Skip to main content

Smarter retail

From recognition to research to reviews, the consumer is in control.

In a marketplace of one, retailers must capitalise on the smarter consumer

Where commerce meets culture. Visit the interactive Smarter Retail experience.

In 2010, IBM Institute for Business Value surveyed 30,624 consumers in 13 countries (US)—six growth economies and seven mature economies—to learn what they really think when they shop.1 The story that unfolded is fascinating and complex. The smarter consumer wants to be known and served, not sold to.

What does the smarter consumer want from retailers?

  • Listen to me. Give me a forum to interact with you
  • Know me. Understand what I buy and what I value
  • Empower me. Allow me to use mobility to control the shopping experience.

Overall, shoppers are looking to connect with retailers they trust. But they don't turn to retailers for advice. For that, they rely on their networks. Technology allows consumers to influence each other as well as retailers and manufacturers. In our survey, 33% of consumers belong to a social network. Of those, 37% said they were influenced by external reviews and 75% of respondents casually participate every month by responding to posts or writing reviews.

The window of influence is shrinking. Consumers used to spend a day or so making a purchasing decision. Now, it’s down to a matter of hours. That means retailers have to work even harder to capture each purchase. But instead of working harder, we suggest retailers be smarter. And smarter retailing requires innovative business models that use real-time insights to meet customers’ changing demands and expectations.

The trust gap shows that consumers rely forty four percent on family and friends, twenty one percent on customer reviews, eighteen percent on retailers and manufacturers and sixteen percent on product experts. Source: IBM Institute for Business Value



Catalysts for change—and how retailers need to respond

Even before the economic downturn, three storms were gathering that now present themselves as immediate and unavoidable challenges for any retailer. But there are strategies that retailers can implement to transform them from obstacles to opportunities.

Responding as a smarter retailer involves listening to the customer,  making changes to the organisation and improving the shopping experience.

The catalyst: a smarter consumer
Nearly two billion people are now online, with that number expected to increase to 2.2 billion by 20132. Tech-savvy consumers have quickly learned to use these tools to research products, prices and availability; they are also tapping into broad social networks of consumers who share ratings, views, shopping experiences and other information.

The retailer's response: a smarter shopping experience
Ensure choice and convenience for your customers by providing a spectrum of touch points across all channels—and by integrating those touch points for easy, seamless movement from one to another. The benefits include enhanced customer loyalty, improved efficiency and increased sales.

The catalyst: changing buying habits
What you see is not always what you get with consumers. Today’s consumers are buying for more than their traditional household. 40% of consumers are regularly purchasing for family members who may not live within their traditional home. 19% of the global population now has adult parents, adult children or grandchildren leaving with them in the last 2 years.

The retailers’ reaction: listen and learn
As consumers purchase, tweet and blog, they are leaving behind a trail of data. With the help of advanced analytics, retailers can make the most of this data to understand—and predict—actual consumer buying behavior and transform into truly customer-centric enterprises.

The catalyst: emerging competition
Today, just about anyone can become a retailer, in just about any retail segment, from almost anywhere in the world. Many thousands of people now earn their living full time selling goods on auction sites such as eBay. Meanwhile, supermarkets routinely offer bank branches, while drug stores practice medicine and sell fishing licenses.

The retailer’s response: play up your strengths
Fortunately, retailers have unique resources that they can use to respond to this threat, including physical stores and trained personnel who can provide a personalised and relevant experience—something that few manufacturers, distributors, social networking sites or search engines can easily match. Retailers have the opportunity to be the lifestyle brand to their customers, building stronger relationships through offerings that are unique, relevant and meaningful.


Most retail processes today were built largely for the realities of another era, when products were manufactured in isolation and brought to market en masse from factory to truck to store, for consumers who did most of their shopping in physical stores. Today retailers must adapt to global supply networks, new ways and venues for selling—both physical and virtual—and a very different kind of customer.


1. Our survey was conducted in October 2010. It includes consumers in Australia, Argentina, Brazil, Canada, Chile, China, Colombia, France, Germany, Italy, Mexico, United Kingdom and United States.