Whats going on in retailing - IBM - Rob Garf - Plenary session final

Capitalizing on the smarter consumer

Rob Garf

IBM Global Business Services

[email protected]

Dutch contact:

Jerry Stam

IBM Global Business Services

[email protected] / +31(0)651285639

© 2011 IBM Corporation

Today’s smarter consumers are fundamentally changing industries, brands, interactions, and relationships


So what characterizes these smarter consumers?

Instrumented Interconnected Intelligent

662 million activeusers on Facebook

5 billion mobile phonesconnections globally

95 milliontweets are sent each day

45% of consumersask friends before purchasing

75% of peopledon’t believe that companies tell the truth in advertisements

3 out of 4 business leaderssay more predictive information would drive better decisions


IBM’s IBV studied this new consumer taking into account 13 initial countries with an addendum for Holland

Mature

Canada (2221)

Australia (2274)

France (2200)

UK (2200)Germany(2200)

Italy (2200)

USA (4121)

Emerging

Brazil (2200)

Colombia (2200)

Mexico (2200)China (2200)

Argentina (2200)

Chile (2200)


Influences

Expectations

The profile of today's Smarter Consumer

Technology

Attitudes


Technology: Dutch consumers using slightly less technology than European peers

Number of Instrumented Consumers

24%

56%

20%

80%

2 or more technologies

1 technology

No technology

38%

45%

17%

83%

EuropeNetherlands


Website usage continues to rise

75%68%

2009 2010

Mobile technologies have almost doubled globally and is already more widely

accepted in the growth markets

13% 25%

Technology: Instrumentation has increased year-to-year and mobility has increased 92% globally


Influences


Influences: European consumers are still most influenced by stores…consumer control is largest in the awareness phase

Awareness& Engagement

Research& Discovery

Greatest Influences

Top 5 Influences

Friends / Family

Search Engine

TV/Radio/Billboard

Retailer Store

Mobile Apps

Online Streaming

Retailer Website

Online Streaming

Retailer Website

Mobile Apps

Search Engine

Friends / Family

Retailer Store

TV/Radio/Billboard

Retailer-Controlled

Consumer-Controlled


Influences: Only 21% of Dutch consumers trust retailers and manufacturers to provide honest feedback on products

10

Family/Friends

33%

30%

Customer Reviews

Product experts

17%

Retail/Manufacturer

21%


Attitudes


Attitudes: Dutch consumer attitudes are neutral towards income, but they are not going back to pre-recession spending levels

• 54% of consumers are optimistic about the future of their income

– 24% believe their income will stay the same

– 30% believe their income will increase by 20% in the next 5 years

• Optimism was not limited to the higher income brackets

Kiosks are popular across all countries

Attitude Toward Income Attitude Toward Shopping

53%

39%

Spending only on needs

Searching out sale items

31%Waiting longer to

purchase

21%Buying more online

12%Purchasing items to reward yourself

12%Spending more on travel/entertainment


Expectations


Expectations: Allowing the Dutch customer to specify how to take possession of the product is important

Which of the following methods would you prefer to obtain the item?

46%

24%

16%

9%

Purchase at store and leave store with item

Purchase at store and deliver to home the same day

Purchase online/in store and delivery next day

Purchase online and deliver on the date you specify

4%

Purchase online and pick up in the store


Expectations: Retail must close the sale

15

Top Reasons Why Consumers Abandon Items: StoreTop Reasons Why Consumers Abandon Items: Store

1. Just did not want it

2. Thought the item might go on sale and decide to wait

3. Did not want to spend the money

Top Reasons Why Consumers Abandon Items: OnlineTop Reasons Why Consumers Abandon Items: Online

1. Just did not want it

2. Did not want to spend the money

3. Thought item might go on sale and decided to wait


Expectations: Only 51% of Dutch consumers provide primary email

1. Review weekly ads/store events

2. Apply discounts/coupons to loyalty program

3. Notice of an upcoming sale/promotion

4. Receive relevant email from a retailer they trust who has products they love

1. Review weekly ads/store events

2. Apply discounts/coupons to loyalty program

3. Notice of an upcoming sale/promotion

4. Receive relevant email from a retailer they trust who has products they love

Top 3 Reasons Consumers Open and Read Emails

Check out

Shopping Online

Loyalty Program

38%

56%

59%

Consumer Interaction

Provide PrimaryEmail


Expectations: The Future is about ME

Listen to meKnow me

Empower meServe me


Serve me

Expectations: A personalized interaction remains the top demand

Convenience: Top area for retailer innovation• Provide the right products and appropriate variety of

brands

• Allow customers to see inventory availability before

going to store

• Loyalty programs that can be used at other retailers

Service: Most important loyalty drivers• Make it feel like a pleasure to help me

• Have employees that are knowledgeable about

products/services

• Allow me to return products without hassle or questions

asked

• Easy way to order items not in stock

Convenience: Top area for retailer innovation• Provide the right products and appropriate variety of

brands

• Allow customers to see inventory availability before

going to store

• Loyalty programs that can be used at other retailers

Service: Most important loyalty drivers• Make it feel like a pleasure to help me

• Have employees that are knowledgeable about

products/services

• Allow me to return products without hassle or questions

asked

• Easy way to order items not in stock

“Serve me”


Social media accounts• 45% of consumers have media sharing sites

• 33% of consumers belong to a social network

Frequency of social media visits• 5% visit social media daily / weekly to post

comments

• 75% casually participate monthly by responding

to posts or writing reviews

• 37% are influenced by external reviews

More than half of consumers state social

media interactions influence their spend

Expectations: Consumers are actively engaging with social

media and are expecting their voices to be heard

Listen to me


Expectations: A personalized interaction remains the top demand

Know me

Personalize Promotions (#1 purchase influencer)

• Most-likely to increase spend

• Top consideration when determining where to shop

• The area retailers need to improve most

Personalize Shopping (Most important factors)

• Provide preferred receipt type

• Recognize me in the store or online

• Remember preferred payment method

Personalize Assortments (Most important loyalty drivers)

• High quality/low price private label products

• New and unique products

• Manufactured or grown in my country (tied)

• Environmental friendly/sustainable products (tied)


Expectations: Dutch retailers have a vested interested in enabling m-commerce – especially for promotions

“Empower me”I want to opt in! I don’t care!

Emerging MarketMature Market

49% Allow me to check prices from other physical and virtual locations

47% Proactively communicate promotions to me based on what I scan

34% Allow me to order out-of-stock items

30% Allow me to take a picture/text to get complimentary product information


Customer Insight

Customer Value

Strategy

Customer & Partner Engagement

Smarter retailers interact with customers in a personalized way

© 2011 IBM Corporation23

Dank u!

Robert Garf

[email protected]

Education

Whats going on in retailing - IBM - Rob Garf - Plenary session final