Compete in the era

of SMARTER retail
2014
IBM Retail Solutions
Guide
Table
of contents
Foreword 4
Smarter Retail Imperatives 6
Smarter Shopping Experience 8
360º view of the customer 10
Connected marketing 12
Omni-channel commerce 14
Smarter Merchandising and Supply Networks 16
Omni-channel merchandising 18
Omni-channel supply networks 20
Smarter Operations 22
Back-office transformation 24
Retail infrastructure optimization 26
Performance insights and management 28
IBM’s commitment to the retail industry 30
2 3
Retailers recognize that the balance of power
has changed. Consumers are in charge.
Connected, informed and empowered through mobile technologies and
social media, today’s consumers expect an engaging, immediate and con-
sistent experience regardless of where and when they research, browse
and shop. These expectations and the accelerating pace of change—tech-
nological, cultural and in the marketplace—are prompting retailers to act
with urgency to add new capabilities and implement new strategies. Solu-
tions, enabled by big data and analytics and cloud technologies, deliver
these new capabilities and enable retailers with a smarter commerce strat-
egy to connect with and serve customers for competitive advantage.
To compete in the era of smarter retail and engage with customers in more
meaningful ways, forward-thinking enterprises are transforming—taking
advantage of the insights made possible through big data and analytics.
Traditional retail industry advantages of location, selection and conve-
nience are receding, giving way to the seamless convergence of the digital
and physical worlds.
IBM offers virtually everything retailers need to transform—road map develop-
ment, solutions, applications research, platforms and best practices—based
on what consumers are demanding. We help retailers extend brand value,
deepen customer relationships and offer differentiated assortment while driv-
ing operational excellence enterprisewide to spur profitable growth.
For retailers, it is crucial to carry out these three imperatives flawlessly:
• Deliver a smarter shopping experience
• Build smarter merchandising and supply networks
• Drive smarter operations
Implemented together, these imperatives enable smarter retail—a key to
connecting with consumers, operating efficiently and capturing loyalty to
gain market share and drive profitable growth.
This guide showcases IBM solutions for retail. It provides a quick overview
of what retailers need to do within each of these areas and of the IBM solu-
tions that can support those efforts.
Please contact your IBM representative to arrange for a briefing on any of
the IBM offerings in this solutions guide.
Sincerely,
Your IBM Global Retail Industry Team
Foreword
Smarter
commerce
Business has always been about
serving the customer. Today,
empowered by technology, cus-
tomers tend to be more informed,
connected and demanding than
ever before. They expect to
interact with companies when-
ever, wherever and however they
choose, with a simple, engaging
and seamless experience regard-
less of time, location and medium.
A smarter commerce strategy
begins by viewing the world
through the eyes of the customer.
It means recognizing that the cus-
tomer experience goes far beyond
the sale—to include interactions
before, during and after the pur-
chase. It puts the customer at the
heart of business operations and
uses customer insights to deliver a
deeply personalized and relevant
experience for each customer.
Through smarter commerce strat-
egies, businesses can address the
imperatives of retail to more effec-
tively deepen the brand relation-
ship with their customers with the
operational efficiencies required to
profitably deliver a consistent, dif-
ferentiating brand experience.
4 5
360° view of the customer
Connected marketing
Omni-channel commerce
DELIVER A SMARTER
SHOPPING EXPERIENCE
Omni-channel merchandising
Omni-channel supply networks
BUILD SMARTER
MERCHANDISING AND
SUPPLY NETWORKS
Back-office transformation
Retail infrastructure optimization
Performance insights and management
DRIVE SMARTER OPERATIONS
Introduction:
The IBM smarter retail
imperatives
Every retailer faces a unique business situation and brings a
unique set of resources and assets, strengths, and advantages to
the marketplace.
But we believe that there are universal imperatives that every
retailer must get right to compete—and win.
SMARTER RETAIL
IMPERATIVES
On the following pages, we examine these three smarter retail
imperatives and IBM’s offerings within each.
We call them the smarter retail imperatives. This guide describes these imper-
atives and organizes IBM’s offerings for the retail industry around them to show
how we help the world’s leading retailers achieve their business objectives.
6 7
SMARTER
SHOPPING EXPERIENCE
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
8
SMARTER
SHOPPING EXPERIENCE
9
Retailers that deliver a smarter shopping experi-
ence interact with consumers in ways that provide
each of them with a timely, relevant and personal-
ized experience.
What it takes to
deliver a smarter
shopping experience
Then, you have to approach customers with
messages and offers—at any point in time—that
reflect the fact that you really know them personally
and individually.
And finally, you have to deliver like clockwork—every
single time a customer interacts with you.
OMNI-CHANNEL
COMMERCE
First, you need a single, comprehensive picture of
individual customers—across virtually all
touchpoints—and the ability to turn that insight into
the best action for each consumer.
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
Turn the page to learn about the portfo-
lio of IBM solutions that enable a smarter
shopping experience.
To compete in the era of smart, you must strive to have your customers feel
as if you know them personally and that you have their current interests,
needs and wants in mind. This level of intimacy can elevate the retail brand
experience and ultimately create long-lasting and rewarding relationships
for you and your customers.
A smarter shopping experience must also be beyond the notion of sepa-
rate “channels”: customers should be able to interact with you in the store,
on the web, via mobile devices or through call centers—in an absolutely
seamless way—to connect and shop anywhere, anytime and anyhow.
What does it take to deliver a smarter shopping experience? A comprehensive
view of customers across virtually all touchpoints and a single commerce and
marketing platform for interaction and engagement.
IBM helps retailers make sense of big data by applying analytics to the data
generated through mobile and social technologies, allowing them to get to
know each customer as an individual. Using all the information that’s avail-
able—from new sources, structured and unstructured, inside and outside the
organization—it becomes possible to not only understand an individual’s his-
tory but also perceive each person’s interests and current lifestyle needs.
Do it in real time, and you can determine exactly what information, mes-
sage or offer to deliver to each consumer, right at the moment of aware-
ness. Do so consistently, and you can deepen the brand relationship and
motivate consumers directly toward purchase and greater loyalty.
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
8 9
SMARTER SHOPPING EXPERIENCE
SMARTER
SHOPPING EXPERIENCE
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT HOW WE DELIVER IT
POTENTIAL
BENEFITS
360º VIEW OF
THE CUSTOMER
Getting to know your customers, individually as well as by segment, and effectively
using that information to build solid relationships is a critical competitive issue. But
most retailers struggle with the problem of how to really make this happen.
The answer is now within reach. Inside physical stores, retailers can now collect data
previously only available in the digital world, including information and breadcrumbs
from customers’ browsing behavior, and shed new light on consumer patterns. Col-
lecting and analyzing this information and combining it with customer interaction his-
tory, online behavior and external data provides valuable insight—revealing individual
preferences, buying behaviors and even the current activities, wants and needs of
each consumer at virtually any point in time. This is what we call a 360° view of the
customer. Converting such insights into action can make you stand out to shoppers
in the competitive marketplace.
But this can’t be achieved with just a single system or process. You have to collect as
many pieces of available information as you can, from inside and outside your orga-
nization, and then use that information to drive insight and power your customer
interactions.
Big data and analytics to gain insight from new sources information
Capture new sources of data frominside and outside of the organization and apply advanced analytics to gain insight into behavioral drivers so you
can further personalize shopping to spur better loyalty, sales and margins.
Information on each customer’s activities
and interactions with others—a customer
activity repository
Learn about customers’ online interac-
tions with others, including friends, family,
other retailers, brands and groups—com-
ments, reviews, likes, dislikes, compli-
ments and complaints.
Visibility into each customer’s
transactions and interactions
with you as a retailer—a customer
transaction repository
This includes visibility across channels and
activities: what customers have bought;
where, when and how they’ve shopped;
who they’ve contacted; and what market-
ing they respond to.
Insight to understand each of your
customers as an individual—a customer
master hub
This includes information on who your cus-
tomers are; where they live; and their demo-
graphics, interests, activities, attributes and
preferences—all stored in one place.
