Innovating the customer experience with smarter commerce versandhandelskongress 2009

© Copyright IBM Corporation 2009

Innovating the Customer Experience

Henrik von ScheelVice President,IBM Software Group

Delivering Smarter Commerce

2 © 2009 IBM Corporation

Today’s demanding customers

More knowledgeableabout products, costs, and price

More savvy about technology and products/services

Less loyal to any given retail entity

Self-sufficient and demands information to make smart decisions

Active participants openly sharing and seeking consumer driven content

Proud of being an individual and expects personalization and high customer service in every interaction

Driven by three new currencies: time, value, and information

Source: IBM Institute for Business Value “Retailing in a World of Extremes”

Today's change — and even more so, tomorrow's changes — will come from newly empowered consumers, who, by harnessing the tools that Web 2.0 technology affords them, can wield power and influence over retailers in a way never witnessed before – Gartner 2008



Technology is rapidly changing

New Touch points

New Store Formats

New Interaction Models

Innovation




Errol Denger: [email protected]

Data

POS

Kiosk

Web

B2B sitesTele, mobile

Customer procurement / systems

Fulfillment

Suppliers

Retailers

Distributors

Resellers / DealersLegacy systems

Back-end

B2B / Partners



The European Market European online revenue and demand has bucked the economic

downturn. ↑ Growing broadband penetration↑ Increasing consumer experience and comfort↑ Increased confidence in online security↑ Slight increase in European Online citizens↑ Use of comparison sites is likely to increase as people seek low prices

↓ Macroeconomic confidence↓ Consumer confidence↓ Overall discretionary spending

Sources: eMarketer, WSJ, Forrester



Internet is mainstream in most European countries

92%

86%

73%

72%

63%

52%

45%

64%

Netherlands

Sweden

UK

Germany

France

Spain

Italy

EU-7

“How often do you go online?” (at least monthly)

Source: Forrester’s European Technographics® Benchmark Survey, Q2 2008

Base: 22,673 European Adults

Three quarters of online European connect to the Internet everyday and spend on average over 10 hours a week browsing the Web



The UK and Sweden are leading in adoption of online shopping.

U

PLVS RLT

25m

28m

16m

5.6m4.8m

4.7m

8m

74%

73%

67%

65%

56%

29%

22%

56%

UK

Sweden

Netherlands

Germany

France

Spain

Italy

EU-7

Q2 2008

Germany and the UK account for almost 60% of Europe’s online shoppers

Base: 14,514 online European adults

“Have you bought any products or services online in the past three months?”

Source: European Technographics® Benchmark Survey, Q2 2008

8

Superior Shopping Experience



Traditional Marketing View

Awareness

Interest

Consideration

Purchase

Traditional Demand GenCommercials, Ads, etc

Seek more info and determine personal needs

Purchase: Store, Catalog, Call

Browse/Research: Catalog, Web, Store, Discussions



New touch points and interaction models now define and fragment the customer journey



Changing the way we market, build relationships, and deliver brand value

Data

POS

Kiosk

Web

B2B sites Tele, mobileCustomer procurement /

systems

Fulfi llment

Suppliers

Retailers

Distributors


Back-end

B2B / Partners



Best Practices for Next Generation Marketing

What is your brand’s personality?

Are your segments and personas actionable?

Are you marketing across channels? –Marketing is cross channel: Web, Mobile, in-store, contact center

Are you responding to the right interactions?

Test test test

Precision Marketing:• Experiences• + Conversations• + Relationships• = Affinity• …across all touch points

Successful brand experiences don’t happen by accident… they are carefully designed and executed

Marketing budgets are shifting to interactive channels causing spend for interactive marketing categories to grow at 27% CAGR.



Key Business and IT Strategies for Next 18 Months

Source: RIS News, 2009



80%of CEO’s believe

their brand provides a superior customer

experience

8%of their customers

agree

44%of consumers

say the majority of their customer

experiences are “bland”

Source: Bain & Company



It’s an extension of the brand’s personality



It’s highly personalized



It’s Social



It’s informative and personal



It’s Innovative

Building In-store Display Over the Web

22

Rich B2B ExperiencesIt drives action



Best Practices for delivering a Superior Shopping Experiences

Embrace Web 2.0

Integrate Social Commerce

Extend the brand experience

Built on precision marketing providing targeted information and recommendations at key decision points throughout the purchase process (and across channels)

24

Cross Channel Shopping



Why cross channel retailing is more important than ever

The majority of online consumers are cross-channel shoppers

– 53 % used the Internet to compare product features and prices

– 25 % did so from a mobile device while in a store

– 1 in 10 sent text messages to friends and family during shopping trips

Connectivity will be a part of life

– Consumers will expect to connect to anyone, at any time, about anything, from anywhere

