From Transactions to Relationships - Marketing Retail Perspective from IBM
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Marketing challenges facing the CMO today. What do retailers need in order to meet the expectations of shoppers today?
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From Transactions to Relationships - Marketing Retail Perspective from IBM
- 1. © 2013 IBM Corporation From Transactions to Relationships: Connecting with a Transitioning Shopper Retail Industry Perspective Mike Handes Lead Marketing Solutions Consultant, A/NZ mhandes@au1.ibm.com
- 2. © 2013 IBM Corporation 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
- 3. © 2013 IBM Corporation Why? Why is IBM investing in the CMO?
- 4. © 2013 IBM Corporation The CMO’s universe is changing… Customers know more Customers demand more Your business expects more Marketing must re-imagine its role 4
- 5. © 2013 IBM Corporation5 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
- 6. © 2013 IBM Corporation What drives our strategy? 6
- 7. © 2013 IBM Corporation Over three years, these outperformers have achieved: • Nearly 2x gross profit growth • 3.4x net income growth • 2.4x stock price growth 20% 80% Adoptionofcross-channel optimisationtechnologies Ownership of the Customer Experience Source: IBM 2013 Global Survey of Marketers © 2013 IBM Corporation 7 Market Research
- 8. © 2013 IBM Corporation8 Marketers must integrate all aspects of marketing Earned media PR Owned media Paid media ad ad
- 9. © 2013 IBM Corporation 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
- 10. © 2013 IBM Corporation 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 10From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 11. © 2013 IBM Corporation 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 (26-34) n= 5187 Generation (35-44) n= 5154 Generation (45-54) n= 4487 Generation (55-64) n= 3202 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
- 12. © 2013 IBM Corporation Today the store, tomorrow where? 12From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 13. © 2013 IBM Corporation A surprising one third of store shoppers are tempted to explore options other than the store for their next purchase 13From Transactions to Relationships: Connecting With a Transitioning Shopper Global View 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
- 14. © 2013 IBM Corporation Showrooming, the small trend you can’t ignore 14From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 15. © 2013 IBM Corporation *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 retailer 34% One-third of showroomers bought from an online-only retailer, the other two-thirds from a multi-channel retailer 15From Transactions to Relationships: Connecting With a Transitioning Shopper Global View Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers 6% Showroomed 2% Other 8% Bought online 84% Bought in a store
- 16. © 2013 IBM Corporation Connecting with transitioning shoppers Agenda 16From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 17. © 2013 IBM Corporation Shoppers want retailers to provide personalized promotions and recommend relevant items 17From Transactions to Relationships: Connecting With a Transitioning Shopper Global View 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% Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
- 18. © 2013 IBM Corporation 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 of10 Source: IBV Retail 2013 From Transactions to Relationships: Connecting with a Transitioning Shopper Study n= 23466 Non-Grocery shoppers
- 19. © 2013 IBM Corporation 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 19From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 20. © 2013 IBM Corporation How customers behave ad social search display ad Web mobile email ATM/kiosk phone branch POS mail customer
- 21. © 2013 IBM Corporation What they expect: coordinated marketing, integrated experience ad social search display ad Web mobile email ATM/kiosk phone branch POS mail customer marketer
- 22. © 2013 IBM Corporation What they experience: marketing silos ad social search display ad Web mobile email ATM/kiosk phone branch POS mail customer strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech strategy data process tech
- 23. © 2013 IBM Corporation Today’s discussion is about coordinated, integrated marketing IBM calls this OMNI-CHANNEL MARKETING
- 24. © 2013 IBM Corporation Omin-channel Marketing Optimisation, defined 24 Engaging each customer and prospect in a dialogue that builds upon their past and current behavior dialogues, not silos! Omni-channel Marketing