Customer
master hub
Customer
activity
repository
Customer
transaction
repository
Data from:
– Social media
– Blogs
– Ratings/reviews
– Complaints/comments
– Surveys
– Employee comments
– Location awareness/services
Personal data from:
– Customer registration
– Marketing
– Householding
HISTORICAL AND
REAL-TIME
ANALYTICS
to gain insights into
preferences, propensities,
current activities
and interests
Transactional data from:
– Stores
– Online
– Mobile
– Call centers
– Kiosks
External data:
– Demographics
– Weather
– Census
Increased sales
Increased margins
Improved satisfaction
and loyalty
The set of capabilities we refer to as the
360° view of the customer can be achieved
via a number of architectures, but it requires
close integration of processes, systems
and organization.
First is the establishment of an advanced
customer master hub using IBM Initiate
®

Master Data Management Collaborative Edi-
tion software to get a single, consistent view
of each customer’s information across pro-
file, preferences and other attributes. A key
goal here is to establish a process to manage
attributes, identify the most important pieces
of information and define howto make critical
information available to every system and
process that needs it, in real time.
The next piece is an advanced customer
transaction repository. The goal here is to
pull together available data on sales across
channels and then combine this data with
information on other customer activities.
These can include visits to your stores and
contacts with your store associates and call
centers as well as online shopping and
mobile marketing to establish a comprehen-
sive view of each individual’s buying habits
and interactions.
For this purpose, IBM Big Data & Analytics
solutions provide incredible power to man-
age and sift through vast quantities of cus-
tomer transaction data at record speeds as
well as the ability to distribute this information
throughout the organization. IBM SPSS
®

software brings powerful statistical modeling
capabilities to help predict customer behav-
ior with greater accuracy and drive insights.
To complete the picture, we build an advanced
customer activity repository using social
media analytics solutions fromIBMto capture
customer interactions and activities with third
parties, including blog entries, emails, posts
and comments on social media, ratings,
reviews, complaints, and website analysis.
This customer activity repository can help
drive your understanding of customer senti-
ments, help identify influencers, pinpoint
customer satisfaction opportunities, and even
monitor your brand reputation and trust level
with consumers, all of which can help you
become essential to your customers.
Central to all these breakthrough capabilities
is being able to process vast volumes of data
far more quickly than ever before, apply ana-
lytics and act in real time. By bringing together
social, mobile, big data analytics and cloud
technologies, IBM has the power to help you
change the game.
More information on each of these offerings is available on the ibm.com
®
website. Contact your IBM representative to arrange a briefing.
Software solutions
• IBM Initiate Master Data Management
for customers and products
• IBM SPSS
• IBM Cognos
®
Business Intelligence
• Social media analytics solutions
Process improvement and
implementation services
• Implementation of Initiate Master Data
Management software for products
and customers
• Customer and product lifecycle
management
• Customer segmentation
• Advanced analytics and recommended
next best actions
Managed services
• Marketing and consumer analytics
• IBM Analytic Answers
Technology platforms
• Advanced analytics on IBM Power Sys-
tems

and IBM System z
®
hardware
• IBM PureData

Systemfor Analytics,
powered by IBM Netezza
®
technology
This major international eyewear retailer
used the IBM PureData Solution for Cus-
tomer Insight to establish a 360º view of
customers and gain actionable customer
insight for marketing activities.
• Anticipates a 10 percent improvement in
marketing effectiveness
• Identifies the highest-value customers
out of nearly 100 million
• Targets individual customers based on
unique preferences and histories
This London-based clothier with a major
online presence gained an understanding
of which fashions are a hit and which are a
miss when it used a behavior analysis tool
that provided detailed insights into how
consumers navigate the clothier’s site.
• Increased by 160 percent the number of
trouser orders after a microsite launch
• Increased by 11 percent the average
weekly number of trousers sold online
compared to other channels
• Increased customer loyalty and
repeat visits
This European photo service implemented
IBM SPSS software to segment its cus-
tomer base and more accurately target its
marketing efforts.
• Increased sales 30 percent in one year,
compared to an increase of only 10 per-
cent for competitors
• Increased the number of new prospects
taking advantage of a welcome offer by
16 percent
• Increased customer loyalty, with unsub-
scribe rates falling to 0.6 percent
LUXOTTICA BODEN AN ONLINE PHOTO SERVICE
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
10 11
360° VIEW OF
THE CUSTOMER
SMARTER
SHOPPING EXPERIENCE
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT
POTENTIAL
BENEFITS
To deliver a consistent brand experience that’s timely, relevant and personalized
to each customer, you have to find ways to connect the dots between advertising,
marketing and merchandising. Making this happen requires a deep understanding of
each individual customer as well as great precision in defining offers and targeting
communications at the right point in time via the right medium—digital, short mes-
sage service (SMS), email, in-store or print—to those consumers who will find the
offers motivating and worth acting on.
Success here is measured in the ability to understand and influence customer behav-
ior, drive dramatically higher return on marketing spend, increase sales and improve
customer satisfaction.
CONNECTED
MARKETING
Advanced analytics that draw widely from available customer data
to define offers that will be most appealing to specific consumers
Retailers must leverage a vast array of available historical and real-time internal and external data to understand each customer as an individual and to
determine the best action for a given time and place.
Campaign execution processes that
leverage customer insights to
communicate offers in a personalized
way to each consumer
Marketing campaigns must no longer be exer-
cises in broadcasting. They must be carefully
targeted to reach individual consumers with
personalized offers, based on history, behav-
ioral drivers and current lifestyle needs, to
drive shoppers to take the desired action.
Campaign planning processes that
are tightly interconnected with
merchandising
There is a critical need to integrate the
processes by which retailers select mer-
chandise and appropriate offers with the
processes by which they define effective
marketing campaigns for this merchandise.
Marketing operations that can help ensure
that campaigns and promotions are
executed as planned
Dependable processes can translate mar-
keting strategy into an integrated, coherent
marketing plan and manage plan execution
to deliver a consistent brand message in
virtually every consumer interaction and
communication.
Improved conversion
rates
Improved customer
loyalty
Increased return on
marketing investment Advanced
analytics
Campaign
planning
Campaign
execution
Marketing
operations
INTERACTIONS
that are timely, relevant
and personalized
– Contact frequency
– Offer optimization
– Channel optimization
– Interaction sequence
– Store
– Web
– Mobile
– Social
– Kiosk
– Call center
– Email
– Print
– Marketing strategy,
budget and plans
– Master calendar
– Manage and track spend
– Campaign and promotion plans
– Marketing mix optimization
– Price optimization
– Promotion optimization
– Customer behavioral
and transactional history
– Customer segmentation
Making connected marketing a reality requires
attention to each of the defined elements.
The first puzzle piece here is an advanced
marketing operations systembased on IBM
Enterprise Marketing Management. This sys-
temcan act as the central hub to let you use
the customer data collected across virtually all
touchpoints and turn it into insights through
your analytics solutions. Armed with insights,
you can define highly effective marketing
campaigns and optimize execution by stream-
lining internal processes to deliver advertising
and marketing efforts on time and in sync with
real-time customer demand.
The next requirement is cross-channel
campaign planning based on IBM Enter-
prise Marketing Management and IBM
DemandTec
®
software. This enables execu-
tion of personalized offers to individual cus-
tomers and can optimize how you connect
with your customers via different touch-
points. Promotions can quickly be turned
into emails, for example, and campaigns can
be pushed to call center associates to make
outbound marketing calls. The increase in
mobile shopping means that you need to
take special efforts to connect with con-
sumers to improve online sales, drive
in-store traffic and engage shoppers with
personalized offers.
For campaign execution, today’s market-
place requires the ability to engage the cus-
tomer in a continual interactive dialogue. IBM
Enterprise Marketing Management and
DemandTec software and IBM Digital Mar-
keting Optimization solutions can allow you
to influence the path to purchase via a num-
ber of methods, such as display ads that
reflect previous browsing history and product
recommendations to catch the shopper’s
eye at just the right moment. In addition, IBM
Customer Experience Management can
highlight additional opportunities in your digi-
tal channels, such as cart abandonment as a
result of issues in the website experience.
Customer Experience Management can pro-
vide critical visibility, insight and answers to
help companies meet online conversion and
customer retention objectives. In an inte-
grated marketing management environment,
this feedback can loop back from campaign
execution to campaign planning to harvest
learning and intelligence.