Superior operational model, especially in challenging economic times

Sources: IBM “2007 Was the Year of the ‘Omni Consumer’”; 2008 IBM Retail Multi-channel Study; Chart 1: n=978 UK respondents

Percentage of respondents who switched retailers by during cross

channel shopping experiences

24%

37%

52%

62%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Groceries App/Acc/Footwear HomeImp/DIY/Appliances

ConsumerElectronics

% o

f Res

pons

es



Worldwide mobile internet users are expected to grow by 191% from 2006 to 2011 to reach a “Billion”

The millennial generation of “digital natives” are expected to drive up the demand for internet applications and e-commerce

Mobile Internet Users

337.3405.5

489.6

596.4

757.1

982.4

0

200

400

600

800

1000

1200

2006 2007E 2008E 2009E 2010E 2011E

Mill

ions

Source: IBM IBV Research and Emarketer http://www.emarketer.com/Article.aspx?id=1005083

CAGR 2006-2011E : 24%

By 2011, worldwide there will be about a billion users

browsing internet over their mobile phone handsets: A 191% growth over 2006

figures and a CAGR of 24% from 2006 to 2011

191% growth from 2006 to 2011E

Worldwide Mobile Internet Users

-



Mobile internet usage will grow 39 percent in Western Europe in 2014 from 17 percent in 2008

At the end of 2009, mobile Internet penetration will reach 17 percent in Western Europe, the same level of adoption that PCs with Internet access had in 1999, which represents a critical mass.



A Superior Shopping Experience now includes Mobile Commerce as key touch point

Multi-channelcustomer experience

TransactPost-transaction

RelationshipDevelopment

ProductAffinity

Browsing

PurchaseDecision

In-store customer experience

Transact

Purchase Decision

Browsing

Store Entry Demand Generation

Post-transaction

Messaging, alerts, promotions(proximity, opt-in, loyalty)

Customer id, personalized experience & offerings

Product information, product look-up, IRC

Cross-sell, up-sell, availability

In-store & online payment scenarios

Warranty services, digital receipt

Provide personalized messages and alerts to your customers: product specials, recalls, etc

Product information, Consumer reviews

Compare, Cross-sell/up-sell, availability & Store locator

CCIS, Online payment

WISMO, Warranty services, digital receipt

Retail Integration Framework

Customer Interaction Platform

Product or category level awareness & education



Mobile StorefrontB

enef

its“Certain customers were trying to access the website from a mobile

device and weren’t able to perform all of the functions they wanted”

Ravi Acharya, Director eCommerce at Sears Browsing Purchase

Decision Transact



"Text me back with Rock, Paper or Scissors. I already know what I'm throwing and if you beat me I'll add 100 Moosejaw Points to your account now."

Superior brand experiences now include Mobile

Mobile Campaign targeting loyal customers drove a 69% opt-in rate resulting in 15% of net sales generatedby digital marketing during the same period

And the buzz:I love that I can just walk in and get a book and always have a coupon on hand now.

Save 25% off one item until March 12t h. Just mention coupon 95278 to t h e c a s h i e r .

Save 25% off one item until March 12t h. Just mention coupon 95278 to t h e c a s h i e r . “The customer walks into the

store and is encouraged to pull out their phone. Just like when you walk into a museum

and grab the headset and player. The mobile device will radically enhance the in-store

experience providing consumer reviews,

specs/stats, inventory status, and other key services.”

– Jeffrey Wolfe, COO Moosejaw Mountaineering

Demand Generation


Demand Generation



Not to forget ROPPIS….. and role of SMS “Thanks for your order. Your

product is ready for pick-up at our XXX store. Please quote order reference 123456”

and many more

RelationshipDevelopmentTransact



Halfords ‘Text and Reserve’ Car owner texts to Halfords a keyword, followed by reg. number ( “Headlamp Bulb R767

SBR”) Vehicle model, engine size, body type etc established by Halfords, using registration

lookup services SMS message returned to the customer:

– “Halfords recommends Halfords Super Brilliance Blue Bulb Single HBU4775BBH7, 802561, £22.99 for your PEUGEOT. Check stock in your nearest store by replying with your postcode.”