- 25. © 2013 IBM Corporation How can technology help? 25 Optimising omni-channel marketing is like having a good conversation. Marketers need to: LISTEN AND UNDERSTAND DECIDE WHAT TO SAY NEXT (only then) SPEAK
- 26. © 2013 IBM Corporation How can technology help? 26 Optimizing cross-channel marketing is like having a good conversation. Marketers need to: LISTEN AND UNDERSTAND DECIDE 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. © 2013 IBM Corporation 27 LISTEN AND UNDERSTAND DECIDE WHAT TO SAY NEXT (only then) SPEAK Creating a omni-channel marketing technology framework
- 28. © 2013 IBM Corporation 28 LISTEN AND UNDERSTAND DECIDE WHAT TO SAY NEXT (only then) SPEAK Collect Decide Analyze Deliver Manage Creating a omni-channel marketing technology framework
- 29. © 2013 IBM Corporation 29 Collect Manage DecideAnalyze Deliver Creating a omni-channel marketing technology framework
- 30. © 2013 IBM Corporation Framework for omni-channel marketing 30 •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 DecideAnalyze Deliver
- 31. © 2013 IBM Corporation Data flow within the framework 31 •Budgets •Projects •Reporting Collect DecideAnalyze Deliver 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
- 32. © 2013 IBM Corporation Specific capabilities required for omni-channel marketing 32 •Budgets •Projects •Reporting Collect DecideAnalyze Deliver 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
- 33. © 2013 IBM Corporation 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
- 34. © 2013 IBM Corporation 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 34From Transactions to Relationships: Connecting With a Transitioning Shopper Global View
- 35. © 2013 IBM Corporation 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 35
Notas del editor
- Primary Research in 14 Countries - Total Surveyed (Non-Grocery) = 23,466 . 1739 in Australia.I am very excited to be able to talk with you today about the findings of this global study of shopping behavior. This study is different from other studies IBM has done in the past - previously one of the major themes was the consumer's use of technology and how that has changed shopping behavior especially during the moments of research. Today’s study ‘From Transactions to Relationships: Connecting with a Transitioning Shopper’ dives deep into the different ways people shop across channels during this time of considerable transition.When we say transition, the research shows this was not a glacial pace transition. It was well underway for many shoppers. Consumers sent us signals about their openness to transition in their replies about their last shopping trip and their plans for the next shopping trip. The study teaches us quite a bit about consumer behavior and what our retail clients challenges will be in the very short-term. The study also drives IBM's strategy and how we can best partner with clients during this tumultuous time.
- I often get asked, Why is IBM investing in marketing solutions and technology? What are the drivers/motivations? Doesn’t IBM just sell widgets and gadgets?
- We all know that the world is changing, that the job of the marketer is to help find and keep a customer. Expectations from your customer have raised the bar for marketing. They are not just benchmarking you against your competitors, but against the best companies delivering the best customer experience. Creating a lot of complexity in the marketer’s world.Customers know moreThey compare notes and instantly share. And they can champion a brand or sully a reputation with the click of a mouse. 50% of smart phone owners have used their mobile phones to search for information in a store ComScore June 201150% of US consumers with a tablet or smartphone are using it while they are in front of the TV. Source: Nielsen, October201190% of consumers online trust recommendations from people they know; 70% trust opinions of unknown users. (Econsultancy, July 2009) Customer Demand More80% of CEOs think they deliver a superior customer experience, 8% of their Customers agree, Bain and Company, Close the Deliver Gap, 200588% of US Web buyers have abandoned an online shopping cart without completing a transaction,63% of all online adults said they would be less likely to buy from the same company via other purchase channels if they experienced a problem conducting a mobile transaction. (Tealeaf and Harris Interactive Mobile Transaction Survey)The business demand more of marketingIncreasing marketing being asked to measure/explain spending – top challenge from the IBM CMO surveyLeverage social for business benefitGuide interactions across more and more channels.
