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Power Systems Helps Retailers Deliver Customer-Centric Offerings

“Customer insight should shape everything from design to distribution to end-of-product-life disposal,” says Dexter Henderson, VP and business line executive, IBM Power Systems. Photo by Jay Sauceda

Retailers are getting up close and personal with their customers, creating buyer-seller relationships designed to improve the customer’s experience and drive more transactions. Smart retailers know that personalized service needs to occur across every channel—in-store, online, mobile, call centers and chat. And customers expect retailers to know and understand their individual buying patterns and respond with customized offers no matter what channel is being used for shopping.

It’s a tall order, but retailers are rising to the challenge. The retail world is moving from an in-store focus to an omni-channel presence that encompasses online, chat, call centers and mobile. Brick-and-mortar stores are the dominant channel, but that’s changing, notes the IBM Institute for Business Value study “From Transactions to Relationships.” More than two-thirds of consumers surveyed for the study had made their most recent non-grocery purchase in a store; however, more than one-third couldn’t say if the next purchase would be in-store or online. The study suggests some of these shoppers could be “showroomers,” participants in an emerging trend where shoppers look at products in the store but make their final purchase online—and not necessarily from the in-store retailer.

No matter what channel is being used to make the final purchase, consumers are eager to have meaningful connection points with retailers. The study found that 89 percent of shoppers were willing to take 20 minutes to help a retailer understand them so they could receive tailored promotions. “Shoppers are willing to help the retailer initially, but the long-term heavy lifting is up to the retailer—not the shopper,” the study concludes.

Driven by Data

Creating a meaningful relationship with the consumer relies on data gathering and analytics. Savvy retailers are increasingly making use of these resources to drive competitive advantage. A whopping 62 percent of retailers in 2012 credited data and analytics with giving their operations an edge over competitors, according to the study “Analytics: The Real-World Use of Big Data in Retail” by the IBM Institute for Business Value and Saïd Business School at Oxford University. That’s a 107 percent rise from 2010, the study says. Big data is helping retailers transform from product-driven companies to organizations in which the customer is the central organizing principle around which data insights, operations, technology and systems revolve, the study notes.

One online retailer is creating customer profiles that use attributes and other data to forecast what purchases a consumer might make, according to the study. The company then designs marketing campaigns based on timing and offers messaging based on those attributes to optimize sales. The study found that the retailer increased customer loyalty and achieved a 94 percent “satisfied with purchase” rating from customers. Overall, the company saw a 30 percent increase in sales in one year compared to a 10 percent increase for its competitors.

A customer-centered focus requires retailers to make IT decisions based on satisfying that approach. In North America, the busy holiday season begins with Black Friday and Cyber Monday and runs through year’s end, putting pressure on retailers’ IT systems to perform optimally. The need for retailers’ systems to be reliable and available doesn’t go away after the holidays are over; customers expect systems to be up and running all year round. Retailers do, too.

Satisfying the Shopper

Smarter consumers demand that retailers and their systems be intelligent as well. Shoppers are navigating different purchasing channels, sharing information via Twitter, tapping into online customer ratings and utilizing technologies such as handheld devices to research products and services before making a purchase, notes Dexter Henderson, vice president and business line executive, IBM Power Systems*. “These rapidly evolving consumer behaviors have profound implications for retailers, since every customer interaction can influence hundreds or thousands of other shopping decisions,” he says.

The retail ecosystem is being revamped with the customer at the center. Customers are demanding a unified and differentiated shopping experience, no matter how they interact or which channel they use. As a result, retailers must have an in-depth understanding of customer behaviors, wants and needs. “Customer insight should shape everything from design to distribution to end-of-product-life disposal,” Henderson says. “Retailers also need to deliver the right merchandise assortment via instrumented supply chains that track every item and ensure the right items reach the right people at the right time through the right channels.”

Shirley S. Savage is a Maine-based freelance writer. Shirley can be reached at



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