Customer sends postcode. Halfords assists further – “From Halfords. Your nearest store with product in stock is Redditch, 2.04 miles

away. To reserve, reply YES to this message.” Customer says ‘YES’. System processes request, sends reservation message to

customer and to store warehouse system e.g. – "Halfords reservation ref 8601043751 – Order reserved at Redditch B98 0DE 01527

584488. Check www.halfords.com for store opening hours.”

PurchaseDecision


ProductAffinity



Best Practices in Cross Channel Commerce

Run all channels on the same platform to provide context and consistency from touch point to touch point

– Web, Mobile, Contact Center, Kiosks

Support cross channel processes: Buy-Online Pickup in store

Mobile is early mainstream

37

Business Innovation



Operational Innovation

Use drop shipping to reduce risk and cost effectively expand your portfolio

39

700+ Mazda-branded Dealer Sites

Consumer

Channel Innovation: Mazda hosts 700+ Dealer-specific Sites

OEM



Business Model Innovation: Ritz Interactive

Extend your channel with strategic and affiliate partnerships



Business Model Innovation: Sears Strategic Partnerships

Arts

Entertainment Music & Movies

Books



Incorporate Web Channel into strategic planning cycle

Use the web and eCommerce to immediately identify new trends powering the next generation of micro-segmentation, responsive replenishment and mid-cycle assortment shifts

– Target influencers, UGC, ID new segments

Responsive value chains

Boomer

Teen

Consumer Content, Special

Incentives

Boomer Microsite

Teen Microsite

Teen Trends site

Splash Screen

Analysis and Feedback

Mechanisms

Mid-Cycle Assortment Shifts,

CPFR, Influence Planograms

Influencer

Multivariate AB testing



Customer Interaction Platform Strategy

The WebSphere Commerce “Customer Interaction Platform”, enables companies to deliver a consistent, customer-centric experiences across

multiple channels and touch points

Data

POS

Kiosk

Web

B2B sitesTele, mobile

Customer procurement / systems

Fulfillment

Suppliers

Retailers

Distributors


Back-end

B2B / Partners



BACKUP



Power Next Gen Interactions with Precision Marketing Deliver automated, one-to-one

merchandising and marketing based on shopper preference and behavior

Empower marketers to build a dialogue with consumers by processing triggers and responding with actions

Cross Channel Precision Marketing Engine

– Web, Mobile, Cross Channel– Social Participation– Integrated with ecosystem– B2B “behavioral marketing”– Behavioral segmentation and

personas

Triggers

Mobile

Order History

Personalization

Social Commerce

Browsing

Search

Point of Sale

Mobile

Actions

KioskEmaill

Promotions

Cross/Up Sell

Precision Marketing

Engine



Web activity– Control what displays in

predefined e-Marketing Spots on the store pages

Dialog activity– Automate marketing

actions based on the specific behavior of your customers over time

Management Center for Business Users



SEO and Landing Page Optimization



Cross Channel Dialog: Register and OrderCustomer Registers

SMS Order Confirmation

Thank you for your purchase. Your

order # is 13721

Places Order



Cross Channel Dialog: Register and No Action

Email OfferThank you for your registration. We’re

running a special on ____

Customer Registers

Wait one week



Social Commerce: Reward Active Participation

Customer Writes 5 Reviews

Change Banner $10 Off Next Order

Send $10 Off SMS Coupon

Thank you for your review.

Receive $10 off next order

Add to Active Participant Segment



Optimize Cross Channel Interactions with Mobile Commerce

Mobile Store Model– Product Information / Availability– Order Status / Tracking– Store / Stock Locator– Shopping List– Mobile Marketing

Mobile Message Support (SMS)

Cross Channel Transactions– Mobile Transactions

– Buy/Reserve on mobile, pickup in store

Integrated into Cross Channel Precision Marketing with support for Mobile triggers, actions



Browse Catalog View Product Detail View Ratings & Reviews Compare Products

Mobile Shopping



Mobile Transaction

Search Products Add to CartSelect Pickup Store &

Checkout View Order Confirmation



Optimize Cross Channel Processes

Buy Online and Pickup In-store (BOPIS)– Or Reserve Online and Pay/Pickup In-

store

Endless Aisle– Buy out-of-stock items in-store and

ship to home

Distributed Order Management (DOM) Integration

– Store inventory visibility– Order transfer, inventory allocation,

and status update



Optimize the Customer Experience



Rich Customer Centric Experience with new Web 2.0 Store

New B2C and B2B Store Models

Merges both traditional Web 1.0 and 2.0

Integrated Social Commerce

New Web 2.0 Widgets B2B Operational Support

Search engine optimization improvements

Performance Improvements

B2C Madison Store

B2B Elite Store



New B2C Web 2.0 Store

Scrolling e-marketing spot



Enhanced Category Page, Quick Info and Cart

Faceted Search

Mini Shop Cart

Quick Info




Oliver is shopping for an office espresso machine

Taps into his Facebook network of fellow Office Managers for their insight

Asks Community if this is a good machine for office use




Product ratings & reviews via– Bazaarvoice API-level integration

Forums and blogs via– Lotus Connections and Pluck integration– Integrated Product and Category blogs– Social Profiles (Public user profile)– Photo and Video Gallery– Forum / threaded discussion support

Vendor-agnostic integration via WebSphere sMash applications

Innovating the customer experience with smarter commerce versandhandelskongress 2009

Business

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