller stores and more focused assortments Non-food offer limited Proximity and to daily needs convenience "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 CEO23 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Planet retail - Is there a future for hypermarkets? / http://bit.ly/HWVRnM
  • 24. Back-office 7: Low cost operations become “table stakes” “Macys 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”. "Its 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“ Macys Chief Executive Terry Lundgren24 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/HdJO2l / http://reut.rs/HCfLTc
  • 25. Back-office 8: Improve the use of all available data “If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that? ”25 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / http://bit.ly/zljGR5 / http://onforb.es/xahmzo
  • 26. What to do? The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items Shopping Shopping Shopping Becomes Becomes Becomes Omnipresent Deconstructed Collaborative Shopping Shopping Shopping Becomes Becomes Real- Becomes Contextual time Aware Experiential Sell & Serve: Excellent, harmonized and personalized value proposition X-channels Buy & Market: Shared processes & systems supporting use of data, flexibility, low-costs26
  • 27. Why this is important The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items Shopping becomes engrained in all aspects of our lives due to 1 Shopping Becomes Omnipresent persistent connectivity and ubiquitous access Consumer touch points continue to proliferate increasing availability 2 Shopping Becomes Deconstructed Consumers can start/stop and switch channels seamlessly New competitors arise; disintermediating consumers from retailers 3 Shopping Becomes Collaborative Retailers engage consumers in retail decisions (e.g. assortment, etc.) Consumer-to-community interactions become commonplace Consumers demand relevancy and personalized service 4 Shopping Becomes Contextual Availability of consumer information combined with real-time analytics enables superior experience 5 Shopping Becomes Real-time Aware Device and communication technology converge Consumer interactions become timely and proactive Physical and digital worlds converge to provide an enhance experience 6 Shopping Becomes Experiential Shopping becomes all about the experience; availability and fulfillment times are greatly reduced27 © 2011 IBM Corporation
  • 28. How IBM can help We help bringing it all together Good marketing is Service Service feedback drives better marketing Excess Inventory influences Marketing displays relevant ads marketing campaigns ecommerce provides marketing Campaign results impact with real-time shopping behavior inventory plans Buy Market Sell Service • Supplier Integration & • Customer Awareness & • Cross-channel Selling • Delivery, Service, & Support Management Analytics • Order Management & • Customer Self-Service • Supply Chain Management • Social Media Marketing Fulfillment • Case Management • Payments and Settlements • Cross-channel Campaign • Customer Integration & • Strategic Supply Management Collaboration Management* • Digital Marketing Optimization • Store Solutions • Pricing, Promotion and • Payments & Settlements Assortment Optimization* Consumer demand shapes Good service drives cross/up-sell decisions on the supply side, & repeat sales e.g. supplier sourcing, inventory Service options offered to Inventory & Logistics drive customers during the selling fulfillment options process28 * IBM announced intent to acquire Emptoris and DemandTec
  • 29. How IBM can help Smarter Commerce focuses on the customer Customer Value Strategy Customer Insight In turn, you must re-think In today’s world of instant how your customers define value, and the changes you business, you need deep must make to your value insights, in real-time that you chain so you can deliver can turn into immediate action exactly what your customers want - profitably Customer Customer & Partner Engagement You need an approach that allows you to more effectively connect, collaborate, conduct …increasing the value companies generate commerce and create a for their customers and partners in a differentiated customer rapidly changing digital world experience29
  • 30. Jerry.stam@nl.ibm.com +31651285639 Thank You! ibm_retail_nl30
  • 31. 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/HKCSgA31