Smarter Commerce: Is Your Strategy as Smart as Your Customers?
Wes Simonds 120000EFD6 firstname.lastname@example.org | | Tags:  b2c supply center management market buy customer b2b service analytics commerce sell smarter-commerce chain smarter summit e-commerce global
0 Comments | 8,160 Visits
The following contribution is by guest blogger Wes Simonds. Over the next few months, Wes will share with you his perspective on the role of software in transforming business and building a smarter planet. Wes worked in IT for seven years before becoming a technology writer on topics including virtualization, cloud computing and service management. He lives in sunny Austin, Texas and believes Mexican food should always be served with queso.
Customers today are more informed and powerful than ever before. Commerce strategies should be as well. Going forward, organizations need a smarter approach to commerce -- an approach that's not just smarter than what they're doing now, but that also becomes smarter over time.
Tap the wisdom of crowds
Establishing just what those interests are, of course, is an area where many organizations could stand to improve. Today, customer information is available from far more sources than ever before -- a clear opportunity, but one that's not always pursued ideally. Sales data, the most common assessment of customer needs, can be supplemented with many other forms of insight.
Example: 155 million daily status updates on Twitter. Any time specific companies, products or services are mentioned, that’s a data point worth considering. Are organizations really leveraging that tremendous and freely available data -- tracking customer interest and sentiment before and after the sales numbers come back?
"The convergence of social networking and mobile computing has given rise to empowered consumers who demand a tailored, compelling online experience," said Robert Gilbreath, E-commerce Director, Calendars.com. "IBM is the company we trust to help us continue to evolve our approach to customer-centric, online marketing, and identify new opportunities as they arise."
Once information has been obtained, there's also the question of how it should be integrated into, and across, business processes and domains. Many organizations have already integrated the various stages of the supply chain to reflect customer demand, drive up business agility, and drive down costs. But have they applied that idea on a larger scale, linking customer information obtained in one domain to other domains entirely -- such as marketing and service -- in order to create as much customer-defined value as possible?
To see how this can happen, consider the commerce cycle in terms of four essential stages -- buy, market, sell, and service. Smarter commerce strategies put customer interests at the center of all four.
Buy: Get what you need to satisfy your customers
This stage revolves around the sourcing and procurement of basic goods and services in proportion to customer demands. Common functions include trading partner management, supplier management, supply chain visibility, logistics and inventory optimization.
Up-to-date customer information is critical to ensure that the Buy stage is as intelligent, adaptive and efficient as possible. As customer interests change dynamically, so must operations in this phase -- always mirroring as closely as possible the changing customer picture.
TrueValue -- one of the world's largest retailer-owned cooperatives, serving more than 50 countries with more than 5,000 stores -- recently enhanced this phase of the commerce cycle to excellent effect. In order to simplify getting the right products to the right locations at the right time, the organization implemented a software-driven supply-chain visibility solution to integrate data across its entire trading network.
The results? A 57 percent reduction in lead time, a 10 percent increase in fill rate and an 85 percent decline in back orders.
Market: Connect with the right people, the right ways
Creating unique value via products and services, of course, isn't enough. It's also critical to communicate that value to customers (and potential customers).
This is the heart of Market, the second stage in the commerce cycle: personalized, tailored communications designed to strengthen the brand, express competitive strengths, and even engage the audience with context-relevant offers.
Establishing just what that context means, though, is no simple feat. It requires deep insight into how different customers think, what their interests are, and how those interests are changing over time. Organizations that manage this task quickly and accurately will find it much easier to increase customer satisfaction and, in return, experience an improved business outcome.
Already, leading retailers are achieving these goals through customer-centric, analytics-driven marketing. One example is L’Occitane en Provence, an international manufacturer of skin care products and fragrances that, observing a decline in customer engagement via e-mail, decided to provide more targeted marketing -- pairing customer interests more specifically with carefully selected content.
As a result, the conversion rate (percentage of e-mails that result in a sale) has climbed from 0.14 percent to 2.43 percent -- a seventeen-fold improvement. Even more impressively, revenue per e-mail has increased by a stunning 2,500 percent.
Sell: Close the deal in a customer-chosen way
The third stage, Sell, is the direct fulfillment of products and services across all channels. The goal is to enable customers and partners to buy what they want, when they want and where they want -- or via the platform deemed most convenient and desirable.
Key to this stage is flexibility. As attractive new sales platforms emerge, such as mobile technologies and more generally the ongoing juggernaut of the web, organizations must leverage those platforms to the fullest extent. In this way, they can better serve both their customers' interests and their own growth goals.
Among many organizations pursuing this aspect of smarter commerce is fashion retailer David’s Bridal. Recently, this company decided to pursue a major revision of its website in order to better accommodate rising levels of customer traffic, present its catalog in a customer-centric fashion, and scale to meet anticipated future needs. Also central to the project was this goal: learning from customers what their particular needs might be, and meeting those needs online.
David’s Bridal implemented an IBM e-commerce solution with enormous success. Traffic has climbed in a single year by roughly 20 percent, and the average customer also now views an estimated 20 percent more pages per visit to the site. That increase translates into a better understanding of each customer -- key information needed to drive a better, more personalized experience.
Service: Stand behind your sales
Following sales, it's crucial that organizations continue to create customer value through effective service and support. Without it, temporary customer issues could become permanent problems, threatening brand strength and competitive positioning going forward.
One of the top car rental organizations, Hertz, recently decided to optimize its post-sales support and service capabilities for exactly these reasons. Instead of manual analyses based on customer feedback -- a relatively slow and inconsistent process -- the company selected smart analytics solutions to capture customer experiences in real time and quickly deliver the prioritized results to management.
This technology, based on linguistics rules, can accurately classify digital customer feedback ranging from a "no problems" report to a request for a callback. And thanks to its speed, it positions Hertz to serve customers more quickly, substantially driving up customer satisfaction as a result.
Smarter and smarter over time
Smarter commerce is thus smarter for both organizations and their customers. It offers an optimized way to create business growth by creating more value, in more ways, to more people -- a definitive example of a classic win-win business strategy.
And beyond the optimizations possible in each stage of the cycle is cycle-to-cycle optimization. Just as each stage provides information to improve the next stage, each whole cycle can provide information useful to the next cycle. In this way, the organization's commerce strategy not only is smarter, but gets smarter.
"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."
Interested in discussing these topics further? Consider attending the Smarter Commerce Global Summit 2011 -- a thought-provoking conference focusing on how to redefine your approach to commerce and deliver a superior customer experience by making better use of available information. Specific topics will include e-commerce, supply chain management, mobile and social commerce and analytics/insight.
Does your organization really understand what its customers want? Is it meeting those needs as swiftly, accurately and comprehensively as it could? Is customer information integrated into every stage of the commerce cycle?
What's your smarter commerce strategy?
Register for Smarter Commerce Global Summit 2011
Learn more about Smarter Commerce
Follow Smarter Commerce on Twitter
Check out the Smarter Commerce blog
See Smarter Commerce on YouTube
Like Smarter Commerce on facebook
About the author
Guest blogger Wes Simonds worked in IT for seven years before becoming a technology writer on topics including virtualization, cloud computing and service management. He lives in sunny Austin, Texas and believes Mexican food should always be served with queso.