The linchpin that ties all this together is
advanced analytics with IBMSPSS soft-
ware. SPSS software is designed to harvest
the latest insights into customer likes, interests
and preferences, based on their responses to
your current offers, to allowyou to connect in
real time to deliver the most relevant and
timely offers to individual shoppers. Analytics
software can also allowyou to close the loop
on the marketing process cycle by providing
the data for optimizing your marketing budget
with visibility into planned and in-progress
marketing activities.
To stand out in marketing today, relevance
and personalization are key. IBM offers a
comprehensive spectrum of capabilities
that can bring this to life.
METRO SYSTEMS replaced mass mail-
ings with electronic delivery of digital cou-
pons that could be activated online or in
the store, helping the retailer segment by
customer demographics and preferences.
• Provides nearly instantaneous coupon
validation, speeding the checkout process
• Enables targeting of particular cus-
tomers and costs less than traditional,
paper-based couponing campaigns
• Enables usage for multiple other cou-
poning use cases such as gift cards and
return deposits on empties
This department store chain implemented
IBM Enterprise Marketing Management
and IBM Digital Marketing Optimization to
draw more visitors to its website.
• Gained a better understanding of each
shopper’s interests to offer personalized
discounts and product recommendations
• Improved email click-through rates by
68 percent
• Increased click-through rates for banner
ads by 500 percent
• Increased the sales-per-send ratio for
marketing emails by 271 percent
Speedo improved its understanding of how
shoppers use search functions for research
and shopping using IBMCoremetrics and
IBMDigital Analytics.
• Improved search through analytics
• Uncovered new opportunities
• Gained insight into return on ad spend
(ROAS)
METRO SYSTEMS GMBH WEHKAMP.NL SPEEDO
Software solutions
• IBM Enterprise Marketing
Management
• IBM DemandTec
• IBM Digital Marketing Optimization
• IBM Customer Experience
Management
• IBM SPSS
• IBM Xtify
Process improvement and
implementation services
• Customer relationship management
(CRM) capabilities assessment and
road map
• Promotion strategy and optimization
• Customer experience management
• Marketing return on investment (ROI)
improvement
• Next best action optimizer
• Customer segmentation
Managed services
• Marketing and consumer analytics
Technology platforms
• IBMEnterprise Marketing Management on
IBMPower Systems
• IBM SmartCloud
®
Enterprise+, Softlayer
®
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
12 13
CONNECTED
MARKETING
SMARTER
SHOPPING EXPERIENCE
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT
POTENTIAL
BENEFITS
Omni-channel commerce is our term for the set of capabilities that enables inter-
action with your customers seamlessly across virtually all touchpoints. The idea is
to bring together the rich capabilities of mobile, social and cloud to execute trans-
actions and flexibly source and fulfill customer orders. Doing so enables a differen-
tiated brand experience designed to allow your customers to research, buy, track,
receive and return purchases wherever, whenever and however they please.
At the same time, omni-channel commerce solutions from IBM can leverage improved
inventory visibility and rich analytics capabilities to help maximize retail operational
efficiencies: each customer order can be automatically executed via the most efficient
location, sources and fulfillment paths, based on costs and conditions, to help make
every sale as profitable as possible for you.
OMNI-CHANNEL
COMMERCE
Advanced digital analytics to ceaselessly
monitor your customers’ changing activi-
ties and responses to enable quick learn-
ing and identify the next paths to success
The key here is to enable a learning cycle
that keeps you a step ahead of your com-
petition in identifying trends and spotting
emerging opportunities, crafting timely
new offers, and delivering themefficiently,
especially to increasingly powerful mobile
devices. The secret to driving profitable
growth is making your customers feel like
you know themand understand themfar
better than any other retailer does.
Order management processes that help
fulfill each customer order via the most
efficient and cost-effective path
The complexity of modern supply chains can
mask potential cost savings and opportuni-
ties for faster fulfillment. Your order manage-
ment process must take advantage of new
insights and capabilities to drive fast, cost-
efficient execution that can increase cus-
tomer satisfaction—and your profitability.
A single digital engine for commerce
capabilities to handle virtually all customer
interactions with world-class efficiency
and flexibility
Your customers must feel that their shopping
experiences are seamless, simple, engag-
ing and confidence inspiring. As they move
among channels and touchpoints, and as
they go frombrowsing to purchase and then
to after-purchase interactions, they must
sense at every moment that they can count
on you to be consistent, competent and
trustworthy in every interaction—and their
history and interactions go with themregard-
less of where or when they connect with you.
Reduced customer
acquisition cost
Improved order
accuracy
Improved customer
satisfaction
Distributed order
management
Customer
experience
management
Digital
analytics
Commerce
– Inventory sourcing, flexible
fulfillment and value-added
services regardless of order
channel or changes
– Universal inventory visibility,
including store associates
– Dynamic personalization
– Search and navigation
– Extended sites
– A/B testing
– Rule-based associations
– Internationalization and global commerce
– Mobile
– Payments
– Visibility into the actual customer experience
– Quickly diagnose and resolve site obstacles
CAPABILITIES
to enable smooth
interaction with customers
across touchpoints
while improving
operational efficiencies
– Search engine optimization
– Impression attribution
– Benchmarking
– Product recommendations
– Display advertising
– Session replay
Omni-channel commerce is about having
universal visibility into inventory and custom-
ers across virtually all touchpoints. IBM’s
approach to omni-channel commerce is
balanced to coordinate shopping, insight,
inventory management and fulfillment to
offer a personalized and outstanding shop-
ping experience.
We begin with an advanced single digital
engine for e-commerce and mobile capa-
bilities based on IBM WebSphere
®
Com-
merce software. Our solution is distinctive in
that it can support business-to-consumer
(B2C) and business-to-business (B2B) mod-
els equally well. IBM WebSphere Commerce
software can also confidently support global
retailers with multibrand, multicountry require-
ments using an integrated, uniform design
that can be easily accessed on a variety of
mobile devices.
The next critical element is world-class cus-
tomer order management and fulfillment
capabilities delivered by a distributed order
management systembased on IBMSterling
Distributed Order Management. Order man-
agement orchestrates each order to take
advantage of the most beneficial inventory
sourcing and flexible fulfillment paths. It is
designed to enable continuous global visibility
into orders, regardless of channel, and any
order changes that may take place. Sterling
also supports vendor-direct fulfillment and a
wide variety of value-added services, includ-
ing assembly, service delivery and installation.
And Sterling supports functionality via a dedi-
cated application for mobile devices, equip-
ping store associates for mobile picking of
in-store fulfillment and inventory visibility for
items not in the store.
Opt-in intelligent location awareness technol-
ogies, such as IBMPresence Zones, give you
newinsight into customer behavior in stores.
This newsource of insight combines data on
store visits, dwell time, and sales and traffic
patterns with online activities to give a more
complete picture of shoppers. This allows you
to connect activities across channels to help
drive store revenue, improve customer loyalty
and differentiate the brand.
To complete the picture, we enable sophisti-
cated advanced digital analytics capabili-
ties based on IBM Digital Analytics
Benchmark software, which allows you to
detect howcustomers are reacting to your
personalized targeting. These insights help
establish a learning feedback loop to drive
continual improvement in your e-commerce
and order fulfillment processes.
Given the growth in mobile sales, efficiently
connecting to customers’ personal devices is
key. The IBMMobileFirst platformis designed
to let you build once and deploy to multiple
mobile platforms, including mobile applica-
tions for store associates and other employ-
ees, in ways that can be managed more
securely to better serve customers.
Omni-channel commerce solutions from
IBMare designed to work smoothly in concert
with our other solutions, particularly 360° view
of the customer and connected marketing,
to provide a single, digital backbone for con-
sumer interactions. The goal is to let your cus-
tomers place their orders via web, mobile,
tablet—wherever they like—and to select from
among value-added services. In addition, your
mobile-enabled store associates can more
easily check on and deliver inventory and cus-
tomer orders, while your call center represen-
tatives can quickly make order changes.
IBMtechnologies are designed to work seam-
lessly together to deliver a truly superior shop-
ping experience that can drive customer
loyalty and help you outclass the competition.
