eTailing India Conclave Jaipur- 2013 Rajesh Rao IBM-

1. Smarter Commerce: Engaging the Customer in the Multi Channel Rajesh Rao – Smarter Commerce Leader IBM India South Asia April 18th 2013

2. The use of both online and oﬄine channels is transforming business and consumer interacEon 2 §  Customers: are leading the conversaEons that deﬁne brands §  Partners: are interacEng to accelerate business value §  Employees: Need to be able to communicate across mulEple channels §  Opera1ons: Need to service the customers across channels Social …this shift is facilitated by technology enabled social interactions causing a seismic shift in the way business is done © 2013 IBM CorporaEon

3. 3 Call Center Create Order Check Status Cancel Order Initiate/Track Return Schedule Delivery or PickupChange Order Schedule Store Pickup Research Product Store Create Order Check Status Cancel Order Initiate/Track Return Schedule DeliveryChange Order PickupResearch Product Create Order Check Status Cancel Order Initiate/Track Return Schedule Delivery or PickupChange Order Schedule Store Pickup Research ProductMobile Create Order Check Status Cancel Order Schedule Delivery or PickupChange Order Schedule Store Pickup Research Product Web Managing customer experience across mulEple channels is creaEng new complexiEes © 2013 IBM CorporaEon §  Customers’ experience needs to be managed across mulEple enEEes §  Product and brand experience needs to be consistent §  Inventory needs to managed across diﬀerent channels §  Data is everywhere and needs to uElized §  Employees need new capabiliEes to deal with customers

5. Inﬂuence and communicate with your consumers to create the “loyalty loop” 5 * David C. Edelman, McKinsey, Dec 2010 2) Strengthen brand preference through advocacy 3) Accelerate re-purchase through propensity models 1) Gain insights and increase positive sentiment in social conversations © 2013 IBM CorporaEon

6. 6 Consumer Maintains Control of Data What is your willingness to provide information in exchange for something relevant to you (non-monetary)? Consumers are open to share their personal informaEon, with the excepEon of ﬁnancial data, when there is perceived beneﬁt 25% 27% 41% 41% 44% 46% 63% 30% 30% 28% 29% 28% 28% 21% 45% 43% 33% 30% 28% 26% 15% 0% 20% 40% 60% 80% 100% Media Usage (e.g. Media channels) Demographic (e.g. age, ethnicity) Identification (name, address) Lifestyle (# of cars, home ownership) Location Based Medical Financial Completely Disagree Neutral Completely willing Source: IBV Retail 2012 Winning Over the Empowered Consumer Study n= 28527 (global) P04: What is your willingness to provide informa1on for each of the following items if [pipe primary retailer] provided something relevant to you in exchange? © 2013 IBM CorporaEon 6

8. Personalized cross-channel execution Optimizing customer engagement at every touch How do we use differentiated customer experience and drive to build loyalty, retention and advocacy? How do we use individual customer likes, dislikes and unmet needs to personalize the experience? 2 1 Traditional and digital channels not integrated Fragmented cross channel customer experience Poor channel performance or utilization Issues that need to be addressed Questions that need to be answered… Objectives Social/mobile channels How do we develop a develop a cross-‐ channel transformaEon strategy? © 2013 IBM CorporaEon 8

9. A integrated mulE-‐channel business engages and manages customer experience across all the channels 9 Harness the potential of social analytics for customer centric marketing Optimize marketing spend across multiple channels in real-time Establish and cultivate customer and advocate relationships Recast your relationship with distribution partners via 360 customer insight Embrace a fully-realized Social media marketing strategy Customer Ac1vate your loyalty loop Break your compe1tors’ loyalty bond Capture new loyal customers © 2013 IBM CorporaEon

