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Are Retailers Meeting Today’s “Empowered Consumers’” Expectations?

  • Written by Jim Bengier, Global Retail Executive, Sterling Commerce, an IBM Company

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Consumers’ expectations of a seamless cross-channel shopping experience are higher today than ever before as increasingly they merge brand touch points into one continuous interaction. These “empowered consumers” are redefining the shopping process by demanding more options at every step. Retailers must get smarter about how they manage the entire commerce lifecycle in order to address increasing consumer demands and create brand intimacy. In short, they must embrace Smarter Commerce.

For more details on consumer expectations, let me share some data points that came from a retail benchmark IBM conducted over the 2011 Thanksgiving weekend. The fourth annual IBM Benchmark tracked more than a million transactions a day, analyzing terabytes of raw data from 500 retailers nationwide, giving us a look into what consumers were buying and how they were interacting with brands. The study found:

  • Thanksgiving sales were up 39% versus Thanksgiving 2010.
  • Black Friday online sales increased by 24.3% over Black Friday 2010.
  • Cyber Monday online sales were up 33% compared to Cyber Monday 2010.

IBM Benchmark findings also confirmed continued growth of mobile shopping:

  • Black Friday witnessed the arrival of mobile deal seekers, who embraced their devices as a research tool for in-store and online bargains. Mobile traffic increased to 14.3% on Black Friday 2011 compared to 5.6% in 2010.
  • On Cyber Monday, purchases made on mobile devices surged to 6.6% from 2.3% on Cyber Monday 2010.
  • On Cyber Monday 2011, shoppers using the iPad completed more retail purchases, more often, per visit versus other mobile devices, with conversion rates reaching 5.2%.

Social networking sites also came to the forefront during Thanksgiving weekend:

  • On Black Friday, Facebook accounted for 75% of all social media traffic, a figure that increased to 86% on Cyber Monday.
  • Shoppers referred from social networks generated 0.56% of all online sales on Cyber Monday and 0.53 percent on Black Friday.
  • Discussions on social media sites leading up to Cyber Monday increased in volume by 115% versus 2010. Topics leading into Black Friday included out-of-stock concerns, waiting times and parking, and a spike in positive sentiment around Cyber Monday sales. Top areas of discussion leading into Cyber Monday focused on consumers sharing tips about using price comparison web sites while avoiding cyber scams.

These findings reinforce the idea that shoppers are demanding more visibility across channels and are turning not retailers but social networks — and their friends — for guidance on what to buy. They can share shopping disappointments — such as out-of-stocks, challenges with returns, or retailers with whom it is difficult to do business. But how well prepared are retailers to create brand intimacy in this new environment? A year ago, our retailer survey showed that they were not prepared:

  • Only 42% of retailers had the capability to check store in-stock availability via mobile phones.
  • Six out of 10 retailers claimed they could not yet provide cross-channel order history.
  • 43% of retailers didn’t allow in-store returns of online purchases. 

But, in 2011, we have seen a number of retailers embrace Smarter Commerce, which brings new levels of automation to marketing, sales and fulfillment to secure greater customer loyalty. In addition to helping retailers deliver a smarter shopping experience around merchandising, Smarter Commerce also facilitates the supply chain in becoming more agile to meet demand fluctuations. This year we’ve seen retailers:

  • Implement new order management solutions to gain inventory visibility across all channels.
  • Re-platform their e-Commerce sites to gain social and mobile capabilities as well as comprehensive personalization features.
  • Deploy e-Commerce software on IBM hardware to optimize their web sites for high volume transactions to support customer-centric business models.
  • Utilize new fulfillment options such as ship-from-store to a customer’s door, in an effort to recover from out-of-stock merchandise and reduce markdown inventory.
  • Invest in customer analytics to understand and anticipate customer behaviors and needs based on consumer insights across all channels.
  • Adopt new sourcing and procurement functionality to expand their product assortments and optimize supplier interactions across extended value chains.

Technology isn’t going away and there is little chance that consumers will want to be less connected in the coming year. Instead of seeing these new communication channels as a burden, retailers need to embrace these new tactics as a way to gain deeper insight into their customers. By maximizing the data that can be obtained from these channels, retailers can improve their ability to anticipate and predict behavior, making the commerce supply chain more nimble. Retailers also can create a shopping experience that is more cohesive across channels. Best-in-class retailers are taking steps in this direction by closing the gap between what they deliver and what consumers expect.



Jim Bengier is a seasoned retail supply chain executive, with more than 25 years of experience within the apparel, footwear and electronics categories. Bengier has spoken at Retail Executive Summits and participated in National Retail Federation round table sessions. He also is a member of the Council of Supply Chain Management Professionals, NRF International Trade Advisory Committee Policy Council, NRF Strategic Supply Chain Council, and the Supply Chain and Logistics Forum. As Global Retail Executive for IBM, Bengier helps clients solve complex challenges, bridging the gap between consumer expectations and retailer preparedness.