IBM Transform or Die 2012


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IBM Transform or Die 2012

  1. 1. Transform or Die Survival in the Age of the Smarter Consumer IBM Global Business Services
  2. 2. IBM major businesses worldwide Global Technology Services Global Business Services Systems and Technology Software S&D and Research Provides outsourced IT infrastructure services and business process services Provides professional services and application outsourcing services Provides advanced computing, storage and semiconductor technology and products Provides middleware that enables clients to integrate systems, processes and applications, as well as computer operating systems Our Sales and Research, Development and Intellectual Property organizations provide a wide spectrum of client support and additional value Global Financing Provides financing solutions that can be customized to address specific IT needs, from competitive rates to flexible payment plans and loans 18% 38%* *= External revenue / Source: Annual report 2011 / 18% 2% 23 % 1%
  3. 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-purchase 3
  4. 4. Topics • Trends – Changes that impact retailers – Social, mobile, eCommerce throughout the shopping process 4 “Today’s consumers know so much more before they reach the shelf.They find incredible detail online, from every possible source, about the brands and products that matter to them.They browse, dig, explore, dream and master, and then they’re ready to buy with confidence. And what they learn, they share with others”. Source: ZMOT - Winning the zero moment of truth - Jim Lecinski
  5. 5. Consumers use (more) information and technology throughout the shopping process – of which a large part is out of your control Service & Support Service & Support PurchasePurchase AwareAware ShoppingMoment Take Possession Take Possession ResearchResearch Source: IBV Retail 2012 Winning Over the Empowered Consumer Study n= 28527 (global) C01 / / / Almost one quarter of shoppers use three or more technologies to shop & purchase 5 Changes that impact retailers By year’s end, worldwide media tablet sales will approach 120 M Apple to Sell 30 Million iPads in 2012 Of tablet-owning consumers 53% shop for electronics, 39% for toys, followed by clothing (37%) and travel (26%).
  6. 6. Google, Amazon, Apple and Facebook are threatening your business Source: Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012 - Sucharita Mulpuru - February 07, 20126 Changes that impact retailers 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.
  7. 7. 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 boughtTagTile, 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: / / Social
  8. 8. Example: Extended reach through Slideshare & Facebook 8 Social Slideshare: IBM WGOIR presentations Facebook: NL retailer example 53% of internet users in the Netherlands in 2011 reported they had been active on social networking sites Source:IBM Research -
  9. 9. Mobile phone: 2007- 2012 Source: / / Mobile 2007: Nokia phones 2012: Phones used most in NL to access websites 52% of Dutch consumers were using a smartphone in Q4 2011. Smartphone usage passed normal phone usage for the first time
  10. 10. NASA had less technology when they put Neil Armstrong on the moon than the regular smartphone has today Apollo Guidance Computer 2.048 MHz, 16 bit processor. 64 KB ROM / 8 KB RAM Iphone 4S dual-core 1 GHz Cortex-A9 A5 chipset and 512 MB of RAM 10 Mobile
  11. 11. eCommerce: 2007- 2012 In 2007, achieved a record turnover of EUR 171 million, an increase of 60%. In total, the company sold over 8 million products In 2011, grew its sales by 18 percent to EUR 376 million. One in two Dutch who shopped online, bought something from in 2011 In 2012, Royal Ahold NV (AH) acquired for EUR 350 million in an effort to boost Internet sales. Ahold wants to triple its online sales. 11 eCommerce started in 1999 Turnover 1999 NLG 4,5 - 5 million
  12. 12. Facts & Figures, if you still need more ... 12 eCommerce
  13. 13. Two-thirds of consumers are ready to buy after researching, with the vast majority still transacting in stores but is it your store? 39 47 47 56 61 67 68 76 80 81 83 18 19 19 17 17 17 20 10 9 8 9 34 13 16 14 8 8 8 6 6 4 4 9 21 18 13 8 8 4 8 5 7 4 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Shopping Portal Mobile Apps Online Streaming Social Media Search Engine Email Retailer Website Magazines Family/ Friends Mail/TV/Radio/Blbd Store Source: IBM Institute for Business Value Analysis, Retail 2012 = 28527 PM04 After getting information at (research method), where do you usually purchase the item you researched]? Other = 11% mobile, 10% other Other = 7% mobile, 11% other Other = 5% mobile, 8% other Purchase ChannelResearch Channel Retail Store Retail Website Portal/ Auction Other 13 Changes that impact retailers
  14. 14. For the 33% of consumers who did not have enough information to purchase, the lacking information is within the retailer’’’’s control 1. Wanted to touch, see and experience the item 2. Wanted to price compare to determine best price 3. Product information was missing 4. Missing independent product review information 5. Could not tell if the product was in stock Source: IBM Institute for Business Value Analysis, Retail 2012, n = 28,527, PM05 AdvocateAdvocatePurchasePurchaseAwareAware Shopping Moment Take Possession Take Possession ResearchResearch 14 Changes that impact retailers
  15. 15. Topics • What to do – Best practices to survive (and thrive) – Influence and assist along the customers´ digital path-to-purchase 15 Navigate Store/Site Select & Buy Choose Channel User Satisfaction Advocate Community Create Demand Choose Trusted Source Source: Kantar Retail analysis
  16. 16. How to make that work? Front-office 1.Make it easy to shop wherever, whenever 2.Personalize offers to individual customers 3.Deliver more value and fun in store 4.Offer unique products and services Back-office 5.Enhance the added value of store associates 6.Move to smaller stores and more focused assortments 7.Low cost operations become “table stakes” 8.Improve the use of all available data 16 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper Best practices to survive Front-officeBack-office
  17. 17. 1: Make it easy to shop (wherever, whenever) 17 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: / “We're sort of more of a service for men's life than just underwear.We find that guys are historically kind of lazy for shopping for these things so we make it really easy for them." Front-Office
  18. 18. 2: Personalize offers: More than just past purchases and profile 18 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / / / / Global Technology Outlook 2012 “Tesco is set to launch a wave of price promotions and range reviews based on the affluence of areas.” Front-Office