Technology platforms
• IBM WebSphere Commerce on
Power Systems
• IBMSterling Distributed Order
Management on Power Systems
Managed services
• Commerce as a service (WebSphere
Commerce and Sterling Distributed
Order Management)
• Payment systems
• Marketing and consumer analytics
Process improvement and
implementation services
• Cross-channel strategy
• Next-generation e-commerce
• Cross-channel order management
• Customer web experience design
Software solutions
• IBMWebSphere Commerce
• IBMSterling Distributed Order
Management
• IBMDigital Analytics Benchmark
• IBMMobileFirst
• IBMPresence Zones
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
This Canadian retailer implemented IBM
WebSphere Commerce and IBM Digital
Analytics Benchmark software to handle
rapid growth and to provide insights into
shopper behavior.
• Helped track and target online shop-
pers, boosting customer acquisition and
repeat business
• Increased customer loyalty by provid-
ing a richer shopping experience, with
customer-generated product ratings
and reviews and integration with social
media
AN ONLINE RETAILER CABELA’S A LARGE DEPARTMENT STORE
This leading retailer of outdoor goods
implemented IBM Sterling Distributed
Order Management to coordinate fulfill-
ment across channels.
• Improved inventory accuracy while
reducing inventory handling and related
labor costs
• Streamlined the opening of new stores
• Increased customer satisfaction by
ensuring higher service levels across
touchpoints, including store, web and
catalog
By implementing a powerful e-commerce
solution comprising IBM WebSphere
Commerce and IBMEnterprise Marketing
Management software, this U.S.-based
department store increased online sales
while improving the overall user experience
of its website.
• Improved overall business efficiency with
increased on-time delivery rates and cus-
tomer satisfaction
• Simplified communication and collabora-
tion enterprisewide
• Increased productivity and profitability
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
14 15
OMNI-CHANNEL
COMMERCE
16
SMARTER MERCHANDISING AND
SUPPLY NETWORKS
17
Although merchandising is often viewed as an art,
new technologies can add science to merchandis-
ing processes by helping retailers quickly identify
shifting trends and consumer sentiments and by
helping buyers make the right choices in response.
Traditionally, success in retail was determined by placing the right merchan-
dise in the right store locations at the right time at the right prices. Even with
all the changes and complications in today’s world, this vital role of bringing
together products and consumers remains as critical as ever.
But this requires more than just effective preseason assortment planning
and in-season management. It requires a fundamental rebalancing of the
attention paid to product versus the attention paid to the consumer so as to
achieve better results in planning, pricing and business outcomes.
With regard to products, the key is to approach this with a view to the full
offering you define: where you offer specific items and what placement,
information and context you provide around each product in alignment with
the perennial factors of price and timing.
At the same time, the processes that carry merchandise from suppliers to
stores and customers must take advantage of the latest supply chain
optimization tools to drive the highest-possible efficiency, transparency
and accountability.
And the management of products must be continually informed by a real-time
awareness of the consumer dimension—what consumers are saying to each
other, how their behavior is changing every day—using leading technologies
that leverage social media, mobile, big data analytics and cloud.
What it takes to build
smarter merchandising
and supply networks
First, you need to be able to accurately anticipate customer
needs and carry a differentiated and compelling product
assortment. You must have the right pricing and promotional
strategies across the preferred channels to drive demand and
meet financial goals while being responsive to the latest intelli-
gence on consumer sentiment and behavior.
Then, you need to establish real-time visibility to inventories
while optimizing your planning processes so as to create a sup-
ply network that can provide dependable delivery against
changing demand while also maximizing inventory productivity.
OMNI-CHANNEL SUPPLY
NETWORKS
OMNI-CHANNEL
MERCHANDISING
Turn the page to learn about the portfolio of
IBM solutions that enable smarter merchan-
dising and supply networks.
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
16 17
SMARTER MERCHANDISING AND SUPPLY NETWORKS
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
SMARTER MERCHANDISING AND
SUPPLY NETWORKS
POTENTIAL
BENEFITS
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT HOW WE DELIVER IT Product assortment and pricing are central to every retailer’s brand. In an increas-
ingly competitive marketplace, merchants struggle to create a unique set of prod-
ucts with shorter lifecycles and constant promotions across multiple geographies
and customer touchpoints—all to appeal to an increasingly empowered consumer.
But today’s consumer-insight-based planning and analytical solutions are making it
possible to blend art—experience, taste and judgment—with science—advanced
analytics around buying propensity and the drivers of demand—to reliably deter-
mine the most desirable and profitable products, touchpoints, locations, events
and promotions.
OMNI-CHANNEL
MERCHANDISING
Integrated merchandise visibility and control, focused to improve accuracy and speed of merchandising decisions and actions
• Provides transparency to the drivers of current performance, future consumer demand and your business objectives, including trends as they emerge
through social media
• Uses role-based graphics, exception alerts and what-if scenarios to drive increased productivity
• Integrates planning, decision support analytics and execution systems
Optimized price and promotions aligned
to brand messaging and financial goals
• Coordinates merchandising strategies with
personalized marketing offers
• Incorporates competitor positioning
• Collaborates on variations in promotional
offers across different media
• Offers visibility into the operational effect
of price changes across the category and
enterprise
Tailored assortments that match the right
products with the right locations to provide
what your customers want to buy
• Creates demand forecasts that are based on
insights into the key drivers of buying behavior
for targeted customers, channels, locations
and product categories
• Aligns product lifecycles and balances the
mix of private-label and branded products
• Optimizes merchandise quantities and inven-
tories for space and financial objectives
Enterprise product information leveraged
to drive competitive advantage
• Is enabled by cross-functional workflows
to manage a single, comprehensive view of
product, supplier and location attributes
• Incorporates validated external and internal
data sources for accuracy and speed
• Provides seamless integration of attribute
data to analytical, operational and customer-
facing applications
OPTIMIZED PRICE
AND PROMOTIONS
TAILORED
ASSORTMENTS
Product development
ENTERPRISE
PRODUCT
INFORMATION
CUSTOMER
INSIGHT
SOCIAL
TRENDS
Space, allocation
and replenishment
Integrated merchandise
visibility and control
Core
merchandising
Increased sales
Improved gross
margin
Improved inventory
turnover
Each retailer’s journey to enabling new mer-
chandising capabilities will be unique, depend-
ing on starting point, goals and resources.
Strategy and implementation services from
IBMare a key to our offerings here. The goal is
to help ensure the successful implementation
of IBM solutions as well as solutions from
third-party providers such as Oracle, SAP
and JDA Software.
It all starts with accurate enterprise prod-
uct attribute information. IBM InfoSphere
®

Master Data Management Collaborative
Edition software allows for the gradual roll-
out of channel-to-enterprise product attri-
butes with a supplier portal, cross-functional
workflow, and integration into core mer-
chandising and customer-facing systems
such as WebSphere Commerce software.
IBMSPSS software provides advanced cus-
tomer analytics to identify the factors beyond
point-of-sale (POS) data that drive buying
behavior and that predict future behavior at
the SKU, category, cluster and location levels
so you can tailor assortments. IBMCognos
TM1
®
software is designed to enable the cre-
ation and management of top-down and
bottom-up financial and assortment plans
across channels, at all levels, fromcorporate-
wide to individual SKUs, locations and time
periods. IBM DemandTec software is
designed to recommend assortments that
are ideally suited for specific locations while
at the same time taking into account financial
goals and constraints such as space. The
resulting demand forecasts and assortment
recommendations can be exported to virtu-
ally any planning or execution application.
After assortments have been established,
you need to develop effective pricing
strategies and manage the price lifecycle.
IBM DemandTec software can manage
pricing across the lifecycle of each product
and can coordinate promotional events and
personalized marketing offers. Optimal prod-
uct prices are determined based on user-
defined objectives, with business users being
able to schedule and manage the number
and type of price and promotion changes.
Throughout the various seasons, you need
comprehensive merchandise visibility to
control stock levels. IBM Big Data & Ana-
lytics capabilities provide exception-based,
graphical, multilevel comparisons of plans,
forecasts and history so merchants can
more clearly understand and efficiently
manage performance.
IBM can deliver on the complex integration
requirements across these capabilities with
our best-in-class integration solutions based
on IBM WebSphere integration software.
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
This retailer for outdoor enthusiasts lever-
ages analytics to monitor and forecast
global inventory in detail.
• More-efficient budgeting
• Improved merchandising and supply
analysis and planning
• More-detailed inventory planning, includ-
ing styles and colors of products as well
as by geographic region
This large chain implemented IBM SPSS
software to tailor assortments more accu-
rately by complementing category man-
ager experience with advanced analytics.