10. “As consumers eﬀortlessly move across digital touchpoints and as markeEng campaigns span channels, the need for comprehensive analy0cs has never been greater.” “A data-‐sharing partnership between two or more organizaEons in order to increase customer insight, idenEfy opportuniEes for collaboraEve markeEng, deliver be_er targeEng and relevance, and improve customer experience and engagement.” Harness the potenEal of customer centric interacEon with analyEcs and social business Mobile Web Retail Social Media Gaming & Entertainment “Capture Trends as They Happen” (Cross Channel) Recommendations “Focus on User Segmentation” “Marry User Activity to the Social Graph” “Automate Targeting and Personalization” “Leverage Analytics to Stay Ahead of Trends” Source: http://www.forrester.com/The+Road+To+Digital+Intelligence/fulltext/-/E-RES61385 www.forrester.com/Leverage+Social+Data+To+Elevate+Customer+Intelligence/fulltext/-/E-RES72782 © 2013 IBM CorporaEon 10

11. Establish and culEvate customer and advocate relaEonships 11 R O E SH ü Micro-‐segmentation: Social, Survey, Operational & CRM Datasets ü Proﬁle Generation/Cultivation: Longitudinal Collection, 1:1 Engagement, Propensity Modeling, Targeted Crowd Sourcing ü Metric Tracking: Migrations, Sales Inﬂuence, Brand Presence Viral Negatives Believers Advocates Viral Positives High Activity Level Low Negative Sentiment Positive E © 2013 IBM CorporaEon

12. Recast your relaEonship: Channel sales dominate the sales, yet li_le consumer informaEon is shared 12 E O E SH R Retailers Online Retailers Distributors End Consumers Typical manufacturer see Complete end user data on < 5% of sales “Black hole” on > 95% of sales Rare Gems Diamonds & Jewellery © 2013 IBM CorporaEon “Black hole” on > 95% of sales Full Visibility to consumer

13. Recast your channel relaEonships: leverage your superior knowledge of the customer lifecycle 13 Is it Eme to buy a new one?? I need help. I made the purchase. I wish I could do... I am interested in the product. How do I use this? Revitalize the Relationship Shift the Balance of Power Drive Channel Innovations •  More fine-tuned offers •  Easier to do business with •  Better terms/product placement •  Exchange leads for reduction in trade funds •  Evidence or sentiment based feature improvement •  Complementary services that match customer lifecycle needs E O E SH R © 2013 IBM CorporaEon

14. OpEmize markeEng spend across mulEple channels in real-‐Eme © 2013 IBM CorporaEon 14 E E SH R • Establish cross-channel Marketing Mgmt Platform • Create a Comprehensive Analytics Model • Harness Customer (Channel) Preference • Construct & Leverage Behavioral Profile(s) • Determine Spend Objectives • Analyze Performance Statistics • Formulate Multi-channel Next Best Action • Execute real-time (monitor, measure, feedback) O

15. MulE-‐channel Next Best AcEon (MNBA) decision making leads to cost savings 15 E E SH R O From Customer’s Smartphone Contact center agent inputs ChannelBackendSystems Customer interact via multiple channels Comments by customer on Facebook, Twitter Social media data captur e Email from customer Web store POS data Customer Real-Time State Next Best Action Decisioning Module Composite view of recent interactions between customer and business captured as “customer state” – what is the customer’s immediate goal? Examples of Actions : Replace broken item (rather than repair), OR offer certain discount on upgrade Customer Insights Customers purchase history in combination with insights extracted from social media entries are used to extract insights about the customer ChannelBackendSystems Business rules operating on extracted customer insights and customer state generate NBA recommendations Deliver Action to channel Storestaff’s smartphone Customer’s smartphone Instructions torespond onfacebook Emailto customer Contact Center Agent Service Staff © 2013 IBM CorporaEon

16. + 100 points = Automated eNurturing Qualified Lead passed to Sales Registers and downloads BAO paper 10 points Downloads BAO ROI tool 15 points Registers/ attends BAO event 50 points Receives email for BAO ROI tool 5 points Receives email invite to BAO event LDR calls to qualify 10 points 25 points Prospect searches for ROI on BAO solutions 5 points 0-10 POINTS 50-100 POINTS +100 POINTS Awareness Interest Preference Action A B2B example: Automated nurturing works to progress customers through their buying journey © 2013 IBM CorporaEon 16

