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Smarter shopping better Retail
Innovative solutions to respond better to
the smarter consumer

IBM Global Business Services
Rob Vos & Jerry Stam
Instrumented + Interconnected + Intelligent = Smarter




                +                 +


                                                    2
Smarter consumers are changing the retail industry



                     +                         +
     Instrumented:           Interconnected:           Intelligent:

         They have           They use multiple     Using all options of
 instantaneous access to       technologies to     cross channel retail
     information about       interact with other    in every stage of
  retailers, products and   consumers and with     the buying process
     other consumers’             retailers
   experiences through
         technology

                                                                          3
Smarter consumers are using all options of cross
   channel retailing in every stage of the buying process

                            Awareness   Browse &                                    Service &
                                        Research      Purchase       Receive
                                                                                     Support


                                            Giving customers the ability to shop
                   Choice                             how they want

                                         Ensuring fulfillment of brand promise and
                   Consistency                    customer expectations


                   Context               Providing the right interaction at the right time


                    Community            Facilitating a social and emotional connection


                   Continuity            Enabling seamless “flows” across touchpoints

                                                                                                4
Source: IBM Global Retail Industry
Overall sales growth will likely be modest , with an
ongoing redistribution between the different channels
eCommerce growth:                                                Online turnover NL in Bn
  NL online consumer spending in 2009 has                     € 7.000
  grown by 17% in 2009 to EUR 6.4 Bn
                                                              € 6.000
   Source: Thuiswinkel Markt Monitor 2009-2, Blauw Research
                                                              € 5.000

Supermarket growth:                                           € 4.000
  The NL supermarkets and drugstores are
                                                              € 3.000
  the only retail segments in 2010 to
  experience sales growth recovery.                           € 2.000
  With the huge price and promotion
  pressure, combined with the cautious                        € 1.000
  consumer, 2010 sales growth will likely not                     €0
  exceed 1 percent

   Source: Distrifood 10 maart 2010


                                                                                            5
Smarter consumers require a (mind)shift of retailers

 Attract and retain     Use your data              Improve
     customers              pools                efficiencies
        Smarter               Smarter
                          merchandising             Smarter
       Shopping
                          & supply chains          Operations
      Experience

                           How can I use       What new tools are
   How to connect,       business analytics   available for retailers
   attract and retain       to drive my         to support store
      the smarter       operations and help      operations and
       consumer?           me serve my        reduce (labor) costs
                          customer needs       without impacting
                               better              customers

      Connectivity          Intelligence               Tools


                                                                        6
Smart retailers work on three areas simultaneously

   Attract and retain customers                Using available data
    Cross-channel retailing                     Improve responsiveness
    Social Networking                           Retailer dashboards

         Deliver a                                  Create (a) data driven
         superior                                      customer-centric
         shopping                                   flexible merchandising
        experience                                     and supply chain



                     Drive operational excellence

                       Improve efficiencies
                 Harmonize, standardize and automate processes
                 Best-of-Breed add-ons for specific areas

                                                                             7
Attract and retain consumers: Moosejaw provides
  innovative community-based multi-channel shopping

                                          Interactive, social,
                                         community shopping
                                              experience




      Seamless shopping
  experience across the Web,
   stores and mobile devices
                                      Blogging, group discussion,
BENEFITS:                             and social networking build
                                              community
• Increased conversions and revenue
                                       Customer feedback and
• Increased customer loyalty          reviews improve products
                                      and customer experiences
• Increased customer satisfaction
                                                                 8
Social networking is a growing factor in Retail & CPG in order to
get connected with consumers

   Coca-
   Coca-Cola: 5 million Facebook fans   NL retailers on Twitter




                                          Intertoys   Sacha shoes   Coffee company


     Starbucks on multiple platforms

                                           HEMA         Praxis       Hunkemoller




                                          Potten &      Selexyz        Bol.com
                                          Pannen




                                                                                     9
Example of “modern” Twitter discussions




                                          10
Business Intelligence is a critical tool to unlock data
          Promotional Display
          Buy X get Z for only $1.49!             Market basket insights                     Transactions
                                                  If A then B                                from all
                                                  If C then D                                customers
                                                  If E and F then G
                                                  If H, then H then I
                Special Offer – This Week Only
                10% off on any of these
                combinations: A + B…G + H….


