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IBM Presentation at What´s going on in retailing
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Smarter shopping better RetailInnovative solutions to respond better to
the smarter consumer
IBM Global Business ServicesIBM Global Business ServicesRob Vos & Jerry Stam
Instrumented + Interconnected + Intelligent = Smarter
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Smarter consumers are changing the retail industry
Instrumented:
They have instantaneous access to
information about retailers, products and
other consumers’ experiences through
technology
Interconnected:
They use multiple technologies to
interact with other consumers and with
retailers
Intelligent:
Using all options of cross channel retail
in every stage of the buying process
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Smarter consumers are using all options of cross channel retailing in every stage of the buying process
AwarenessAwareness PurchasePurchase ReceiveReceive Service &Service &SupportSupport
Browse & Browse & ResearchResearchAwarenessAwareness PurchasePurchase ReceiveReceive Service &Service &
SupportSupportBrowse & Browse & ResearchResearch
ChoiceChoiceGiving customers the ability to shop Giving customers the ability to shop
how they wanthow they want
4Source: IBM Global Retail Industry
ConsistencyConsistencyEnsuring fulfillment of brand promise and Ensuring fulfillment of brand promise and
customer expectationscustomer expectations
ContextContext Providing the right interaction at the right timeProviding the right interaction at the right time
ContinuityContinuity Enabling seamless “flows” across touchpointsEnabling seamless “flows” across touchpoints
CommunityCommunity Facilitating a social and emotional connectionFacilitating a social and emotional connection
Overall sales growth will likely be modest , with an ongoing redistribution between the different channels
eCommerce growth:
� NL online consumer spending in 2009 has grown by 17% in 2009 to EUR 6.4 Bn
Source: Thuiswinkel Markt Monitor 2009-2, Blauw Research
Supermarket growth:
€ 5.000
€ 6.000
€ 7.000
Online turnover NL in Bn
Supermarket growth:
� The NL supermarkets and drugstores are the only retail segments in 2010 to experience sales growth recovery. With the huge price and promotion pressure, combined with the cautious consumer, 2010 sales growth will likely not exceed 1 percent
Source: Distrifood 10 maart 2010
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€ 0
€ 1.000
€ 2.000
€ 3.000
€ 4.000
Smarter consumers require a (mind)shift of retailers
Attract and retain customers
Smarter Shopping Experience
Use your data pools
Smarter merchandising & supply chains
Improve efficiencies
Smarter Operations
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Connectivity
How to connect,
attract and retain
the smarter
consumer?
Intelligence
How can I use
business analytics
to drive my
operations and help
me serve my
customer needs
better
Tools
What new tools are
available for retailers
to support store
operations and
reduce (labor) costs
without impacting
customers
Smart retailers work on three areas simultaneously
Create (a) data driven
customer-centric
flexible merchandising
Using available data
� Improve responsiveness
� Retailer dashboards
Deliver a
superior
shopping
Attract and retain customers
� Cross-channel retailing
� Social Networking
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flexible merchandising
and supply chain
Drive operational excellence
Improve efficiencies
� Harmonize, standardize and automate processes
� Best-of-Breed add-ons for specific areas
shopping
experience
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
Customer feedback and reviews improve products and customer experiences
Blogging, group discussion, and social networking build
communityBENEFITS:
• Increased conversions and revenue
• Increased customer loyalty
• Increased customer satisfaction
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Social networking is a growing factor in Retail & CPG in order to get connected with consumers
CocaCoca--Cola: 5 million Cola: 5 million FacebookFacebook fansfans NL retailers on TwitterNL retailers on Twitter
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SachaSacha shoesshoesIntertoysIntertoys Coffee companyCoffee company
Starbucks on multiple platformsStarbucks on multiple platforms
PraxisPraxisHEMAHEMA HunkemollerHunkemoller
SelexyzSelexyzPottenPotten & & PannenPannen
Bol.comBol.com
Example of “modern” Twitter discussions
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Transactions from all customers
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Offers
Gillette razors
L’Oreal shampoo
House brand shampoo
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� % $
� % $
� % $% $
Statement insert
Special Offer – This Week Only10% off on any of thesecombinations: A + B…G + H….