• Used data on the vehicle population in
a given area as well as the incidence of
repairs and related parts usage to fore-
cast demand
• Delivered 30 percent greater accuracy
in inventory placement across its supply
chain
• Significantly reduced the time required
for assortment planning
This Parisian retailer of prescription eye-
wear uses predictive analytics to know
what styles are hottest to adjust inventory
and in-store strategies.
• Increased profitability as a result of
tighter inventory control and higher
per-product margins
• Improved customer satisfaction and
up-sell opportunities
• Lowered costs of product development
and marketing campaigns
PATAGONIA AN AUTO PARTS RETAILER ALAIN AFFLELOU
19
Technology platforms
• Core merchandising on Power Systems
and IBM PureApplication
®
System
• IBM PureData Systemfor Analytics
Managed services
• Application management services
for Oracle and SAP
• Core merchandising systems on
private clouds
Process improvement and
implementation services
• Merchandise operations strategy
• Core merchandise management
• Master data management (product
information management)
• Price and revenue strategy
• Integrated merchandise planning
• Advanced analytics for merchandising
• Cross-channel marketplace portal
• Price, promotions and assortment
optimization
Software solutions
• IBM Cognos (Business Intelligence
and TM1)
• IBM InfoSphere Master Data
Management Collaborative Edition
• IBM SPSS
• IBM DemandTec
• IBM WebSphere integration
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
18 19
OMNI-CHANNEL
MERCHANDISING
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
SMARTER MERCHANDISING AND
SUPPLY NETWORKS
POTENTIAL
BENEFITS
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT With consumers now expecting to be able to buy, receive and return practically any-
where, traditional channel-specific warehouse, allocation and replenishment pro-
cesses may no longer fulfill demand efficiently. In today’s omni-channel environment,
supply chain managers can no longer rely on a standard set of simple order-flow
methods for moving products from source to consumer. Front-office and back-office
processes must be connected to enable true “anytime, anywhere” commerce.
Deepening the brand relationship requires delivering a consistent brand message of
product availability at an appealing price. Leading retailers are driving agility across
the supply chain ecosystem by investing in a number of improvements that can drive
significant value for retailers and consumers.
OMNI-CHANNEL
SUPPLY NETWORKS
Sourcing and supplier collaboration
• Manages the global integration of bid sourcing and international inbound logistics
• Automates the flow of information with suppliers and with other supply network partners
• Manages contracts and performance agreements
Omni-channel distribution and fulfillment
• Enables efficient, dual-purpose store and
customer-order distribution facilities
• Manages inbound and outbound logistics
operations networks
• Streamlines the coordination of customer
order, fulfillment and return processes
Near-real-time inventory visibility
• Provides inventory visibility, purchase and
customer order status and available-to-
promise across channels
• Enables the timely matching of supply
to demand with a near-real-time viewof
planned, actual and forecast consumer
demand and inventory levels
• Enables product-specific, event-level
tracking
Optimized inventory planning
• Offers demand forecasting based on insight
into the drivers of buying behavior for each
channel, location and product category
• Enables multiobjective, multiechelon scenario
modeling
• Optimizes supply and distribution
networks, transportation routing, product
flow, service, and safety-stock levels
Reduced operating
costs
Faster delivery times
Improved product
availability
SOURCING
AND SUPPLIER
COLLABORATION
OMNI-CHANNEL
DISTRIBUTION AND
FULFILLMENT
OPTIMIZED
INVENTORY
PLANNING
Near-real-time
inventory visibility
Replenishment and allocation
Transportation
management
Product development
Warehouse
management
As with merchandising capabilities, each
retailer’s journey to enabling newsupply chain
capabilities will be unique and will depend on
starting point, goals and resources. Strategy
and implementation services fromIBMare key
to our offerings here. The goal remains to help
ensure the successful implementation of IBM
solutions as well as solutions fromthird-party
providers such as Oracle, SAP, Manhattan
Associates and JDA Software.
To optimize inventory planning, you need to
detect what factors beyond POS data drive
buying behavior and predict future behavior
at the SKU-location level. IBM SPSS soft-
ware can provide this advanced customer
analytics. And IBM Decision Optimization
supply chain optimization applications use
multiple variables, user-defined weightings,
scenario modeling and optimization analytics
to provide new insight into distribution net-
works, sourcing strategies, transportation
routing, inventory levels and source-to-con-
sumer flowactivities. These insights help drive
performance improvements that align with
changing demand patterns.
IBMCognos Business Intelligence and IBM
PureData Systemfor Analytics powered by
Netezza software can enable exception-
based, graphical, multilevel comparisons of
plans, current state, forecasts and history so
you have near-real-time inventory visibility
for decision making. IBM Sterling Supply
Chain Visibility provides a comprehensive
viewof your inbound supply and outbound
fulfillment activity across your supply net-
work by providing and leveraging “anywhere,
anytime” connectivity to your trading part-
ners and enterprise applications.
Coordinating customer order fulfillment pro-
cesses across your enterprise and network of
suppliers is key to offering true omni-channel
distribution and fulfillment for customers.
IBMSterling Order Management is designed
to enable rules-based inventory sourcing, flex-
ible fulfillment paths and continuous global
visibility into all orders, regardless of what
channels they are flowing through or what
order changes may take place.
The final core competency is sourcing and
supplier collaboration. IBM Sterling B2B
Integration is designed to provide visibility
into the data and automate the complete
“buy-sell-ship-pay” business process that
involves a range of documents shared with
trading partners, such as suppliers, banks
and third-party logistics companies.
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
Managed services
• Application management services
for Oracle and SAP
• Core merchandising systems on
private clouds
Technology platforms
• Warehouse and transportation applica-
tions on IBMPower Systems and PureAp-
plication System
Process improvement and
implementation services
• Supply chain planning and execution
• Sourcing and procurement
• Supply chain analytics
• IBMWebSphere integration software
• IBMCognos Business Intelligence
• IBMSPSS
• IBM PureData Systemfor Analytics
powered by Netezza software
• IBMSterling (Transportation Manage-
ment System, Order Management, Sup-
ply Chain Visibility and B2B Integration)
• IBMDecision Optimization supply
chain optimization
• IBMDemandTec trade fund
management
• IBMWebSphere supplier portal
Software solutions
This fashion retailer implemented IBM
Cognos TM1 and SPSS software to gain
real-time insights to improve supply–
demand matching.
• Enabled extrapolation of historical sales
patterns to predict customers’ future
demand for each product, down to size
and color
• Increased sales, improved order fill rates
and reduced supply chain costs
This global mass merchant implemented
IBM Decision Optimization software to
apply optimization analytics to its order
and distribution processes.
• Gained the ability to build optimal
purchase orders by evaluating many
variables such as store-level demand
forecasts, supplier information, sched-
ules and stock levels
• Enabled distinct business requirements in
several geographies for worldwide rollout
• Improved stock availability and opera-
tional efficiency
One of the largest toy businesses in the
northern European marketplace imple-
mented IBM Cognos Business Intelligence
software to improve its inventory forecast-
ing and align its orders to predicted cus-
tomer demand.
• Automated category reporting, saving
category managers one day each month
• Combined data from forecasting and
enterprise resource planning (ERP) sys-
tems to buy the right amounts of the right
products
• Provided newinsight into howstore layout
affects sales
TOP-TOY A LARGE DISCOUNTER ELIE TAHARI
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
20 21
OMNI-CHANNEL
SUPPLY NETWORKS
22
SMARTER
OPERATIONS
23
Smarter operations encompasses a range of
improvements that are designed to streamline
back-office processes; take advantage of reduced-
cost delivery models; optimize people, process and
system capabilities at the store and enterprise
level; and establish much better visibility into
organizational performance.
A host of new options are now available to retailers that need to consider ways
to reduce the cost of many back-office processes, including finance, adminis-
tration, HR, recruitment, nonmerchandise procurement and real estate man-
agement. By leveraging global delivery models and the high-quality execution
available through managed services, the cost savings can be startling.