                                                        Offers
                                                                                      Transactions from this
                                                 % $     1   Gillette razors          customer
                       Statement                                                      Cardholder since YYYYMM
                       insert                    % $     2   L’Oreal shampoo          Average transaction value
                                                                                      Monthly transaction value
                         3     13                % $     3   House brand shampoo
                                                                                      Categories purchased
                                                 % $     4   House brand hair color   Brands purchased
                         6     12
                                                 % $     5   Colgate toothpaste       Descriptive
                                                                                      Age
                                                 % $     6   Nivea skin care          Gender
                                                 % $     7   Men’s fragrance          Family situation
                                                                                      Zip code
                       Statement                 % $     8   Woman’s fragrance
                       insert                    % $     9   House brand sun care     Interactions
                                                                                      Web registration
                        ?
                        12     ?
                               15                % $     10 Optician                  Web visits
                                                                                      Customer service contacts
                                                 % $     11 Feminine hygiene
                        ?
                        11     ?
                               3                                                      Channel preference
                                                 % $     12 Online photo service
      @
                                                 % $     13 Family planning           Attitudes
                                                                                      Satisfaction scores
                                                 % $     14 Pampers diapers           Shopper type
                                                                                      Eco score
                                                 % $     15 House brand diapers

                                                                                                            11
Yves Rocher uses business rules to meet business
    needs with technology

                                                                       Rules-driven business
                                                                            processes
  Business environment
changes trigger response

                                          Store merchandising and
                                            promotions respond


                                                                       Personalized loyalty and
                                                                             promotion




BENEFITS:
Business users use rules to optimize store shelves
Greater customer loyalty and traffic   higher revenue
More creative and personalized promotions on rewritable loyalty card
                                                                                                  12
Reducing costs & expenses remains critical




                                                                         Cost of Goods Sold as
                                                                            % of Revenue

                                                         Operating        Selling, General &
                                                      Income Margin
                                                                         Administrative as % of
                                                       (Profitability)
                                                                               Revenue

                                                                           Depreciation &
                                                                         Amortization as % of
                                                                              Revenue




 Source: http://imway2fat.wordpress.com/2009/04/18/




                                                                                                  13
Retailers simplify their systems landscapes
                                                                                                              SUPPLY CHAIN


                                                           Product
                                                          Availability
                                                                            Price/
                                    Assortment                              Promotions
                   Human
                 Resources                           MERCHANDISING
        Call
     Centers
                                                                                            Quality
                       BACK
                      OFFICE                             KEY                                                SHOPPING CHANNELS
      IT
                     FUNCTIONS                       COMPETENCIES

                                                                                            Customer
     Indirect                                                                               Service
Procurement
                                                        CUSTOMER
                Finance and                             EXPERIENCE
                 Accounting
                                  Convenience                               Multichannel

                                                           Store
                                                         Experience

      Information Flow        Source: IBM, "Shopper advocacy: Building consumer trust in the new economy"
      Product Flow



                                                                                                                                14
Collabaration, standardisation and seamless integration
between all parties in the supply chain is key for efficient and
effective data management
                                                                                                                 Maximizing customer
                                                                                                                 satisfaction & revenue
                                                                                  Customer
                            Customer                                            Service/ Care                    opportunities
                           Self Service
 Optimizing the
 business with right-
 time information                                                                                                           Billing




        Marketing/Sales
         Interactions
                                                              Tools    Enrich

                                                               End to End
                                                              Master Data
                                          Security                                 Hierarchies
                          Authoring                           Management                           Operational

                                                                                                                   Financial Planning

                                                     Search
                                                                       Stewardship
                                                                                                                         Ensuring all systems
         Back office
                                                                                                                         have consistent &
          Systems                                                                                                        complete information
                                                                                                 Fraud Avoidance         in real time

Understanding the
choices & planning                                                          New Product
with accurate                                                               Introduction
                                          Regulatory
information                               Compliance