- But what does this mean? I am sure none of this new news to you. Knowing your customers is key – talking to them as individuals – addressing their needs
- So who are these leading marketers.We defined marketing leadership in the follow way: We segmented respondents based on how they clustered their answers around the highest rated end points of two survey questions.First, how extensive was their adoption of cross-channel technologies for online/offline - digital and traditional. And second, what was their level of influence in directing and managing the customer experience across all channels.To become a leading marketer, you had to answer yes to both questions. In our view, this approach underscored that leading marketers are an elite group: more effective at engaging their customers across channels; assuming broader levels of responsibilities; and, adopting technology to establish a line of sight on the how, why, what, where and when to communicate with customers on a personal level.But in order to let this guide your roadmap and strategic direction – you need evidenceSO we have collected empirical evidence to back it upLeading marketers assume ownership for customer experience and are progressively working to build a system of engagement
- To build a meaningful relationship with “empowered customers,” businesses need to coordinate better all aspects of their customers’ experiences.The problem is that most marketing organizations still have many marketing groups that operate in silos. Some groups are organized by the communications media, channels and customer touchpoints they are responsible for – one group for advertising or other “paid” media, other groups for “owned” media – the company’s own Web site, emails, call centers, etc., yet other groups for “earned media” such as social media. Some groups handle other aspects of the “four Ps” of marketing, such as pricing, promotions and product mix decisions.Marketers need to bring together their marketing efforts across all these aspects of marketing, to create more coordinated, engaging customer experience.
- Second, they lack a platform to manage all of marketing, which would make it easier to take action based on the insights from a complete understanding of each customer, and coordinate those actions in the way empowered customers demand. There are more moving parts than ever in today’s marketing organization, and managing all marketing efforts in a cohesive way is nearly impossible without the help of automation with software.IBM’s Enterprise Marketing Management (EMM) suite can help marketers in both of these areas.
- Last Updated: 2010-10-01 (r2)Overview:Boots is the UK's leading pharmacy-led health and beauty retailer and they use Unica Campaign and Optimize for their marketing campaigns. Using their Advantage Card, Boots gathers deep customer insights and uses that data in Unica Campaign for segmentation. Then Unica Optimize is used to drive highly targeted offers presented on mailing statements and at kiosks in the stores. The statement mailing is generated with up to 12 personalized offers per customer based on their prior transactional buying trends; with Unica Optimize driving the final decision on which offers each customer receives on the statement. They also hold in-store events which promote products that earn customers double or triple points on their card. Challenges:Results:Since implementing Unica Campaign and Optimize, Boots has seen the following increases across three areas:1) Test and Learn Program (Targeted, segmented offers) – using Unica OptimizeTotal ROI on program of 193%Incremental sales increased 21% year over year (Incremental sales = actual cash through tills)2) Christmas Events in Stores (Offers based around advantage cards points – double or triple points for spending in stores)Incremental sales from loyalty card activity in the area of 9 figures (multi-million pounds).Three events leading to a 90% year over year increase in salesNet profit increase of 74%3) Mailed Statement Offers (evaluated quarterly and at the end of each fiscal year)a) October - Incremental sales increased 16% and profit increased 60% with higher margins and increased upsellCoupon response rates up 20%Response to Threshold offers up 50%b) January – Incremental sales increased 17% year over year and net profit increased 71%Material from 2010
- CUSTOMIZE WRAP UP POINTS AS NEEDED FOR YOUR CUSTOMERFirst is IBM’s unmatched solutions serves the needs of marketers. There are thousands of marketing organizations that are using IBM’s award winning marketingsolutions. These marketers are from every major industry, and around the world – literally from six different continents. This means marketers buying EMM solutions from IBM have many best practices to leverage, peers to network with, and also that IBM can draw on the best practices of the world’s leading marketers to build its products.Second, IBM has both the broadest and deepest product functionality on the marketplace and can give you the confident to navigate the changes ahead. IBM has more marketing software modules that any other vendor, each module addressing an important marketing need. IBM gets top ranks from leading industry analysts, and is working every day to integrate these tools together. And you can expect this product leadership to continue, as IBM has made a strategic commitment to marketing software.Finally, IBM has a groundbreaking vision for the future of its marketing software offering that will help you with your customer experience goals. The vision for IBM’s Marketing solutionsis to continue to drive marketing into the very fabric of Smarter Commerce and breakdown silos across business functions. IBM sees the future of marketing software as being made up of best in class software, services, as well as the new and emerging requirements of CMOs and marketing practicioners around the world.