From Transactions to Relationships - Marketing Retail Perspective from IBM

© 2013 IBM Corporation

From Transactions to Relationships: Connecting with a Transitioning Shopper

Retail Industry Perspective

Mike HandesLead Marketing Solutions Consultant, A/[email protected]

mailto:[email protected]


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


Why?

Why is IBM investing in the CMO?


The CMO’s universe is changing…

Customers know more

Customers demand more

Your business expects more

Marketing must re-imagine its role

4


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


What drives our strategy?

6


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


8

Marketers must integrate all aspects of marketing

Earned media

PR

Owned media

Paid media

ad

ad


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


Smarter Marketing, IBM?

IBM Global Retail Consumer Study Today the store, tomorrow where?




Conclusion

Agenda



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 (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





A surprising one third of store shoppers are tempted to explore options other than the store for their next purchase


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





*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



6% Showroomed

2% Other

8% Bought online

84% Bought in a store


Connecting with transitioning shoppers

Agenda



Shoppers want retailers to provide personalized promotions and recommend relevant items


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%



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




IBM Global Retail Consumer Study




IBM Omni-Channel Marketing Optimisation Conclusion

Agenda



How customers behave

ad

social

search

display ad

Web

mobile

email

ATM/kiosk

phone

branch

POS

mail

customer


What they expect: coordinated marketing, integrated experience

ad

social

search

display ad

Web

mobile

email

ATM/kiosk

phone

branch

POS

mail

customer

marketer


What they experience: marketing silos

ad

social

search

display ad

Web

mobile

email

ATM/kiosk

phone

branch

POS

mail

customer

strategy dataprocess tech












Today’s discussion is about coordinated, integrated marketing

IBM calls this OMNI-CHANNEL MARKETING


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


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


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.


27


Creating a omni-channel marketing technology framework


28


CollectDecide

Analyze

Deliver

Manage



29

Collect

Manage

DecideAnalyze Deliver



Framework for omni-channel marketing

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• 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



Data flow within the framework

31


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


Specific capabilities required for omni-channel marketing

32


Collect


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


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



IBM Global Retail Consumer Study





Conclusion

Agenda



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

Technology

From Transactions to Relationships - Marketing Retail Perspective from IBM