Behind the Strategy: Commerce and the Connected Customer
Chris Luongo 060000C6S6 email@example.com | | Tags:  websphere analytics social smarter-commerce business customer commerce ibm smarter-planet smarter
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Just like the Internet transformed retailing, media and entertainment in the 1990s, social networking and mobile communications are now putting even more power in the hands of individuals.
Today, 70 percent of a customer's first interaction with a product or service 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. Think of this as the era of the connected consumer.
The shift is a good thing. It means consumers know more than ever about their choices and can comparison shop for the best price with ease. They get what they want when they want it. And they can make their opinions known — positive or negative — to thousands or even millions of other consumers.
This big shift in how customers connect brings profound consequences – redefining the term “commerce.” 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. Smart 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.
Toward that end, organizations are getting more intelligent, so that vast amounts of customer data — from demographics, to product-purchase histories, to online conversations — can be analyzed and turned into real value in real time.
They are getting more interconnected, so that customer insight can be fed into every point in the process – from design to distribution. And they are extending this network of insight to suppliers and partners, because no business can innovate alone.
And they are getting more instrumented, so every item of inventory can be tracked; every interaction with customers can be understood.
Smarter Commerce at work
Leaders in every industry are turning to dynamic business networks that span human, digital, social and mobile modes.
For example, an electronics retailer is using seemingly unrelated purchasing events to get the products its customers want on the shelves when they want them, and make the whole shopping experience seamless across all channels – from brick-and-mortar, to the Web, to mobile.
An automaker is continuously improving its products by infusing customer feedback and reviews into the design process, and pulling in the best parts, suppliers, and assembly expertise without disruption as market needs continuously change.
A bank lender is taking a 360-degree view of its customers using predictive analytics to determine which types of products might interest a patron and even when, where and how to approach them — putting customers at the center of its strategy for what new services are introduced.
The complexity of the taskBuilding dynamic business networks that span human, digital, social and mobile access modes isn’t easy. Businesses often find themselves with too many siloed systems, and too many unique processes that don’t share information or integrate very well.
But now there’s new technology that enhances and automates the way businesses connect – across the wide range of systems and activities flowing between departments, businesses, and into the cloud. There’s also clever analytics software that can turn vast streams of data into a narrative that people can understand and put to use.
Defining a new market
Powerful software tools and services are available from IBM to help companies to better address the connected customer.
In March 2011 IBM debuted its Smarter Commerce Initiative with new software solutions designed to help companies intelligently automate supplier and trading partner interactions, automatically turn marketplace insights into marketing and sales actions, and seamlessly connect online, mobile and social channels to physical stores. IBM is defining and leading this new market, which is expected to grow to a $20 billion opportunity in software alone by 2015, driven by demand from clients that must bring new levels of automation to marketing, selling and fulfillment, and managing brands.
IBM has also put together a robust consulting services practice and a “university” program to teach commerce skills to clients. It’s packaging all of these capabilities together and presenting them as an integrated set of technology and business solutions. And now with IBM's help, leaders in every industry are serving the connected customer's needs at every turn.