IT is another area in which recent advances have opened the door to effi-
ciencies that were previously out of reach. New technology platforms such
as cloud and mobile offer ways to deploy new applications and functional-
ities far more quickly and cost-effectively to employees, stores and part-
ners, while advanced analytics can dramatically improve the efficiency of
application portfolio management. In fact, cloud-based approaches can be
a vital differentiator to help retailers cut IT costs, make IT much more flexi-
ble and robust, and enable a wide range of critical business innovations
that would otherwise be impractical.
Likewise, the latest offerings in performance measurement and reporting
can drive critical advances in the establishment of transparency across
functions, timeliness of reporting, and the ability to align metrics and incen-
tives to drive cross-organizational coordination, planning measurement,
accountability and performance.
Finally, you must establish leading-edge planning,
analytics and reporting to give you an edge in serving
customers and to uncover new ways to drive value
from investments and operations.
Then, you must ensure that you are using the
highest-quality, lowest-cost infrastructure to
support your business processes, leveraging
new cloud capabilities.
First, you should reconsider how each of your support
functions is performed, taking advantage of the state-
of-the-art options now available to leverage lower-
cost, higher-productivity tools and resources.
PERFORMANCE INSIGHTS
AND MANAGEMENT
RETAIL INFRASTRUCTURE
OPTIMIZATION
BACK-OFFICE
TRANSFORMATION
Turn the page to learn about the portfolio of
IBM solutions that enable smarter operations.
What it takes to drive
smarter operations
Cloud computing
With access to technology and information at their fingertips, consumers are increasingly empowered. Many
consumers expect retailers to understand their desires and provide offers that are relevant, timely and per-
sonalized and to interact via consumers’ preferred methods—anytime and anywhere.
With cloud computing, retailers can shift processing instantly as demand dictates, reduce costs through
built-in automation capabilities and improve uptime. This can help retailers cut IT costs; make IT much
more flexible, agile and robust; and—most important—enable a wide range of critical business innova-
tions that help meet demand and create competitive advantage.
Security
The current environment is putting newdemands on security operations to anticipate and respond
to an increase in attack frequency and sophistication. IBMunderstands the threat environment and
how to respond through a network of global security optimization centers (SOCs). Our security
operations optimization consulting offerings help retailers with the design and ongoing admin-
istration of a SOCthat addresses the evolving business needs for threat management while helping
meet budget requirements.
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
22 23
SMARTER OPERATIONS
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
SMARTER
OPERATIONS
POTENTIAL
BENEFITS CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT Retailers are always under pressure to improve operational efficiency, reduce costs
and increase productivity at the store and enterprise levels. Back-office processes
can be one of the most fruitful areas to look for savings.
Our vision for back-office transformation leverages advances in cloud, social and
mobile technologies to streamline and transform back-office operational capabil-
ities to help retailers manage their relationships with customers, employees and
suppliers more effectively while also improving visibility into organizational perfor-
mance across the enterprise.
BACK-OFFICE
TRANSFORMATION
A well-developed methodology to
tailor your managed services for
your specific business requirements
and circumstances
• Proven methodology to institute quality
control and consistency across processes
• Ability to incorporate learnings into pro-
cesses to make themmore efficient and
drive incremental productivity
A trusted resource that can leverage
global scale and resources to deliver
reliably and with quality
• Broad global capacity to take advantage
of the best talent-to-value choices
• State-of-the-art quality and controls,
including attention to retail security com-
pliance such as the Payment Card Indus-
try Data Security Standard (PCI DSS)
• Ability to deliver to retail’s distinctive needs,
that is, with regard to HR services across
a geographically dispersed population of
store employees
A strategic approach to determining
which processes to consider for
out-tasking
• Look for processes that are critical to oper-
ations but offer little opportunity for compet-
itive differentiation. Finance and accounting
and nontrade procurement are just two of
many examples in the retail sector.
Recruitment
process
outsource
Human
resources
Finance and
administration
Continuous
process
improvement
Supply chain
management
Merchandising
Supply chain
Sales
Finance
Human resources
Marketing
Operations
Retailer
MANAGE SERVICES
Reduced general and
administrative costs
Improved performance
management through
transparency of key
performance metrics
and dashboards
Lower risk of data
theft and unauthorized
release of private
customer data
Reduced operating
costs
IBMhas a wealth of practical business exper-
tise to help retailers identify measurable
growth opportunities to transformback-office
processes for immediate cost savings as well
as for sustained long-termperformance.
Retailers typically consider managed ser-
vices for operationally critical yet competitively
nondifferentiating capabilities. Managed ser-
vices from IBM are focused on several of
these, including:
Finance and administration: Managed
procure-to-pay services from IBM help
organize spend management and improve
visibility into spend and drive enterprisewide
process and data standards for enhanced
business insight, stronger compliance con-
trol and improved financial performance.
• IBM supports 40 languages in more than
60 countries
• IBM manages more than USD50 billion in
revenue for clients as part of our order-to-
cash processes
IBM also provides facility and real estate
management software solutions that help
retailers manage capital investments in
stores, warehouses, distribution centers and
other property.
Supply chain management: IBM helps
increase the value of retailer spend by lever-
aging our substantial buying power. This is
particularly advantageous to retailers look-
ing to reduce nonmerchandise procurement
costs, mitigate risk, improve compliance
and directly affect financial performance.
• IBM manages annual aggregate spend in
excess of USD48 billion.
• Clients typically achieve payback within 12
months, with a 5 – 10x ROI on procurement
outsourcing fees.
Human resources: IBM integrates our
experienced HR, recruiting and learning
specialists with proven technology and a
focus on core strategic HR and talent initia-
tives to create a high-quality employee and
manager experience that is low in risk and
strong on compliance.
Cloud-based software and recruiting pro-
cess outsourcing (RPO) integrate people
and processes, providing solutions to engage
a smarter, more effective workforce across
critical business functions.
• IBMsupports 8,900 clients across a variety
of industries (such as financial services,
pharmaceuticals, retail and consumer pack-
aged goods), including many in the 2013
Fortune 500
As we work to structure the right managed
services for you, we use our process inno-
vation specialists who are experts in Six
Sigma, Lean, industrial engineering, bench-
marking, advanced analytics and modeling.
Using IBM’s proprietary analytics-driven
methodology known as EPIC (Enterprise
Process Innovation Continuum), we can
accelerate process innovation and drive
significant business outcomes.
With more than 50 delivery centers on five
continents using standardized processes,
IBM can distribute work efficiently, execute
consistently and transfer work between
sites as required to help ensure business
resiliency. And all of this is backed by IBM’s
considerable technology investments.
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
Over the past several years, IBMhas trans-
formed itself from being a multinational
corporation into what we call a globally
integrated enterprise.
• Rebalanced our workforce geograph-
ically to the places that offer the right
skills and the right costs to compete in
today’s economy
• Enabled USD3 billion – USD5 billion in
supply chain savings each year for the
last five years
• Achieved USD500 million in productivity
improvements driven by process rede-
sign initiatives
This global home furnishings retailer imple-
mented an asset and facilities management
(FM) solution from IBM to monitor all of its
assets, provide automated preventive man-
agement, and track equipment usage and
repair trends.
• Is anticipated to generate an average
savings of 5 percent of global FM
spending over six years
• Helps improve energy efficiency and
promote renewable energy usage
• Improves the customer experience to
help ensure that stores are inviting and
in the best working order
AMC turned to Kenexa software to find
the right candidates who would thrive in
the culture of the organization, generating
higher concession sales.
• Increased profits per customer by 1.2
percent, which translated into millions of
extra dollars
• Reduced overall turnover rates by 43
percent
• Increased candidate leads
IBM AMC THEATRES IKEA
Managed services through IBM
Global Process Services
• Finance and administration
• HR and payroll administration
• Nonmerchandise (indirect) procure-
ment and supply chain management
• Recruitment
• Global payments
• IBM Managed Security Services
Software solutions leveraged in man-
aged services fromIBM
• IBM Emptoris
®
software for sourcing
and procurement contract management
• IBM TRIRIGA
®
software for store and
facilities management
• IBM Maximo
®
software
integration assets
• IBM Kenexa
®
software for recruitment
• Many additional IBM software solutions
Process improvement and imple-
mentation services
• Finance Healthcheck
• IBM Business Analytics and Optimi-
zation (BAO) Jumpstart for Risk,
Finance and Fraud
• IBM Application Portfolio Assessment
• IBM Enterprise Architecture
Assessment
• IBM enterprise asset management
• Smarter Workforce Accelerator
• Workforce and Talent Assessment
• IBM Security Operations
Optimization Services
• IBM IT Security Consulting Services
Technology platforms
• IBM POWER7+

, IBM PureFlex


System, IBM Systemx
®
• IBM SmartCloud Enterprise+ (IBM
POWER
®
, Intel), Softlayer (Intel)
POTENTIAL
BENEFITS
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
25 24
BACK-OFFICE
TRANSFORMATION
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
SMARTER
OPERATIONS
POTENTIAL
BENEFITS
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT Retail IT has matured from being viewed mainly as a cost center to being recognized
as a potential competitive differentiator. But the typical retailer spends a significant
amount of its IT budget just to “keep the lights on” with existing infrastructure rather
than to deliver new, value-added functionality. This points to a serious opportunity to
save on baseline IT costs and to free these funds for productive uses.
