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To earn—and retain—loyal customers, retailers are looking for hidden connections to transform how they do business

For a German bakery chain, the weather forecast helps determine demand. A zoo in the US was able to create real-time program changes based on park visitor flow. And a Spanish children’s clothing line was able to reactivite customers with effective offseason communications.

What do all these retail success stories have in common? Predictive analytics. That means the organizations don’t just use analytics to find information. They use smarter analytics (US) with sophisticated algorithms to turn past transactions into future insights.

The forces driving this need for pervasive customer-centric analytics include the rise of the perpetually connected, hyper-informed consumer; social media's influence on consumer brand sentiment and purchase intent; and new complexities in product, category, supply chain and marketing.

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Jill Puleri Jill Puleri
VP, Global Industry Leader - Retail, Global Business Services

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The digitally connected consumer
John Squire, Director of Digital Marketing & Analytics, IBM, shares his thoughts on the imperative for retailers to create a seamless shopping experience for today's empowered consumers. Watch the video. (YouTube,00:02:38)

Everything is known: the connected consumer

In years past, retailers were faced with a more informed consumer who was able to research prices and products before purchasing. Now that research takes place right in your store, with smart phones connecting consumers to reviews, ratings, price comparisons and communities, even as they peruse your aisles.

71% of consumers desire to shop digitally. Source: IBM institute for Business Value.

From smart phones to computers to social networks and even television remotes, retail will continue to digitize as the vast majority desire to shop and to browse with an expanding number of technologies. In fact, 24% of the global population says they are willing to use three or more technologies when shopping.

Many retailers view this hyper-connected consumer with apprehension. But forward-thinking organizations will recognize and exploit the new channels of communication that have emerged through social and mobile. By becoming active participants in the conversation, retailers and brand owners can use the dialogue to identify new business opportunities, as well as learn more about the consumer.


Why trust matters

In this fragile market, it’s not enough to market to individuals. Retailers have to market to communities—what the IBM Institute for Business Value called "communities of we." And how well retailers and product brands identify the arbiters of taste to build trust with communities of like-minded consumers will determine whether they benefit from a base of loyal advocates... or are left to fend with more transient and fickle customers.

A new IBM Institute for Business Value survey of more than 28,000 global consumers confirms that, while consumers actively discuss, critique, promote, and even dismiss many brands, they are willing to give their loyalty to only a select few retailers.1


The growing trust gap. While the voices of the manufacturers and retailers are now louder, family and friends still rule when it comes to influence.


Consumers think the future is about them. They are right.

For customers to be loyal to you, you must be loyal to them

It´s not about catering to the growing use of technology. Instead, it is about winning consumers over by anticipating their behavior and preferences, and engaging with them on their terms. To accomplish this, retailers must take these steps:

Listen and learn.
Utilize analytics to gain a 360 degree view of the customer, spot trends before they emerge in the market and use social media to engage at a local level.

Anticipate and adapt.
Establish single view of the customer across channels, using consumer insights to localize assortment and personalize marketing, allowing store personnel to respond to local needs and support your customer’s path to purchase.

Execute and excel.
Make the most of marketing expenses with a mix of targeted advertising and segments, personalizing and tailoring your price and promotions and modifying processes; let the consumer be king.


1. Our survey was conducted in November 2011; it includes consumers in Australia, Argentina, Brazil, Canada, Chile, China, Colombia, France, Italy, Japan, Mexico Spain, South Africa, United Kingdom and United States.

2. Analytics: The New Path to Value. Joint study by the MIT Sloan Management Review and the IBM Institute for Business Value. Copyright © Massachusetts Institute of Technology, 2010.