                                                                                                                                           15
Add Best-of-Breed modules to your ERP backbone

   Optimization solutions    Sustainability solutions




        Dynamic                   eCommerce
      merchandising               Multichannel




                                                        16
Smart workforce planning tools deliver hard (proven) benefits


A Billion dollar retailer could drive a positive impact of millions of Euro by:
   Automating labor scheduling and time and attendance processes could
   save EUR 6.5 million in lost employee productivity
   Improving planogram compliance by 20 percent could generate EUR10
   million in additional sales
   Ensuring consistent in-store execution of marketing strategy could generate
                           in-
   EUR 50 million in incremental sales
   Reducing employee turnover through better labor scheduling could save up
   to EUR 3 million
   Improving efficiency of managers in the field − it could save up to EUR 1
   million


                                     ... I always shop between 5 and 6 on Fridays
                                      … Why don´t they have the checkout open
                                   … Why isn´t there someone to answer my question


                                                                                     17
Green retailing is just (good) business
                                  Reporting           Governance                   Transform
 Govern, Report &               Data management           Visibility              Actionable Data
    Transform
                                   Automated
                                                    Monitor/alert system        Deliverable Platform
                                    Process

                                               Executive Dashboards &
                                                Analytics Workbench
   Aggregate,        Carbon Emissions                  Energy Use                 Asset maintenance
      Analyze               Inventory               Smart Grid Interface             Paperless Process
   & Manage           Automation programs          Demand Management               Improve Energy Usage
 Actionable Data           Monetization              Alternative source              Reduce Emissions

                     Locate High Producing           Reduce Emissions               Green Procurement




      Data          •Service         •Supply      •Employee                        •Facilities &    •Data center
                                                                   •Suppliers
     Sources        Providers         Chain         travel                          Buildings       & IT systems

                                               •Transportation    •Manufacturing
                                                 & Logistics        operations

                                                                                                                   18
Tesco & Sainsbury´s store examples


Tesco has opened its first eco-store in Tramore,
Ireland. The store was built with environmentally
friendly construction materials, and technological
features to create self-sufficiency for heating and hot
water, including solar panels to generate electricity,
air retrieval, and recycling materials




                                   At the newly opened 'greenest supermarket' of
                                   Sainsbury's in Gloucester, the energy for the
                                   POS is generated by customers as they drive
                                   on kinetic plates on the road at the entrance of
                                   the parking garage.

                                                                                      19
Conclusions

  Use the smarter consumer to develop a busines and ICT
  roadmap to the future
  Define the branding and the core competence of your
  own organisation
  – How to use you core competence to attract and retain the
    smarter consumer
  – How to use the consumer data to built a consumer driven
    organisation
  – How to standardise and make effective use of tooling in order to
    be as efficient as possible




                                                                       20
Thank you!



Rob Vos
rob.vos@nl.ibm.com
06-51227082

Jerry Stam
jerry.stam@nl.ibm.com
06-51285639




                        21
IBM´s offering portfolio brings together IBM cross
                      brand capabilities to deliver retail business solutions
                       •      Smarter Planet for Retail – Sets the vision and direction for future capabilities
                       •      Business Analytics & Optimization – Infuse intelligence and optimizing our retail capabilities
                       •      Next Generation Data Center – New ways to deliver retail capabilities
                       •      Growth Markets – Deliver retail solutions tailored to market demand and capabilities

                             Deliver smarter shopping                Create smarter merchandising &             Build smarter operations
                                    experience                                supply chains                     IT Infrastructure

                           Next Generation e-Commerce                 Integrated Merchandise Planning           Application Maintenance
   Retail Offerings




