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Marketing challenges facing the CMO today. What do retailers need in order to meet the expectations of shoppers today?
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© 2013 IBM Corporation
From Transactions to Relationships: Connecting with a Transitioning Shopper
Retail Industry Perspective
Mike HandesLead Marketing Solutions Consultant, A/[email protected]
© 2013 IBM Corporation
Smarter Marketing, IBM? IBM Global Retail Consumer Study
Today the store, tomorrow where?
Showrooming, the small trend you can’t ignore
Connecting with transitioning shopper
IBM Omni-Channel Marketing Optimisation
Conclusion
Agenda
2From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
Why?
Why is IBM investing in the CMO?
© 2013 IBM Corporation
The CMO’s universe is changing…
Customers know more
Customers demand more
Your business expects more
Marketing must re-imagine its role
4
© 2013 IBM Corporation
5
Two key imperatives for a new marketing profession, driven by analytics and insights
5
Creating a system of engagement that maximises
value creation at every touch
Understanding each customer or
business as unique
© 2013 IBM Corporation
What drives our strategy?
6
© 2013 IBM Corporation
Over three years, these outperformers have achieved:
• Nearly 2x gross profit growth
• 3.4x net income growth• 2.4x stock price growth
20%
80%
Adop
tion o
f cr
oss
-ch
ann
el op
tim
isati
on
tech
nolo
gie
s
Ownership of the Customer Experience
Source: IBM 2013 Global Survey of Marketers
© 2013 IBM Corporation 7
Market Research
© 2013 IBM Corporation
8
Marketers must integrate all aspects of marketing
Earned media
PR
Owned media
Paid media
ad
ad
© 2013 IBM Corporation
complete UNDERSTANDING of each customer
1
9
What makes this hard?
Earned media
PR
Owned media
Paid media
ad
ad
Most marketers lack:
platform to take coordinated ACTION
2
© 2013 IBM Corporation
Smarter Marketing, IBM?
IBM Global Retail Consumer Study Today the store, tomorrow where?
Showrooming, the small trend you can’t ignore
Connecting with transitioning shopper
IBM Omni-Channel Marketing Optimisation
Conclusion
Agenda
10From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
Product categoriesAges surveyedIncome brackets
Results were analyzed across income, generations and product categories
11
Upper n= 1569
Upper Middle n= 3931
Lower Middle n= 7140
Lower n= 8109
Generation (18-25) n= 3329
Generation (26-34) n= 5187
Generation (35-44) n= 5154
Generation (45-54) n= 4487
Generation (55-64) n= 3202
Generation (65+) n= 2107
Adult Apparel n= 3127
Kids Apparel n= 3062
Luxury Brands n= 1763
Personal Beauty n= 3120
Consumer Electronics n= 3090
Personal Health n= 3111
Shoes n= 3113
Home Decor n= 3080
From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
Today the store, tomorrow where?
12From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
A surprising one third of store shoppers are tempted to explore options other than the store for their next purchase
13From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
of store purchasers are not sure where they will buy next = “Store Undecided”35%
Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
Last Purchase Next Purchase
9% Online
35% Undecided
56% Store
2% Other
14% Bought online
84% Bought in a store
© 2013 IBM Corporation
Showrooming, the small trend you can’t ignore
14From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
*list of online-only retailers used for this analysis in the appendix
Bought online from the same or different multi-channel retailer
66%
Bought from a known* online- only
retailer34%
One-third of showroomers bought from an online-only retailer, the other two-thirds from a multi-channel retailer
15From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
6% Showroomed
2% Other
8% Bought online
84% Bought in a store
© 2013 IBM Corporation
Connecting with transitioning shoppers
Agenda
16From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
Shoppers want retailers to provide personalized promotions and recommend relevant items
17From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
Interest in retailer offers
Use my prior purchasing to offer me promotions
55% 43%Use my prior purchasing to recommend new products
Invite me to events
43%Involve me in new product ideas
36%
Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
© 2013 IBM Corporation
Shoppers are willing to do the initial work, but it’s up to retailers to maintain personalization over the long term
18
Average time willing to spend in setup = 20 minutes
But 60% of shoppers will not revisit those preferences more than once a month Daily Several
times a week
Once a week
Several times a month
Once a month
Less often
From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
Nearly shoppers are willing to put in time with a retailer to set-up preferences, with the expectation that offers and communications will be personalized
9out of 10
Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
© 2013 IBM Corporation
Smarter Marketing, IBM?
IBM Global Retail Consumer Study
Today the store, tomorrow where?
