Empower consumers. Increase productivity. Profitably compete in a saturated market. Today, mid-sized retailers need powerful tools to conquer a turbulent environment. IBM can help with tailored solutions. Click for information and a complimentary copy of National Retail Federations's report, Deeper Customer Insight - an in-depth look at five retail megatrends of 2010.
IBM Business Consulting Services
Deeper customer insightUnderstanding today's complex shoppers
An IBM Institute for Business Value executive brief
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ibm.com/bcsIBM Business Consulting Services, through the IBM Institute for Business Value, develops fact-based strategic insights for senior business executives around critical industry-specific and cross-industry issues. This executive brief is based on an in-depth study by the Institute's research team. It is part of an ongoing commitment by IBM Business Consulting Services to provide analysis and viewpoints that help companies realize business value. You may contact the authors or send an e-mail to iibv@us.ibm.com for more information. Contents Introduction1 Introduction In today's evolving marketplace, retailers face a "world of extremes" characterized by unprecedented complexity, intense competition and market polarization. Customers 1 Five "megatrends" for 2010 are increasingly demanding relevant value propositions that meet their individual 3 Driving innovation through needs and preferences and will seek out those retailers able to provide them. This new deeper insight environment requires a shift in thinking from "bell curves" to "well curves" - as growth 5 Focus on shopping and perceived customer value migrate to opposite ends of the competitive spectrum. occasions: Three product examples Retailers thus need to become truly customer-centric in strategy and execution 5 Grocery to avoid being overtaken by more sophisticated competitors. Customer centricity starts through a deeper understanding of the multiple dimensions and drivers of 7 Consumer electronics target customers' shopping decisions. By developing unique, proprietary insights 10 Apparel about their customers, retailers can create a more tailored and relevant shopping 12 Consumer decision experience which sets them apart from the competition.process modeling How are customer value drivers fragmenting? What do today's shoppers want in 17 Conclusion different situations? The IBM Institute for Business Value recently conducted new 18 About the authors research among U.S. shoppers in several product categories to investigate different 18 About IBM Business customer "needs states." In this paper, we present a selection of our findings to Consulting Services highlight the value of new and innovative analytical techniques in building deeper customer insights.
Five "megatrends" for 2010In a previous in-depth report on the future of the retail marketplace, we identified five deep-seated trends that are reshaping the business environment (for more details, see the Related publications section at the end of this document for the IBM executive brief "The retail divide: Leadership in a world of extremes"):
. Customer value drivers fragment. Micro-market segments are resulting from pro-nounced shifts in demographics, attitudes and patterns of behavior. Customers are "trading up" to premium brands and simultaneously "trading down" to low-cost providers.. Gatekeepers become more guarded. Overwhelmed and time-strapped customers are exerting greater control over their interactions with businesses. Empowered by new technology and regulation, they will more aggressively protect their identities and personal data from "me-too" marketing tactics.
1 Deeper customer insight IBM Business Consulting Services. Information exposes all. Customer choices are being shaped through unparalleled access to information - virtually wherever, whenever and however they want it. . Megaretailers break the boundaries. The world's top retailers are rapidly expand-ing across geographies, formats and product/service categories, blurring market segments and devouring market share. . Partnering becomes pervasive. Leading companies are creating flexible "value networks" based on strong integration and collaboration with alliance partners. Competitors will be challenged to match the responsiveness and agility of these "connected" market leaders.
These megatrends are driving the industry to a "world of extremes" where customer diversity and individualism are pervasive, and traditional segmentation is rendered inadequate. Customers demand low prices for basic goods, but pay premiums for products that matter more to them personally. Consequently, those best positioned to grow and succeed will be huge megaretailers on one end of the spectrum and targete... [download for more]