  19. 19. 3: Deliver more value and fun in store 19 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / / / “Maybe (the) most important is that the staff isn’t focused on selling stuff, it’s focused on building relationships and trying to make people’s lives better.That may sound hokey, but it’s true”. Ron Johnson former senior vice president for retail at Apple Front-Office
  20. 20. 4: Offer unique products & services (to prevent “showrooming”) 20 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / "Offering people personalized prices through their mobile device may be the most effective way to beat showrooming" Ability to handle digitally: Content Community Commerce × Social activity × Frequency Store = Showroom Ability to handle digitally: × Content Community Commerce × Social activity × Frequency Store = Experience Front-Office
  21. 21. 4: Add unique products & services 21 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Source: WSJ Updated April 11, 2012, 5:38 p.m. ET / “Retailers realize that the competition isn't between stores and websites, but between their websites and those of others” Front-Office
  22. 22. 5: Enhance the added value of store associates 22 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / / “With the social, digital, mobile and website updates, we’re giving our clients the most customizable experience in the beauty industry, and connecting clients with our experts in the ways that are most relevant to them” Sephora senior vice president Julie Borntein All 305 Sephora makeup stores are equipped with iPod touches that provide a mobile point-of-sale option for customers, helping to mitigate the lines that form in the store. And 20 Sephora stores, will have two to four iPads to help clients interact with a menu of services offered at their makeover studios. Back-office
  23. 23. "Hyperlocal will be our true point of differentiation. This is a major cultural shift for our company, but one that store teams have genuinely embraced." Craig Herkert, Supervalu president and CEO 6: Move to smaller stores and more focused assortments 23 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / Planet retail - Is there a future for hypermarkets? / Non-food offer limited to daily needs Proximity and convenience Back-office
  24. 24. 7: Low cost operations become “table stakes” 24 Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / / "It's clear to me that the consumer likes shopping online. I am focused on how do we make them feel as comfortable and ready to buy in our stores as they do online“ Macy's Chief Executive Terry Lundgren “Macy's plans to have 292 of its more than 800 stores double as distribution centers for online orders by the end of the year in a bid to get products to customers more quickly as the retailer competes with Inc”. Back-office
  25. 25. 8: Improve the use of all available data 25 “If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that? ” Source: IBM NYU Retail 2020 Reinventing Retail Whitepaper / / Back-office
  26. 26. The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items Shopping Becomes Collaborative Shopping Becomes Contextual Shopping Becomes Deconstructed Shopping Becomes Real- time Aware Shopping Becomes Experiential Shopping Becomes Omnipresent 26 What to do? Excellent, harmonized and personalized value proposition X-channels Shared processes & systems supporting use of data, flexibility, low-costs Sell & Serve: Buy & Market:
  27. 27. The Smarter Consumer is redefining shopping, changing the manner they interact, obtain information, and purchase items Shopping Becomes Collaborative Retailers engage consumers in retail decisions (e.g. assortment, etc.) Consumer-to-community interactions become commonplace3 Shopping Becomes Contextual Consumers demand relevancy and personalized service Availability of consumer information combined with real-time analytics enables superior experience 4 Shopping Becomes Deconstructed Consumers can start/stop and switch channels seamlessly New competitors arise; disintermediating consumers from retailers2 Shopping Becomes Real-time Aware Device and communication technology converge Consumer interactions become timely and proactive5 Shopping Becomes Experiential Physical and digital worlds converge to provide an enhance experience Shopping becomes all about the experience; availability and fulfillment times are greatly reduced 6 Shopping Becomes Omnipresent Shopping becomes engrained in all aspects of our lives due to persistent connectivity and ubiquitous access Consumer touch points continue to proliferate increasing availability 1 © 2011 IBM Corporation27 Why this is important
  28. 28. Buy Market Sell Service Good marketing is Service Service feedback drives better marketing Marketing displays relevant ads ecommerce provides marketing with real-time shopping behavior Excess Inventory influences marketing campaigns Campaign results impact inventory plans Consumer demand shapes decisions on the supply side, e.g. supplier sourcing, inventory Inventory & Logistics drive fulfillment options Good service drives cross/up-sell & repeat sales Service options offered to customers during the selling process • Supplier Integration & Management • Supply Chain Management • Payments and Settlements • Strategic Supply Management* • Customer Awareness & Analytics • Social Media Marketing • Cross-channel Campaign Management • Digital Marketing Optimization • Pricing, Promotion and Assortment Optimization* • Cross-channel Selling • Order Management & Fulfillment • Customer Integration & Collaboration • Store Solutions • Payments & Settlements • Delivery, Service, & Support • Customer Self-Service • Case Management * IBM announced intent to acquire Emptoris and DemandTec We help bringing it all together 28 How IBM can help
  29. 29. Customer Smarter Commerce focuses on the customer You need an approach that allows you to more effectively connect, collaborate, conduct commerce and create a differentiated customer experience In today’s world of instant business, you need deep insights, in real-time that you can turn into immediate action Customer Insight In turn, you must re-think how your customers define value, and the changes you must make to your value chain so you can deliver exactly what your customers want - profitably Customer Value Strategy Customer & Partner Engagement …increasing the value companies generate for their customers and partners in a rapidly changing digital world 29 How IBM can help
  30. 30. Thank You! +31651285639 30 ibm_retail_nl
  31. 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. 31