IBM hosted a breakfast theatre event at the Second City Theatre in Toronto to discuss innovative retail strategies and customer experience best practices. [1] A panel of retail experts discussed key topics like understanding customer loyalty, improving the customer experience through merchandise selection and multi-channel presence, and overcoming barriers like outdated technology and lack of understanding customer expectations. [2] The audience provided real-time feedback through interactive polling devices. [3] The event concluded with a showcase of IBM technology solutions to help retailers transform their customer experience and business operations.

1. IBM Theatre of Retail:
Creating a Unique Customer Experience
Courtesy of IBM
Canada Retail,
customers took
in a show at
The Second City
Theatre in Toronto.

2. IBM Theatre of Retail:
Creating a Unique Customer Experience
The lights dimmed. A hush topics – punctuating the chat fest with surveys in real-time using a
humorous asides. The audience of TurningPoint interactive device.
fell over the audience. From
retail movers and shakers also had And like any good theatrical
stage left, an affable host a role to play: they listened, laughed, production, there were some
bounded to centre stage asked questions, and reacted to surprises along the way.
as the bass line swelled.
Applause erupted.
A taping of Regis and Kelly? A
night at the Royal Alex? Not exactly.
Courtesy of IBM Canada Retail,
customers took in a show at The
Second City Theatre in Toronto. The
name on the marquee? IBM Theatre
of Retail: Creating a Unique Customer
Experience. Throughout the morning,
it was clear that IBM not only under-
stands the customer experience,
they are capable of creating one.
So what exactly does the Theatre of
Retail look like? Well, it’s like dinner
theatre – for breakfast. Lee Smart, like
chat-show hosts everywhere, perched
on a stool to guide four retail expert
panelists through a wide range of
The setting: The morning line-up:
SYNOPSIS:
I Customers heard respected indus-
Second City Theatre, Toronto
The participants:
I Chris Johnston,
Hosted by IBM Canada Retail try figures share their ideas on inno-
Marketing. vative business models and
VP of Apparel, Wal-Mart Canada
I Susan Confort,
best-in-class customer experience
The backdrop:
thought leadership
I Participants enjoyed demos of state
The retail industry is about the
Worldwide Director of Marketing,
experience it provides to its con-
IBM Retail
I Liz Evans,
of the art technology specifically fo-
sumers – fashion and colour, sounds
cused on the customer experience,
and scents, satisfied clientele. Theatre.
Director, Ted Rogers School of with kiosks, personal shopping de-
Today’s retailers are on the lookout for
Retailing, Ryerson University vices, store integration software and
I Hung LeHong,
ways to create a customer experience
business process re-engineering
that is distinct to their brand. That’s
Vice President of Research, The main event:
why the 2008 Retail showcase does
Gartner Retail Industry Team not just talk about the customer
I The audience: An enthusiastic mix
The breakfast theatre session was
experience, it creates one. divided into three broad topics:
of IT management, sales & market- customer loyalty, improving the cus-
ing, operations management and tomer experience, and the barriers
C-level executives to a compelling customer experience.