                           Single View of Customer                    Product Information & Attribute           Indirect Procurement
                                                                      Management                                Store Managed Services
                           Multi-Channel Order Management
                                                                      Core Merchandising                        CRM/Call Center
                           Kiosk Business Solutions
                                                                      w/SAP/Aldata/Oracle
                           Customer Workbench & Analytics                                                       Finance & Administration
                                                                      Integrated Supply Chain
                           Store / Multi Channel Workbench &                                                    Workforce Productivity
                                                                      Business Process Management
                           Analytics                                                                            Energy Performance Management
                                                                      Merchandising Workbench & Analytics
                           Advertising, Marketing & Promotions                                                  IT Consolidation & Optimization
                                                                      Supply Chain Workbench & Analytics
                           Customer Call Center                                                                 IT Productivity
                                                                      Price - Revenue Optimization
                           Store Checkout                                                                       Enterprise Asset Management
                                                                      Global Sourcing & Product Development
                                                                                                                Financial Performance Management
Retail Foundational




                                                                              SOA
                             STG, SWG &                          IBM Retail Industry Framework
                                 GTS                                         Information Agenda
     Offerings




                                                                      Merchandising & Product
                              Products& Channels
                                 Store &                              Service Management
                                                                              Management & Security           IT Systems & Operations
                             Service Lines                         Application Management & Deployment
                                Marketing & Customer                                                            Business & Finance
                                                                               Supply Chain
                                    Management                           Access and Collaboration                   Operations
                                                                        New Enterprise Data Center
                                                                                                                                                   22
IBM contact details
                      Rob Vos
                      Partner Global Business Services Benelux Retail
                      rob.vos@nl.ibm.com
                      06-51227082 / 020-5134254 (secretariaat)

                      Jerry Stam
                      Sr Managing consultant Retail solutions
                      jerry.stam@nl.ibm.com
                      06-51285639

                      Jeroen Grootnibbelink
                      Sr Managing consultant Retail eCommerce
                      jeroen.grootnibbelink@nl.ibm.com
                      06-20855607

                      Website:
                      www.ibm.com/retail/nl

                                                                        23

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Innovative solutions to respond better to the smarter consumer