This is the goal of retail infrastructure optimization—to leverage the latest advances
in IT design to reduce the time and cost to deploy the new applications and function-
ality needed to address consumers’ changing demands. At the same time, we help
eliminate waste and, leveraging cloud computing to deliver efficiency and savings
through a variety of methods, improve overall IT security and operational efficiency.
RETAIL
INFRASTRUCTURE
OPTIMIZATION
An advanced business
intelligence platform
• Supports a wide range of strategic enter-
prise analytics and is able to support
long-termand short-termanalytics by
leveraging the data warehouse
Advanced application portfolio
management to facilitate testing,
management and security
• Facilitates application testing as well as
the development of incremental value-add
features and functions
• Employs advanced IT security design to
safeguard critical data and systems and
protect customers and the enterprise
fromunauthorized access
Advanced technology platforms designed
to reduce waste and facilitate rapid, low-
cost application deployment
• Leverages virtualization and cloud-
computing models to help reduce costs
and unused capacity
• Uses the latest in automated application
deployment to set up environments more
quickly and cost-effectively and drive the
faster implementation of newapplications
Enterprise IT
infrastructure
Store IT
infrastructure
Store
ENTERPRISE
BUSINESS INTELLIGENCE
SECURITY AND
SYSTEMS MANAGEMENT
TESTING AND
APPLICATION
MAINTENANCE
Store
Store Reduced overall IT
spend
Faster time to
deployment of new
functionality
Improved application
quality control
Retail infrastructure optimization typically can’t
be accomplished through a single solution or
software package. It requires a set of ele-
ments tailored to suit your needs and aimed at
delivering significant cost advantages to your
IT organization. This is an IBMspecialty and
one we have been delivering successfully for
many years. Our approach is designed to free
IT funds that are being wasted on current
inefficient designs.
By leveraging advanced technology plat-
forms such as the IBM PureSystems
®
family,
including IBM PureApplication System, we
can efficiently consolidate and optimize the
use of systems to deliver retail applications
such as merchandising, supply chain, store,
e-commerce, finance, HR and analytics.
The IBM PureSystems family is designed to
take infrastructure up a level in performance
by coming equipped to facilitate the deploy-
ment of the specific applications you will run.
And our proprietary, user-friendly software
will guide and automate the creation of envi-
ronments for each application.
A critical element here is virtualization—treat-
ing all servers on the floor as if they were one
giant server—to dramatically increase utiliza-
tion and reduce wasted and unused capacity.
We also leverage Softlayer global cloud infra-
structure for cloud computing to expedite the
deployment of new workload systems and
applications as well as to deliver efficiency
and savings via a variety of possible models,
ranging from on premises to fully hosted and
managed. We have time and again been able
to deliver significant cost savings to retailers
by taking over IT infrastructure and opera-
tions via our strategic IT outsourcing services.
The next element is to establish an efficient
structure for testing, maintaining and
managing your application portfolio. By
leveraging our skills in managing enterprise
applications globally, we can implement effi-
cient testing methods to improve the quality
of your capabilities and to develop new fea-
tures and functions cost-effectively.
Augmenting this is our industry-leading IT
security and systems management solutions
based on IBM Tivoli
®
software, which pro-
tects the store and the enterprise and helps
facilitate data security, privacy and compli-
ance with PCI DSS requirements.
Completing the picture, we focus on delivering
operational efficiencies by taking advantage of
advanced business analytics. At the enter-
prise level, we implement a robust business
intelligence platform using IBM Cognos
Business Intelligence software that can deliver
on practical operational analytics for mer-
chandising and marketing and at the same
time build the foundation for enterprisewide
business intelligence.
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
This European retailer implemented an IT
consolidation and virtualization strategy
based on IBM servers.
• Allowed the consolidation of 20 stand-
alone systems into 7 IBM servers,
reducing floor space requirements
by 65 percent and cutting energy
consumption by 50 percent
• Enabled far more efficient allocation of
existing processing capacity and the
ability to add new capacity through
virtualization using IBM servers
This global luxury goods retailer imple-
mented critical SAP ERP functionality on
IBM servers to streamline its IT footprint
while also reducing business risk.
• Enabled the efficient implementation of
a large and complex ERP solution
• Enabled multiple ERP modules to be
consolidated, using the innovative
onboard virtualization feature within the
IBM Power Systems platform
• Greatly enhanced business continuity
by enabling disaster recovery within
24 hours
A SPECIALTY APPAREL CHAIN MOVADO
Managed services
• Through the IBM Global Technology
Services
®
team:
– Strategic IT outsourcing
– IBMSmartCloud Enterprise+
(POWER, Intel), Softlayer (Intel)
– Fiberlink mobile device
management on cloud
– Managed store operations;
surveillance application
– Backup and archive on the IBMcloud
– Managed Security Services
• Through the IBM Global Business
Services
®
team:
– Application management
– Application testing
Process improvement and
implementation services
• Enterprise Architecture Assessment
• Application Portfolio Assessment
• IT Strategy and Performance
Assessment
• IBM Business Process Management
Visioning and Roadmap
• Security Operations Optimization
Services
• IT Security Consulting
Software solutions
• IBM Tivoli
• IBM Cognos Business Intelligence
• IBM Presence Zones
• PCI enterprise security model
• IBM Maximo integration assets
• Retail Transaction Interface (RTI)
services model
• Retail open store reference
architecture
Technology platforms
• Preferred platform: Systemx, POWER7+
or PureFlex System, mainframe,
systems software
• IBM Retail Data Warehouse on
IBM Power Systems
• IBM InfoSphere Master Data Manage-
ment Collaborative Edition on
IBM Power Systems
• Retail ERP (SAP and Oracle) on
IBM PureSystems
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
27 26
RETAIL INFRASTRUCTURE
OPTIMIZATION
WHAT YOU NEED
BUSINESS CONTEXT EXAMPLE
HOW WE DEFINE IT
SMARTER
OPERATIONS
POTENTIAL
BENEFITS
To drive growth and profits across a true omni-channel organization, everyone must
consistently be working toward a single, coherent set of shared information, business
plans, financial goals and objectives. But the fact is that at most retailers, key functions
still operate largely in separate silos, with a lack of alignment between operations,
channels, marketing, merchandising and supply chain. There is often a disconnect
between the financial measurements that drive how people make decisions and indi-
viduals’ actual performance. This problem is exacerbated by the lack of effective ways
to spot trends and issues early so as to quickly move to react to them.
The answer is to implement the set of capabilities we call performance insights and
management and then leverage this to drive visibility into performance and the align-
ment of incentives for performance across the organization. There also needs to be
alignment of corporate strategy to operational execution. Retailers that excel in this
area put themselves one step ahead of their competitors in understanding what to
do next—and that intelligence can be key to driving significant incremental profit.
