ARMONK, N.Y., - 14 Mar 2011: IBM (NYSE: IBM), today announced new software and the creation a new consulting practice dedicated to the emerging category of "Smarter Commerce," which is focused on helping companies swiftly adapt to rising customer demands in today's digitally transformed marketplace.
The Smarter Commerce consulting practice extends IBM's leadership and investments in business analytics and optimization. The new software and services offerings, supported by global sales and marketing resources, will address the spectrum of enterprise commerce activities -- new ways to buy, sell and secure greater customer loyalty in the era of mobile and social networks.
IBM estimates the Smarter Commerce market opportunity at $70 billion, driven by demand from clients that must bring new levels of automation to marketing, customer engagement and sales, as well as core processes for production, fulfillment and service for much more immediate responses to changes in markets and buying trends.
IBM's Smarter Commerce initiatives draw on its market-leading WebSphere Commerce platform and a $2.5 billion investment in on-premise and cloud-based software from IBM's acquisitions of Sterling Commerce, Unica and Coremetrics.
IBM will deliver new integrated software building on these extensive capabilities, new services, and an education initiative to arm an extensive ecosystem of partners, suppliers and customers with new skills to connect the entire Smarter Commerce ecosystem. This includes:
A shift is occurring as social networking and mobile communications its putting more power into the hands of customers. Today, 70 percent of a customer's first interaction with a product or services takes place online, 64 percent make a first purchase because of a digital experience and of the two billion people connected to the internet, more than 600 million are on Facebook. This is compounded by an explosion of mobile purchases, which is tripling annually to $119 billion this year alone.
These disruptive forces are empowering consumers and raising their expectations of the entire customer experience. This power shift from the seller to the buyer is redefining the term "commerce." Retailers were the first to face the rising power of consumers but now companies in a wide array of industries such as manufacturing, telecommunications, financial services and others have begun adapting to these changes.
This is creating enormous challenges for businesses. What used to be seen as a flow of goods from manufacturers through a distribution chain to customers has become an interactive feedback loop, where consumers, producers, distributors, the media, and marketers all have new roles to play. Companies see "selling" not so much as a traditional function of their organization but rather as an ever-evolving set of services they perform for their customers -- performed in concert with their business partners.
IBM is taking a leadership role in helping organizations deal with this collision of market forces that have empowered customers, to also create powerful tools for businesses. Through new software and services, IBM is enabling clients to respond to market shifts in real-time, automate marketing, selling and fulfillment, while creating a global brand presence.
"It's a buyer's world now," said Craig Hayman, General Manager, IBM Industry Solutions. "Businesses require a tighter and highly responsive network of suppliers and partners to ensure they deliver the right product or service at the right price, time and place. The key to business success in this unfolding environment is predicting trends and automating market responses in advance to eliminate the gaps between buy and sell, supply and demand."
"If they are going to engage with customers that are more connected -- but not necessarily more connected to the people making and selling products and services -- businesses require a new set of capabilities that start with the ability to hear the global conversations taking place about their products and brands," said Paul Papas, global Smarter Commerce practice leader in IBM Global Business Services. "This new level of insight has to be followed by an entirely different kind of engagement with these customers, including a tighter and highly responsive network of suppliers and partners."
The sellers, or businesses, are largely unprepared for these changes. As a result, there are massive inefficiencies in the complex network of transactions that make up global commerce and its supply chain, at a time when economic and competitive pressures reduce enterprise margins for error to zero.
In addition to these shifts occurring in the front-end sales transaction, a recent IBM Institute for Business Value survey of more than 500 economists worldwide estimated that much of the $15 trillion in system inefficiencies on the planet comes from waste in inventory backlogs, failed product launches, wasted materials and ineffective marketing campaigns.
IBM is working with more than 2000 global and local brands such as global food producer Danone, McKesson, Moosejaw Mountaineering, US Lumber and 1-800-FLOWERS to ensure they are marketing to the right audience at the right time; engaging buyers seamlessly in all the right channels and mediums; maintaining inventory levels precisely aligned to demand and automating their supply chains for maximum efficiency.
“Being competitive today means being a lot smarter about all facets of commerce, from initial marketing efforts to customer interaction in the buying and selling phase to the product delivery and subsequent service that ensures customer satisfaction,” said Steve Bozzo, CIO of 1-800-FLOWERS.COM. “We are optimizing our entire order life cycle and improving the customer experience with a comprehensive solution from IBM that manages incoming orders from multiple channels in a timely and accurate way."
For more information, visit: http://www.ibm.com/press/smartercommerce.
News of interest to IBM investors
News about IBM retail solutions
Images related to IBM's Smarter Planet initiative