  • 1. Smarter shopping better Retail Innovative solutions to respond better to the smarter consumer IBM Global Business Services Rob Vos & Jerry Stam
  • 2. Instrumented + Interconnected + Intelligent = Smarter + + 2
  • 3. Smarter consumers are changing the retail industry + + Instrumented: Interconnected: Intelligent: They have They use multiple Using all options of instantaneous access to technologies to cross channel retail information about interact with other in every stage of retailers, products and consumers and with the buying process other consumers’ retailers experiences through technology 3
  • 4. Smarter consumers are using all options of cross channel retailing in every stage of the buying process Awareness Browse & Service & Research Purchase Receive Support Giving customers the ability to shop Choice how they want Ensuring fulfillment of brand promise and Consistency customer expectations Context Providing the right interaction at the right time Community Facilitating a social and emotional connection Continuity Enabling seamless “flows” across touchpoints 4 Source: IBM Global Retail Industry
  • 5. Overall sales growth will likely be modest , with an ongoing redistribution between the different channels eCommerce growth: Online turnover NL in Bn NL online consumer spending in 2009 has € 7.000 grown by 17% in 2009 to EUR 6.4 Bn € 6.000 Source: Thuiswinkel Markt Monitor 2009-2, Blauw Research € 5.000 Supermarket growth: € 4.000 The NL supermarkets and drugstores are € 3.000 the only retail segments in 2010 to experience sales growth recovery. € 2.000 With the huge price and promotion pressure, combined with the cautious € 1.000 consumer, 2010 sales growth will likely not €0 exceed 1 percent Source: Distrifood 10 maart 2010 5
  • 6. Smarter consumers require a (mind)shift of retailers Attract and retain Use your data Improve customers pools efficiencies Smarter Smarter merchandising Smarter Shopping & supply chains Operations Experience How can I use What new tools are How to connect, business analytics available for retailers attract and retain to drive my to support store the smarter operations and help operations and consumer? me serve my reduce (labor) costs customer needs without impacting better customers Connectivity Intelligence Tools 6
  • 7. Smart retailers work on three areas simultaneously Attract and retain customers Using available data Cross-channel retailing Improve responsiveness Social Networking Retailer dashboards Deliver a Create (a) data driven superior customer-centric shopping flexible merchandising experience and supply chain Drive operational excellence Improve efficiencies Harmonize, standardize and automate processes Best-of-Breed add-ons for specific areas 7
  • 8. Attract and retain consumers: Moosejaw provides innovative community-based multi-channel shopping Interactive, social, community shopping experience Seamless shopping experience across the Web, stores and mobile devices Blogging, group discussion, BENEFITS: and social networking build community • Increased conversions and revenue Customer feedback and • Increased customer loyalty reviews improve products and customer experiences • Increased customer satisfaction 8
  • 9. Social networking is a growing factor in Retail & CPG in order to get connected with consumers Coca- Coca-Cola: 5 million Facebook fans NL retailers on Twitter Intertoys Sacha shoes Coffee company Starbucks on multiple platforms HEMA Praxis Hunkemoller Potten & Selexyz Bol.com Pannen 9
  • 10. Example of “modern” Twitter discussions 10
  • 11. Business Intelligence is a critical tool to unlock data Promotional Display Buy X get Z for only $1.49! Market basket insights Transactions If A then B from all If C then D customers If E and F then G If H, then H then I Special Offer – This Week Only 10% off on any of these combinations: A + B…G + H…. Offers Transactions from this % $ 1 Gillette razors customer Statement Cardholder since YYYYMM insert % $ 2 L’Oreal shampoo Average transaction value Monthly transaction value 3 13 % $ 3 House brand shampoo Categories purchased % $ 4 House brand hair color Brands purchased 6 12 % $ 5 Colgate toothpaste Descriptive Age % $ 6 Nivea skin care Gender % $ 7 Men’s fragrance Family situation Zip code Statement % $ 8 Woman’s fragrance insert % $ 9 House brand sun care Interactions Web registration ? 12 ? 15 % $ 10 Optician Web visits Customer service contacts % $ 11 Feminine hygiene ? 11 ? 3 Channel preference % $ 12 Online photo service @ % $ 13 Family planning Attitudes Satisfaction scores % $ 14 Pampers diapers Shopper type Eco score % $ 15 House brand diapers 11
  • 12. Yves Rocher uses business rules to meet business needs with technology Rules-driven business processes Business environment changes trigger response Store merchandising and promotions respond Personalized loyalty and promotion BENEFITS: Business users use rules to optimize store shelves Greater customer loyalty and traffic higher revenue More creative and personalized promotions on rewritable loyalty card 12
  • 13. Reducing costs & expenses remains critical Cost of Goods Sold as % of Revenue Operating Selling, General & Income Margin Administrative as % of (Profitability) Revenue Depreciation & Amortization as % of Revenue Source: http://imway2fat.wordpress.com/2009/04/18/ 13
  • 14. Retailers simplify their systems landscapes SUPPLY CHAIN Product Availability Price/ Assortment Promotions Human Resources MERCHANDISING Call Centers Quality BACK OFFICE KEY SHOPPING CHANNELS IT FUNCTIONS COMPETENCIES Customer Indirect Service Procurement CUSTOMER Finance and EXPERIENCE Accounting Convenience Multichannel Store Experience Information Flow Source: IBM, "Shopper advocacy: Building consumer trust in the new economy" Product Flow 14