Promotional DisplayBuy X get Z for only $1.49! Market basket insights
If A then BIf C then DIf E and F then GIf H, then H then I
Transactions from this customer
Cardholder since YYYYMMAverage transaction valueMonthly transaction value
Business Intelligence is a critical tool to unlock data
Statement insert
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House brand shampoo
House brand hair color
Colgate toothpaste
Nivea skin care
Men’s fragrance
Woman’s fragrance
House brand sun care
Optician
Feminine hygiene
Online photo service
Family planning
Pampers diapers
House brand diapers
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3� % $% $
� % $
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DescriptiveAgeGenderFamily situationZip code
Monthly transaction valueCategories purchasedBrands purchased
InteractionsWeb registrationWeb visitsCustomer service contactsChannel preference
AttitudesSatisfaction scoresShopper typeEco score
3 13
6 12
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Business environment changes trigger response
Rules-driven business processes
Store merchandising and promotions respond
Yves Rocher uses business rules to meet business needs with technology
Personalized loyalty and promotion
promotions respond
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
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Reducing costs & expenses remains critical
Cost of Goods Sold as % of Revenue
Selling, General & Operating
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Source: http://imway2fat.wordpress.com/2009/04/18/
Selling, General & Administrative as % of
Revenue
Operating Income Margin(Profitability)
Depreciation & Amortization as % of
Revenue
Retailers simplify their systems landscapes
Human
Resources
Call Centers
MERCHANDISING
SUPPLY CHAIN
Assortment
ProductAvailability
Price/ Promotions
Quality
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Information FlowProduct Flow
BACK OFFICE
FUNCTIONSIT
Indirect Procurement
Finance and Accounting
SHOPPING CHANNELSKEY
COMPETENCIES
CUSTOMEREXPERIENCE
Store
Experience
Customer
Service
MultichannelConvenience
Source: IBM, "Shopper advocacy: Building consumer trust in the new economy"
Collabaration, standardisation and seamless integration between all parties in the supply chain is key for efficient and effective data management
Marketing/Sales Interactions
Billing
Customer Service/ CareCustomer
Self Service
Optimizing the business with right-time information
Maximizing customer satisfaction & revenue opportunities
EnrichTools
Regulatory Compliance
New Product Introduction
Financial Planning
Back office Systems
Fraud Avoidance
Ensuring all systems have consistent & complete information in real time
Understanding the choices & planning with accurate information
Enrich
Security
SearchStewardship
Hierarchies
Tools
Operational
End to End Master Data ManagementAuthoring
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Add Best-of-Breed modules to your ERP backbone
Sustainability solutionsSustainability solutionsOptimization solutionsOptimization solutions
eCommerceeCommerceMultichannelMultichannel
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DynamicDynamicmerchandisingmerchandising
Smart workforce planning tools deliver hard (proven) benefits
A Billion dollar retailer could drive a positive impact of millions of Euro by: A Billion dollar retailer could drive a positive impact of millions of Euro by:
�� Automating labor scheduling and time and attendance processes could Automating labor scheduling and time and attendance processes could save EUR 6.5 million in lost employee productivitysave EUR 6.5 million in lost employee productivity
�� Improving Improving planogramplanogram compliance by 20 percent could generate EUR10 compliance by 20 percent could generate EUR10 million in additional salesmillion in additional sales
�� Ensuring consistent inEnsuring consistent in--store execution of marketing strategy could generate store execution of marketing strategy could generate EUR 50 million in incremental salesEUR 50 million in incremental salesEUR 50 million in incremental salesEUR 50 million in incremental sales
�� Reducing employee turnover through better labor scheduling could save up Reducing employee turnover through better labor scheduling could save up to EUR 3 millionto EUR 3 million
�� Improving efficiency of managers in the field − it could save up to EUR 1 Improving efficiency of managers in the field − it could save up to EUR 1 millionmillion
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... 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
Executive Dashboards &Analytics Workbench
Carbon Emissions Energy Use Asset maintenance
Inventory Smart Grid Interface Paperless Process
Green retailing is just (good) business
Aggregate, Analyze
Aggregate, Analyze
Govern, Report &Transform
Govern, Report &Transform
Reporting Governance Transform
Data management Visibility Actionable Data
Automated Process
Monitor/alert system Deliverable Platform
Inventory Smart Grid Interface Paperless Process
Automation programs Demand Management Improve Energy Usage
Monetization Alternative source Reduce Emissions
Locate High Producing Reduce Emissions Green Procurement
•Service Providers
•Transportation & Logistics
•Manufacturing operations
•Supply Chain
•Employee travel
•Suppliers•Facilities & Buildings
•Data center & IT systems
Data Sources
Data Sources
Analyze
& Manage
Actionable Data
Analyze
& Manage
Actionable Data
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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 materialsair 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.
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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 – 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
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IBM´s offering portfolio brings together IBM cross brand capabilities to deliver retail business solutions
Deliver smarter shopping experience
�Next Generation e-Commerce
�Single View of Customer
�Multi-Channel Order Management
�Kiosk Business Solutions
�Customer Workbench & Analytics
Create smarter merchandising & supply chains
� Integrated Merchandise Planning
� Product Information & Attribute Management
� Core Merchandising w/SAP/Aldata/Oracle
Build smarter operations
� IT Infrastructure
� Application Maintenance
� Indirect Procurement
� Store Managed Services
� CRM/Call Center
� Finance & Administration
Reta
il O
fferings
• 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
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SOA
Information Agenda
Service Management & Security
Application Management & Deployment
Access and Collaboration
New Enterprise Data Center
�Customer Workbench & Analytics
�Store / Multi Channel Workbench & Analytics
�Advertising, Marketing & Promotions
�Customer Call Center
�Store Checkout
� Integrated Supply Chain
� Business Process Management
� Merchandising Workbench & Analytics
� Supply Chain Workbench & Analytics
� Price - Revenue Optimization
� Global Sourcing & Product Development
� Finance & Administration
� Workforce Productivity
� Energy Performance Management
� IT Consolidation & Optimization
� IT Productivity
� Enterprise Asset Management
� Financial Performance Management
Reta
il O
fferings
Reta
il F
oundational
Offerings
STG, SWG & GTS
Products & Service Lines
IBM Retail Industry Framework
Store & Channels
Marketing & Customer Management
Merchandising & Product Management
Supply Chain
IT Systems & Operations
Business & Finance Operations
IBM contact details
Rob Vos
Partner Global Business Services Benelux Retail [email protected] / 020-5134254 (secretariaat)
Jerry Stam
Sr Managing consultant Retail [email protected]
Jeroen Grootnibbelink
Sr Managing consultant Retail eCommerce [email protected]
Website:
www.ibm.com/retail/nl
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