Retailers engage today's interconnected consumers
It's no secret that technology is changing the rules of engagement for the retail industry. The world is getting flatter, smaller and smarter. Globally, people and systems are becoming more interconnected. With the proliferation of new technologies for bidirectional communication, today's consumers routinely utilize multiple channels: the Internet, digital television, mobile applications and social networking sites.
Thanks to the variety of shopping options and information sources at their fingertips, consumers can research products online, use social media to get feedback from other buyers and make purchases using whatever medium they find most convenient.
Given this new landscape, how can retailers create opportunities based on the ways consumers are interacting?
The IBM Institute of Business Value (IBV) surveyed more than 30,000 consumers worldwide about how they want to engage with retailers in the future, including the sort of technologies and social networks they want to use. Results reveal that consumers armed with knowledge gleaned from a multitude of sources want to interact with retailers in a way that is both relevant and timely: relevant to whatever they are shopping for, regardless of where, when and how they are shopping for it; and timely in fulfilling their needs.
As a result of these new levels of interconnectivity, consumers are both more informed and more demanding than ever. According to the IBV study, Meeting the Demands of the Smarter Consumer, in the U.S., over 92 percent of adults conduct research online and seek the opinions of others before they ever purchase a product from a store. Retailers, therefore, must find innovative ways to compete for their attention, as well as smarter approaches to e-commerce.
Establish cross-channel consistency
As the balance of power shifts in favor of consumers, retailers have tremendous new opportunities for innovation. They are looking to build a smarter retail experience by moving from a product-centric to a truly consumer-centric model, and that means creating opportunities based on these new modes of interaction.
Consumers rarely use just one channel throughout their relationship with a retailer. In fact, the IBV study found a significant number of consumers—36 percent—use two or more technologies to browse for and buy the goods they want. To gain traction with today's interconnected consumer, retailers are aiming to provide a seamless experience across every channel their customers are tapping. They're seeking new ways and venues for selling—both physical and virtual—to a very different kind of consumer.
Of course, delivering an intuitive cross-channel shopping experience involves more than just integrating standard buying and selling processes with e-commerce. It also requires retailers to integrate the information that drives loyalty programs and customer service measures such as online chats, toll-free phone support and in-store kiosks so regardless of how consumers prefer to communicate with the retailer, they can do so easily. And that's important because the IBV study found that consumers want to use different technologies for different activities.
Consistency across channels contributes to a strong brand message. By establishing a single, integrated source of customer purchase and service history, retailers can streamline customer support and enhance customer satisfaction, contributing to improved retention and increased sales. In addition, support for flexible purchasing options helps drive revenue by making the transaction as convenient as possible—for example, allowing customers to buy products online and then pick them up or return them later in the store.
Participate in the consumer conversation
Social media applications can be a useful tool for helping retailers develop a smarter approach to e-commerce. The IBV survey found that 33 percent of respondents are somewhat or very likely to "follow" a retailer on a social network, where a single consumer's shopping experience can influence the decisions many others make about what to buy and where to buy it. By monitoring the conversations taking place on user discussion boards, blogs and social media forums such as Facebook and Twitter, retailers can gain visibility into broadscale patterns of product performance and customer response, and then make any necessary adjustments in their retail strategy.
In addition, these interactive platforms serve as virtual focus groups that allow the retailer to participate and ask questions throughout the product life cycle. According to the IBV study, 78 percent of survey respondents said they would be willing to collaborate with retailers to develop products and services they desire, while 61 percent are inclined to spend more money with retailers that implement their recommendations. For example, a clothing manufacturer could leverage social media to learn why a particular shirt is not selling well. Perhaps customer comments in product reviews frequently refer to fit problems, or an interest in other colors. In turn, the manufacturer can use this information to adjust the shirt pattern to address the fit concerns and offer the garment in additional colors.
A flexible IT backbone reaches savvy consumers
Because smarter e-commerce depends heavily on coordinating the information and processes that drive key back-end systems, it is critical that retailers have the flexibility to mix and match software to meet their particular needs. Service-oriented architecture (SOA) can provide the technical foundation for these interconnected e-commerce systems and enable flexible deployment of tools from multiple sources.
SOA can help remove the traditional barriers to information sharing, helping to create seamless information flow across channels and across programs. This flexibility allows retailers to build a single commerce engine that supports a seamless shopping, support and loyalty program experience, whether customers are engaging online, in-store, from a mobile device or through their TV.
Shopping habits are changing as consumers incorporate new technologies into their daily lives and information becomes more readily available. To do business with shoppers on a smarter planet, retailers need a smarter approach to reaching today's interconnected consumers. The new ways consumers are interacting with each other—and with retailers—are providing new opportunities for innovative retailers to build community, loyalty and profitability.
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