Retail Industry Vertical
February 2011
Creating A Smarter Cross-Channel
Experience
Integrating Industry Solutions Across Channels
Retail Industry Vertical
February 2011
AGENDA
Industry drivers and execution gaps
The solution
Customer benefits
Demonstration
2
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
AGENDA
Industry drivers and execution gaps
The solution
Customer benefits
Demonstration
3
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
Today’s ‘Smarter Consumer’ Sees One Brand, Not Multiple Channels
4
© 2011
IBM Corporation
© 2011
IBM Corporation
Consumers’ Brand Interaction Is Ever Changing And Constantly Evolving
5
Store
Research
Product
Create Order
Change Order
Call Center
Research
Product
Create Order
Change Order
Web
Research
Product
Create Order
Mobile
Research
Product
Create Order
Schedule
Delivery
Cancel Order
Pickup
Initiate/Track
Return
Schedule Delivery Check Status
or Pickup
Cancel Order
Schedule
Store Pickup
Initiate/Track
Return
Change Order
Schedule Delivery
or Pickup
Check Status
Cancel Order
Schedule
Store Pickup
Initiate/Track
Return
Change Order
Schedule Delivery
or Pickup
Check Status
Cancel Order
Schedule
Store Pickup
Initiate/Track
Return
Check Status
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
They’ve Come To Expect Seamless Cross-Channel Retail Execution
85% of respondents “expect a seamless
experience across all channels for a retailer”. 1
1
6
Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
And, Their Expectations Keep Rising
2007-2010 Comparisons1
Cross-Channel Consumer Expectations
2007
2010
Complete an order anywhere
55%
61%
Modify an order anywhere
65%
74%
Track an order anywhere
56%
87%
Shipping Notice (via any combination of channels)
94%
88%
Shipping Delays (via any combination of channels)
91%
91%
Delivery Notice (via any combination of channels)
78%
79%
Cross-channel return to store
90%
84%
1
7
Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
And, Retailers Are Responding To Their Customers’ Cross-Channel
Expectations
69%
In-store pickup of cross-channel orders
Currently support (46%); plan to support in 12
months (23%) 1
77%
In-store returns of on-line purchases
Currently support (57%); plan to support in 12
months (20%) 1
Source: Edge Research Retailer Survey; 2010
8
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
They’re Taking Action To Address Their Customers’ Cross-Channel
Expectations
76%
Cross-channel order/shipment status
tracking
Currently support (47%); plan to support in 12
months (29%) 1
76%
Single cross-channel view of customer
purchases
Currently support (40%); plan to support in 12
months (36%) 1
Source: Edge Research Retailer Survey; 2010
9
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
Nearly All Are Focused On Improving Their Cross-Channel Capabilities
84%
Deliver improved cross-channel capabilities
High priority (32%); medium priority (52%) 1
Source: Edge Research Retailer Survey; 2010
10
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
AGENDA
Industry drivers and execution gaps
The solution
Customer benefits
Demonstration
11
© 2011
IBM Corporation
© 2011
IBM Corporation
The Need: Seamless Cross-Channel Retailing
Consumer
Store
Web
Mobile
12
© 2011
IBM Corporation
© 2011
IBM Corporation
The Solution: Integrated Cross-Channel Execution
IBM Sterling
Order
Management
Smarter
Checkout
WebSphere
Commerce
Store Associate
Mobile
13
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
AGENDA
Industry drivers and execution gaps
The solution
Customer benefits
Demonstration
16
© 2011
IBM Corporation
© 2011
IBM Corporation
Retail Industry Vertical
February 2011
Cross-Channel Retailing Directly Impacts The Following Areas
 In-Store Pickup
 Additional in-store purchases (cross-sell/up-sell)
 In-Store Returns
 In-store purchases (converting the return back into a sale)
 Recovering From Out Of Stocks (OOSs)
 OOS item sale (66% of consumers would purchase an OOS item if the retailer could find it at an
in-stock location and ship it to the customer)
 Companion items (42% of consumers faced with an OOS leave the store without purchasing
anything)
 Future shopping trips (40% of consumers who experience an OOS shop less often at the
offending retailer)
 Cross-Channel Sourcing
 Avoiding duplicate safety stock
 Available-To-Promise Sourcing
 Inventory reductions by sourcing from in-transit inventory (before it arrives at the DC)
 Sourcing From End-Of-Life (EOL) Inventory
 Reduced markdowns by sourcing from inventory pools with excess inventory
17
© 2011
IBM Corporation
© 2011
IBM Corporation
Cross-Channel Retailing – The Foundation Of Retailing Going Forward
Cross-Channel Retailing Results Can Be Estimated
Example: $2.9Bn Retailer
Projected ROI
In-Store Pickup
Revenue Increase
In-Store Returns
Revenue Increase
Recovering From Stock-outs
Revenue Increase
Cross-Channel Sourcing
Liberated Capital
ATP Sourcing
Liberated Capital
Sourcing From EOL Inventory
Revenue (Avoided Markdowns)
TOTALS:
Revenue Increases
Liberated Capital
18
Ongoing Annual
Conservative
Reasonable
$7,333,333
$55,733,333
$12,787,500
$32,395,000
$4,047,974
$12,731,951
$298,529
$585,350
$2,055,342
$3,083,014
$12,425,640
$17,542,080
$36,594,447
$2,353,871
$118,402,365
$3,668,364
© 2011
IBM Corporation
© 2011
IBM Corporation
The Solution: Integrated Cross-Channel Execution
IBM Sterling
Order
Management
Smarter
Checkout
WebSphere
Commerce
Store Associate
Mobile
20
© 2011
IBM Corporation
© 2011
IBM Corporation
Buy Online Pick Up In Store – Demo Configuration Overview
Smarter Commerce: Cross-Channel Inventory Visibility (Web, Mobile, Store)
IBMSterling
Distributed Order Mgmt
WebSphere Commerce
Internet Explorer /
Windows / Laptop
IBMSterling
Store Associate Mobile
iPad Touch 3rd
Generation
Internet
Global Solution Center
Dallas, Texas
WebSphere Commerce + WebSphere ESB +
Sterling SSFS / AIX / IBM System p
© 2011
IBM Corporation
© 2011
IBM Corporation
“Click and Collect” Buy Online Pick Up In Store – Demo Overview
Seamless Cross-Channel Retail Execution (Web, Mobile, Store)
WebSphere Commerce
Retailer:
Consumer:
IBMSterling
Distributed Order Mgmt
IBMSterling
Store Associate Mobile
iPod Touch 3rd
Generation
Madisons
Tom Watson from Toronto, Canada
• Consumer makes purchase on the Web
• Requests in-store pickup
• Order Management signals store to pick & hold the item
• Store Associate accesses pick list via mobile device and confirms
• Customer sees an additional item they want but only display model available
• Associate uses mobile device to locate the out-of-stock item “Saving the
Sale” and completes the financial transaction
© 2011
IBM Corporation
© 2011
IBM Corporation
Hindi
Thai
Traditional Chinese
Gracias
Russian
Spanish
Obrigado
Thank You
Brazilian Portuguese
English
Arabic
Da n k e
German
Grazie
M erci
French
Italian
Simplified Chinese
Korean
Tamil
Japanese
23
© 2011
IBM Corporation
© 2011
IBM Corporation