Showrooming, the small trend you can’t ignore
Connecting with transitioning shopper
IBM Omni-Channel Marketing Optimisation Conclusion
Agenda
19From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
How customers behave
ad
social
search
display ad
Web
mobile
ATM/kiosk
phone
branch
POS
customer
© 2013 IBM Corporation
What they expect: coordinated marketing, integrated experience
ad
social
search
display ad
Web
mobile
ATM/kiosk
phone
branch
POS
customer
marketer
© 2013 IBM Corporation
What they experience: marketing silos
ad
social
search
display ad
Web
mobile
ATM/kiosk
phone
branch
POS
customer
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
strategy dataprocess tech
© 2013 IBM Corporation
Today’s discussion is about coordinated, integrated marketing
IBM calls this OMNI-CHANNEL MARKETING
© 2013 IBM Corporation
24
Omin-channel Marketing Optimisation, defined
Engaging each customer and prospect in a dialogue that builds upon their past and current behavior
dialogues, not silos!
Omni-channel Marketing
© 2013 IBM Corporation
25
How can technology help?
Optimising omni-channel marketingis like having a good conversation.
Marketers need to:
LISTEN AND UNDERSTAND
DECIDE WHAT TO SAY NEXT
(only then) SPEAK
© 2013 IBM Corporation
26
How can technology help?
Optimizing cross-channel marketing is like having a good conversation.
Marketers need to:
LISTEN AND UNDERSTANDDECIDE WHAT TO SAY NEXT(only then) SPEAK
This is hard to do without help from technology!
…and repeat this over and over again across many channels and even more customer relationships.
© 2013 IBM Corporation
27
LISTEN AND UNDERSTANDDECIDE WHAT TO SAY NEXT(only then) SPEAK
Creating a omni-channel marketing technology framework
© 2013 IBM Corporation
28
LISTEN AND UNDERSTANDDECIDE WHAT TO SAY NEXT(only then) SPEAK
CollectDecide
Analyze
Deliver
Manage
Creating a omni-channel marketing technology framework
© 2013 IBM Corporation
29
Collect
Manage
DecideAnalyze Deliver
Creating a omni-channel marketing technology framework
© 2013 IBM Corporation
Framework for omni-channel marketing
30
• Budgets• Projects• Reporting
Collect
Manage
Analyze data to find actionable
insights
Collect data that augments each customer profile
Decide on the best offer, action or
communication for each customer
Deliver engaging messages and
capture reactions
Manage budgets and processes and measure results
DecideAnalyze Deliver
© 2013 IBM Corporation
Data flow within the framework
31
• Budgets• Projects• Reporting
Collect
DecideAnalyze Deliver
Manage
Analyze data to find actionable
insights
Collect data that augments each customer profile
Decide on the best offer, action or
communication for each customer
Deliver engaging messages and
capture reactions
Manage budgets and processes and measure results
© 2013 IBM Corporation
Specific capabilities required for omni-channel marketing
32
• Budgets• Projects• Reporting
Collect
DecideAnalyze Deliver
Manage
• Predictive analytics
• Visual data exploration
• Event detection• Response
attribution
• Outbound campaign management
• Real-time interaction management
• Contact optimization• Distributed marketing
• Email delivery and deliverability
• Outbound fulfillment• Inbound touch-point
integration• Lead routing &
monitoring
• Planning & budgeting• Performance reporting
• Workflow & project management• Marketing asset management
• Social & mobile profile• Access to existing data
• Interaction history• Digital behavior
© 2013 IBM Corporation
Choosing the best offer for customers and profits
33
Highly optimized offers for customers in loyalty program Offers in statements - double digit increase in sales (17%)
coupon response rates and profits In store events led to year over year increase in sales and
net profit (90% from 3 events) Test and learn - ROI achieved (21% year over
year )
Managing complex, massive loyalty program that includes 82% of the UK’s female population
Inefficient cross channel execution - website, email, kiosk, direct mail not used in a coordinated fashion
Inability to deliver relevant offers that are profitable for Boots and its product suppliers
Unica Campaign and Optimize for segmentation and drive highly targeted offers presented on loyalty statements and at in-store kiosks.
The UK's leading pharmacy-led health and beauty retailer with nearly 2,500 stores from local community pharmacies to large destination health and beauty stores.
Challenge
Results
Solution
Customer Profile
© 2013 IBM Corporation
Smarter Marketing, IBM?
IBM Global Retail Consumer Study
Today the store, tomorrow where?
Showrooming, the small trend you can’t ignore
Connecting with transitioning shopper
IBM Omni-Channel Marketing Optimisation
Conclusion
Agenda
34From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
© 2013 IBM Corporation
35
IBM is your trusted partner for marketing solutions
Leading solutions deliver results– Award-winning solutions for social, mobile, analytics,
campaign management, customer experience
Confidence to navigate the changes ahead – Experience gained from thousands of clients and
practitioners in every major industry
Ability to transform the customer experience– Capabilities and experience to transform to a customer-
centric model