3. Scene #1: Customer Loyalty
Host Lee Smart started by posing this question to the audience:
Most of my customers are:
I antagonistic
I indifferent
I engaged
I fans
Within seconds, interactive TurningPoint devices across the
theatre were busily engaged. Minutes later, the results were
in and a chart appeared onscreen. And the survey showed:
According to the survey, 48 percent of customers are either
indifferent or antagonistic, a startling finding that got the
panel talking.
UNDERSTANDING dissatisfaction in their attitude, while “We need to tailor it to them and
ANTAGONISM Chris noted that the work and effort personalize it.
poured into converting antagonists How? According to Hung, customer
“We’re doing something wrong
will filter across the rest of the service is about the sales people on
when almost 20 percent of customers
consumer groups, even the fans. the floor. Your brand is represented
are not happy,” said Wal-Mart’s
by your people.
Chris Johnston.
CREATING FANS
For grocers, product availability,
The panel agreed that antagonists
Pointing out that the survey showed convenience and freshness drives
are the most dangerous consumers.
that 20 percent of customers are loyalty, according to an IBM survey
People share bad news much more
fans, the panel noted that brand six month ago. The economy also
quickly than good news. However,
is paramount. Look at the loyalty affects advocacy behaviour. In dire
the factors that create antagonism
Apple generates. On the other hand, times, loyalty can change very quickly.
or support might be outside of the
a store focused on replenishment Price can influence customers to
control of retailers. In today’s social
(convenience store) or a transaction switch to discount stores.
media environment, opinions spread
(Money Mart) has limited potential
in a viral fashion. Although loyalty fac- In an abrupt shift to the theatre of the
to inspire fan behaviour.
tors can be out of the retailer’s control, absurd, discussion was halted by an
Although more fans are derived
retailers need to understand how to unexpected visit from self-proclaimed
from brand than customer service,
influence the ‘buzz’ around their store. ‘retail guru’ Dr. Dash Walmsley, author
the key for winning fans is to create of Mad Dash: 20 Tips to Making a Run
So the question for retailers is:
expectations and then consistently for Success. To the strains of “ANY
How can we influence perceptions
meet and exceed them. WAY YOU WANT IT,” Dr. Walmsley
to create brand advocates? According
“Caring and empathy is part of our bounded to the stage. Calling
to Gartner’s Hung LeHong, it takes
challenge,” Chris said. “Take the time himself an ‘experi-expert’ (someone
more than just putting a corporate
to understand, so that the customer who specializes in the customer
profile on Facebook. The company’s
feels you relate to them, understand experience), Dash proclaimed, “I am
Web presence should also involve
their needs and their values – and no egghead. I cut my chops in the
providing access to helpful tools
then react accordingly.” stores and on the floors, observing,
and interactive features.
learning, eating, sleeping and dream-
“In order to meet customer expecta-
Ryerson’s Liz Evans pointed out that
ing the customer experience.” Laugh-
tions, you have to know what they
indifferent customers are dangerous
ter – but not much learning – ensued.
want,” IBM’s Susan Confort noted.
too, because there is an inherent

4. Scene #2: Improving the Customer Experience
Lee Smart asked the audience to answer the following question using their TurningPoint devices:
As a consumer, the most important driver of the
customer experience is:
I Well-trained/attentive staff
I Merchandise (breadth of selection/in stock)
I Store layout/appearance
I Loyalty program/tailored offers
I Multi-channel presence (shop the way you want)
Within minutes, a bar chart appeared on the onstage
screen. And the survey showed:
THE IMPORTANCE OF MULTI-CHANNEL Remember, a fair price and good loca-
MERCHANDISE tion precedes the customer experi-
PRESENCE AND LOYALTY
ence. But price is not the ultimate
PROGRAMS
According to a decisive majority of
driver of fan behaviour.
respondents, merchandise selection Liz was surprised by the low score
What is required is creating the
and availability is the most important for multi-channel presence. “Often,
perception of overall value. That’s
part of the customer experience. the Internet shopping component
where consumers become brand
This stirred some discussion precedes the in-store experience.
advocates. If you achieve that, you’re
amongst the panelists. Customers want to know if items are
satisfying customers across many
in stock before getting to the store.”
Chris wasn’t surprised by the results.
other planes: merchandise, product
“At the end of the day, if they don’t Susan agreed. “Tech-savvy young
quality, speed of service, breadth of
get merchandise right, nothing else people expect to be able to make
selection, and price.
matters. With the right insights, purchases anytime, anywhere. And
Due to ‘contractual obligations’
you’ll create the right products.” they won’t tolerate anything less.”
Lee Smart once again welcomed
Hung agreed merchandise is crucial. And the merits of loyalty programs?
Dr. Walmsley back to the stage.
“Gartner surveys show that in-stock The panelists agreed that successful
Bounding forward, Dash yelled,
and easy to find merchandise are loyalty programs are about cash dis-
“Bring on the retail noise!” then
the most important considerations counts to customers, convenience,
claimed that turning customers into
for customers, although that varies and quickly receiving benefits.
brand advocates was his ‘wheel-
by retail segment. The product is the
house.’ The trick? “Give them candy
DELIVERING OVERALL
bottom line. That label is in your closet,
of course! People love candy.
VALUE
and you’re either happy with that brand
You get more flies with honey than
or not, and it’s a reminder of the retail
“Again, it’s all about customer with vinegar. It’s like drugs, but
experience.”
expectations,” Hung noted. “At a cheap and legal.”
Susan noted that the store experience gourmet grocery store, customers
can be fun, but merchandise is still expect a certain experience. If you
vital. She said that IBM research shows don’t deliver, you’ll disappoint. In the
that there certainly are segments, like discount store, speed at the checkout
grocery, where merchandise is most and breadth of merchandise are key
important. Fair price is also an impor- components of the value.”
tant driver for those segments.