PERFORMANCE
INSIGHTS AND
MANAGEMENT
Performance measurement and
reporting processes that make outcomes
quickly visible to everyone and that
reveal true cause and effect
• Drives alignment between top-down and
bottom-up plans
• Allows managers and executives to con-
tinually monitor execution against plan by
all parts of the enterprise
• Enables timely identification of execution
issues through alerts and trend tracking
Sales performance management
to increase visibility into expenses
and enable varied types of
compensation plans
• Automates the process of calculating and
reporting variable-based pay, providing
more visibility and accountability into one of
organizations’ largest variable expenses
• Enables new kinds of compensation
plans that can drive desired sales behav-
ior, reduce commission cycle times and
eliminate errors in overpayments
Enterprisewide financial planning to
define metrics and goals for each role in
the organization in tight alignment with
the overall business strategy
• Enables what-if analysis to determine the
best course of action
• Uses consistent metrics across depart-
ments to help ensure that everyone is work-
ing toward common objectives and projects
• Focuses on the true effect of business deci-
sions on profits and other key outcomes
Top-down
Strategic plan
Key performance
indicators
Financial statements
Scenarios
What-if modeling
Advanced analytics
Business goals
Performance data
– Store plans
– E-commerce plans
– Merchandise plans
– Marketing plans
– Supply plans
Improved
organizational
alignment
Improved
collaboration
Improved overall
profitability
The key with performance planning, reporting
and analysis is to achieve a tight integration of
people, processes and systems. The first ele-
ment, enabling an effective enterprisewide
financial planning, budgeting and forecast-
ing process, is delivered with IBM Cognos
TM1 enterprise planning software.
Using performance data and assumptions,
Cognos TM1 software allows you to con-
duct what-if analysis and to model the effect
of business decisions. Building on that, it
empowers you to create a companywide
financial plan to establish and govern opera-
tional goals and planning for each functional
area. This is the way to help ensure that the
metrics and incentives as defined for each
buyer, merchandise planner, supply chain
specialist, marketer or promotion planner,
store associate, store manager, and HR pro-
fessional are directly tied to overall corpo-
rate goals: All members of the organization
are able to act in concert to drive growth
and profits.
Sales performance management helps
align associate sales performance with cor-
porate strategy. Through automation and
newplans, you can increase accuracy, reduce
costs, and drive desired actions and sales
performance though appropriate incentives,
delivering measurable improvements for
your organization.
The next element, a comprehensive perfor-
mance measurement and reporting sys-
tem, is delivered with IBMCognos Business
Intelligence software. Cognos Business Intelli-
gence software can produce reports, provide
dashboards, and deliver scorecarding and
analysis to track key metrics so managers
and executives can track and understand
operational and financial performance.
The last critical element here, advanced ana-
lytics to help you understand root causes, to
anticipate performance gaps and to assess
alternative paths of action, is the specialty of
IBM SPSS software. SPSS software can
uncover patterns and relationships between
performance indicators to help you predict
with confidence what will happen next and
decide what moves to take.
Our related service offering, CFO perfor-
mance insight, uses SPSS software to
deliver a prepackaged scorecarding solution
that can automate the discovery of relation-
ships and deliver new insights so you can
drive more-effective decision making.
More information on each of these offerings is available on the ibm.com website. Contact your IBM representative to arrange a briefing.
This China-based women’s apparel man-
ufacturer relies on IBM Smart Analytics
System to access reliable data required to
make informed business decisions
• Improves the accuracy of sales
projections
• Optimizes the merchandise mix at stores
• Protects profit margins
MarineMax, one of the world’s largest
boat retailers, built an enterprise-class
business analytics platform based
on IBM Cognos and IBM InfoSphere
technologies.
• Allows faster strategic and financial
decision making
• Provides operational insights to under-
stand customer demand
• Enables reallocation of marketing bud-
get to more-effective campaigns
This Canadian discounter implemented
IBM Cognos TM1 software to automate
spreadsheet-based budgeting and fore-
casting processes.
• Reduced the budgeting cycle by 85 per-
cent while eliminating spreadsheet-based
data collection, saving 220 hours a month
• Allowed store-based users to enter actual
data directly into the systemvia a simple
web interface
• Delivered a 100 percent ROI in two years
EEKA FASHION MARINEMAX GIANT TIGER
Advanced analytics to identify root causes and emergent performance gaps and to anticipate changes in marketplace demands
• The goal is to be the first to understand root causes; anticipate performance gaps; and identify changes to consumer demand, competitors, suppliers and
the economy.
• Prediction analytics enable rapid reforecasting to adjust to changes and assess alternative courses of action.
• A key is to establish direct feedback to financial planning and targeting to enable rapid course changes to help meet changing demand and drive growth.
Software solutions
• IBM Cognos TM1
• IBM Cognos Business Intelligence
• IBM SPSS
• IBM Cognos Sales Performance
Management
Process improvement and implementa-
tion services
• CFO performance insight
• Business analytics jumpstart
Managed services
• Business process outsourcing (BPO)
record-to-report services
Technology platforms
• IBM PureSystems
• IBM PureData Systemfor Analytics
• Cloud for IBM Varicent
®
CASE STUDIES
SELECTED IBM OFFERINGS
HOW WE DELIVER IT
OMNI-CHANNEL
SUPPLY NETWORKS
BACK-OFFICE
TRANSFORMATION
RETAIL INFRASTRUCTURE
OPTIMIZATION
PERFORMANCE INSIGHTS
AND MANAGEMENT
SMARTER OPERATIONS SMARTER MERCHANDISING AND SUPPLY NETWORKS SMARTER SHOPPING EXPERIENCE
360° VIEW OF
THE CUSTOMER
CONNECTED
MARKETING
OMNI-CHANNEL
COMMERCE
OMNI-CHANNEL
MERCHANDISING
29 28
PERFORMANCE INSIGHTS
AND MANAGEMENT
IBM’s commitment to
the retail industry
IBM has more than 4,000 professionals focused on the retail industry
around the world as well as one of the largest global networks serving
retail, with almost 2,000 IBM Business Partners.
IBM’s preeminence in the development of leading industry solutions is the
direct result of our strong commitment to research and development. We
invest more than USD6 billion annually in R&D, and for 20 consecutive years
have been the world’s leading patent-earning organization. IBM earned
more 6,478 patents in 2012 alone.
We are proud that our efforts to make the world a safer, cleaner and
more prosperous place have led us to spearhead our series of IBM
Smarter Planet
®
initiatives:
Smarter retail
IBM’s initiative to drive improvement in the retail industry
Smarter commerce
IBM’s initiative to drive improvement in digital commerce
across multiple industries
Smarter analytics
IBM’s initiative to drive improvement through the use of
advanced analytics across multiple industries
SmartCloud
IBM’s ecosystem of cloud solutions, which includes infra-
structure as a service, software as a service and platform
as a service offered through public, private and hybrid
cloud delivery models
Social business
IBM’s initiative to embrace and cultivate a spirit of collabora-
tion and community—internally and externally—to deliver
new levels of return and engagement
FOR MORE INFORMATION
For more information on any of the solutions described in this solution
guide, contact your local IBM representative or visit ibm.com/retail
© Copyright IBM Corporation 2014
IBM Corporation
Sales and Distribution Group
Route 100
Somers, NY 10589
Produced in the United States of America
January 2014
IBM, the IBM logo, ibm.com, and the planet icon
are trademarks of International Business Machines
Corp., registered in many jurisdictions worldwide.
Other product and service names might be trade-
marks of IBM or other companies. A current list of
IBM trademarks is available on the web at “Copy-
right and trademark information” at ibm.com/
legal/copytrade.shtml
Netezza is a trademark or registered trademark of
IBM International Group B.V., an IBM Company.
Kenexa is a trademark or registered trademark of
Kenexa, an IBM Company.
Softlayer is a trademark or registered trademark of
Softlayer, Inc., an IBM Company.
Intel is a trademark or registered trademark of Intel
Corporation or its subsidiaries in the United States
and other countries.
This document is current as of the initial date of
publication and may be changed by IBM at any
time. Not all offerings are available in every country
in which IBM operates.
The client examples cited are presented for illustra-
tive purposes only. Actual performance results
may vary depending on specific configurations
and operating conditions.
THE INFORMATION IN THIS DOCUMENT IS
PROVIDED “AS IS” WITHOUT ANY WARRANTY,
EXPRESS OR IMPLIED, INCLUDING WITHOUT
ANY WARRANTIES OF MERCHANTABILITY, FIT-
NESS FOR A PARTICULAR PURPOSE AND ANY
WARRANTY OR CONDITION OF NON-
INFRINGEMENT. IBM products are warranted
according to the terms and conditions of the
agreements under which they are provided.
The client is responsible for ensuring compliance
with laws and regulations applicable to it. IBM does
not provide legal advice or represent or warrant
that its services or products will ensure that the
client is in compliance with any law or regulation.
Please Recycle
REO12345_USEN-03
30