  • 15. Collabaration, standardisation and seamless integration between all parties in the supply chain is key for efficient and effective data management Maximizing customer satisfaction & revenue Customer Customer Service/ Care opportunities Self Service Optimizing the business with right- time information Billing Marketing/Sales Interactions Tools Enrich End to End Master Data Security Hierarchies Authoring Management Operational Financial Planning Search Stewardship Ensuring all systems Back office have consistent & Systems complete information Fraud Avoidance in real time Understanding the choices & planning New Product with accurate Introduction Regulatory information Compliance 15
  • 16. Add Best-of-Breed modules to your ERP backbone Optimization solutions Sustainability solutions Dynamic eCommerce merchandising Multichannel 16
  • 17. Smart workforce planning tools deliver hard (proven) benefits A Billion dollar retailer could drive a positive impact of millions of Euro by: Automating labor scheduling and time and attendance processes could save EUR 6.5 million in lost employee productivity Improving planogram compliance by 20 percent could generate EUR10 million in additional sales Ensuring consistent in-store execution of marketing strategy could generate in- EUR 50 million in incremental sales Reducing employee turnover through better labor scheduling could save up to EUR 3 million Improving efficiency of managers in the field − it could save up to EUR 1 million ... I always shop between 5 and 6 on Fridays … Why don´t they have the checkout open … Why isn´t there someone to answer my question 17
  • 18. Green retailing is just (good) business Reporting Governance Transform Govern, Report & Data management Visibility Actionable Data Transform Automated Monitor/alert system Deliverable Platform Process Executive Dashboards & Analytics Workbench Aggregate, Carbon Emissions Energy Use Asset maintenance Analyze Inventory Smart Grid Interface Paperless Process & Manage Automation programs Demand Management Improve Energy Usage Actionable Data Monetization Alternative source Reduce Emissions Locate High Producing Reduce Emissions Green Procurement Data •Service •Supply •Employee •Facilities & •Data center •Suppliers Sources Providers Chain travel Buildings & IT systems •Transportation •Manufacturing & Logistics operations 18
  • 19. Tesco & Sainsbury´s store examples Tesco has opened its first eco-store in Tramore, Ireland. The store was built with environmentally friendly construction materials, and technological features to create self-sufficiency for heating and hot water, including solar panels to generate electricity, air retrieval, and recycling materials At the newly opened 'greenest supermarket' of Sainsbury's in Gloucester, the energy for the POS is generated by customers as they drive on kinetic plates on the road at the entrance of the parking garage. 19
  • 20. Conclusions Use the smarter consumer to develop a busines and ICT roadmap to the future Define the branding and the core competence of your own organisation – How to use you core competence to attract and retain the smarter consumer – How to use the consumer data to built a consumer driven organisation – How to standardise and make effective use of tooling in order to be as efficient as possible 20
  • 21. Thank you! Rob Vos rob.vos@nl.ibm.com 06-51227082 Jerry Stam jerry.stam@nl.ibm.com 06-51285639 21
  • 22. IBM´s offering portfolio brings together IBM cross brand capabilities to deliver retail business solutions • Smarter Planet for Retail – Sets the vision and direction for future capabilities • Business Analytics & Optimization – Infuse intelligence and optimizing our retail capabilities • Next Generation Data Center – New ways to deliver retail capabilities • Growth Markets – Deliver retail solutions tailored to market demand and capabilities Deliver smarter shopping Create smarter merchandising & Build smarter operations experience supply chains IT Infrastructure Next Generation e-Commerce Integrated Merchandise Planning Application Maintenance Retail Offerings Single View of Customer Product Information & Attribute Indirect Procurement Management Store Managed Services Multi-Channel Order Management Core Merchandising CRM/Call Center Kiosk Business Solutions w/SAP/Aldata/Oracle Customer Workbench & Analytics Finance & Administration Integrated Supply Chain Store / Multi Channel Workbench & Workforce Productivity Business Process Management Analytics Energy Performance Management Merchandising Workbench & Analytics Advertising, Marketing & Promotions IT Consolidation & Optimization Supply Chain Workbench & Analytics Customer Call Center IT Productivity Price - Revenue Optimization Store Checkout Enterprise Asset Management Global Sourcing & Product Development Financial Performance Management Retail Foundational SOA STG, SWG & IBM Retail Industry Framework GTS Information Agenda Offerings Merchandising & Product Products& Channels Store & Service Management Management & Security IT Systems & Operations Service Lines Application Management & Deployment Marketing & Customer Business & Finance Supply Chain Management Access and Collaboration Operations New Enterprise Data Center 22
  • 23. IBM contact details Rob Vos Partner Global Business Services Benelux Retail rob.vos@nl.ibm.com 06-51227082 / 020-5134254 (secretariaat) Jerry Stam Sr Managing consultant Retail solutions jerry.stam@nl.ibm.com 06-51285639 Jeroen Grootnibbelink Sr Managing consultant Retail eCommerce jeroen.grootnibbelink@nl.ibm.com 06-20855607 Website: www.ibm.com/retail/nl 23