5. Scene #3: Barriers and Enablers of Customer Experience
The final question posed to the audience was:
As a retailer, the greatest barrier to creating a
compelling customer experience is:
I Employee turnover
I Outdated technology
I Not understanding customer expectations
I Other business priorities
I Lack of a customer-centric focus
Once again, the theatre audience entered their answers
into the TurningPoint devices. And the results showed:
CUSTOMER to those needs. Ideally, a local store As the panelists were applauded
EXPECTATIONS manager should have input on local for their contribution, Dash bounded
preferences. Then, if it works well back onstage to the pounding
Not understanding customer expecta-
locally, distribute that idea across rhythms of “The Final Countdown.”
tions eclipsed every other barrier ex-
all the stores.” He recommended that retailers
cept the need for a customer-centric
build mazes and puzzles in the
focus. How did that play with the pan-
THE ROLE OF store, suggesting that consumers
elists?
TECHNOLOGY will feel enabled when they
“First impression?” Chris asked. “If 46 overcome the barriers. “They will
Technology will continue to increase
percent of retailers don’t understand brag to their friends, and you will
in importance. According to Susan,
customer expectations, then there are get brand advocates!”
for younger consumers who have
real problems.”
never lived without the Internet or cell He concluded in noble fashion.
According to Liz, the breakdown phones, “technology is always there, “We are our own greatest barrier,
occurs because retailers are not and it always works.” Hung agreed and we are our greatest enablers.
always clear on who their target that young people look for simplicity Lead through innovation, hypnosis,
customers are. “Trying to be all things in use, as exemplified by the iPod. candies and mazes. You are the
to all people can lead to too much Therefore, technology needs to be retailers, you are the IT people,
competition with other retailers and focused on providing simplicity and and you have the power and
confusion about customer expecta- functionality while hiding complexity. knowledge. And with great power
tions. If you’re consumer-centric, you comes great responsibility.”
Chris pointed out that technology
have a very clearly targeted core
also supports retailers in executing
customer, so understanding their
their strategy.
expectations is a lot easier.”
“If you’re customer-centric, you
According to Hung, the local compo-
understand their expectations even
nent is a key factor in understanding
at the local level, such as knowing
and meeting customer expectations.
which sizes to carry,” Hung said.
Large, centralized retailers can lose
“You know your market and who
the local capability to meet sizing and
the core customer is.”
pricing needs. “Segment your cus-
And knowing the customer is what
tomer base, and then operationalize it
customer satisfaction is all about.
by treating stores differently according

6. Scene #4: TotalStore Showcase
At the end of the final segment, attendees were asked to submit questions for the panel to
address during the Q&A session.
Demos were staffed by the IBM
This was followed by an interactive
TotalStore field team and included:
TotalStore Showcase and networking
I 3D Digital Media/ Second Life
session. The showcase provided a
view of the state-of-the-art technology Plasma Display
I Kiosk / Expert Advisor
that enables retailers to differentiate
themselves as leaders in the customer
I Store Dashboards
experience – with kiosks, personal
I Multi-Channel Retail (WebSphere)
shopping devices, store integration
I Everywhere Interactive Display
software and business process
I Personal Shopping Assistant
reengineering.
Mobile POS
Scene #5: Question & Answer Session
Q: Why have so many well-known Q: What ways are there to get to know
brand-name retailers disappeared your customers when you don’t
or lost their focus? have the budget to do that?
A: They become diluted, which is A: Market basket analysis, for example
dangerous. In economic boom in a grocery store, lets you know
times, it is possible to have what your customers are buying
growth without clarity on strategy. so you can stock the shelves ac-
When times are good, how do cordingly. Also, have your staff talk
you know when to change or to the customers on the floor. Build
take a risk? Rather than reacting, a culture of caring and listening, EPILOGUE: CONCLUSION
it’s important to be anticipatory. and then respond to concerns.
IBM can help you implement
innovative strategies to differentiate
your brand, reduce costs and work
Q: If we work to achieve true Q: How can retailers move into the
more efficiently by collaborating
customer-centric focus, would next generation of analytics? How
with suppliers and partners.
we still need a traditional loyalty do we get this information into the
program? hands of the right decision makers? For more information, contact your
IBM representative or visit:
A: Loyalty rewards the customer for A: Customer information needs to be
the openness of their dialogue endemic to operations. Get it out of www.ibm.com/retail/ca
with you and keeps you focused marketing and into store operations
on what matters. Loyalty programs and merchandising.
can generate important data on
your customer.