17. Traditional Multi-touch Program (3Q10 - Feb ‘11) Automated Response Nurturing (3Q10 - Feb ‘11) Emails Sent Open Click-through Responses 2.38M emails/372 tactics* 7.37% 0.73% 0.03% 61K emails/207 tactics** 15.59% 3.63% 3.30% Data from Unica 2X 5X 100X Source: IBM NA Demand Programs March 2011 IBM Case Study: Automated Nurture Accelerates Results for NA SWG Programs © 2013 IBM CorporaEon 17

18. In this case study, we will explore how StarAlign Jewelers focused on building integrated, cross-‐ channel experiences to drive revenue Personalized cross- channel execution Optimizing customer engagement at every touch How do I build a differentiated cross- channel experience that drives loyalty, retention and advocacy? How do I grow revenue by gaining a better understanding of individual customer likes, dislikes and unmet needs so I can personalize the experience? 2 1 CASE STUDY © 2013 IBM CorporaEon 18

19. InternaEonal jewelry retailer StarAlign was commi_ed to creaEng a superior customer experience •  Industry: Retail •  Specialization: Retailing of jewelry, watches and associated services •  Type: B-C company •  Revenues: $4 Billion •  Number of Employees: 18,000+ CASE STUDY StarAlign jewelers background © 2013 IBM CorporaEon 19

20. The objecEve is to aggressively improve sales both online and in-‐store by improving the eCommerce and Social experiences •  StarAlign Jewelers has an 8.8% market share of the US jewelry market and is looking to double their online sales in 3 years. •  StarAlign’s retail store operations are very successful but are not well integrated online, or in mobile and social media; therefore creating less affinity and lowering their brand equity as a cross- channel retailer. •  StarAlign’s e-commerce governance practices and structure was outdated in need of optimization in order to grow into new channels. Client issue •  Social media and digital channels •  Digital content governance Scope CASE STUDY © 2013 IBM CorporaEon 20

21. IBM assessed StarAlign to deﬁne a mission for improving growth To drive sales and serve customers in whichever channel they choose, increasing both in-store sales growth and 'stand-alone' e-commerce sales. To do this: •  StarAlign will fully integrate a customer-centric point of view into its business strategy and operational processes. •  StarAlign will provide a world class multi-channel shopping experience for its customers regardless of where they complete a purchase - online or in-store. •  StarAlign endeavors to increase sales in-store and online through improved e-commerce and online capabilities. •  Mobile e-Commerce capabilities and social communication will be an element of StarAlign’s web, digital tool kit. •  StarAlign’s e-Commerce transformation will be led by consumer needs and desires, with social networking being a key part of the process. Mission CASE STUDY © 2013 IBM CorporaEon 21

22. We will explore 6 deliverables that were created for StarAlign to help them deﬁne a path forward Envision Evaluate Enable1 2 3 •  Competitive marketplace audit •  Customer persona •  Capability map •  Customer journey maps •  Site redesign IBM Interactive developed a cross-channel e-commerce strategy and roadmap for StarAlign Jewelers. CASE STUDY © 2013 IBM CorporaEon 22

23. A compeEEve marketplace audit compared their capabiliEes relaEve to other leading jewelry retailers EnableEvaluateEnvisionSample deliverable 0 Capability does not exist, or was not found during assessment 1 Capability exists, but has poor execution/usability 2 Capability exists, has average/expected execution/usability 3 Capability exists, has superior execution/usability Legend © 2013 IBM CorporaEon 23

24. Customer Personas were developed and act as ‘stand-ins’ for real customers and help guide decision making EnableEvaluateEnvisionSample deliverable Alfred Cahill Engagement Ring Purchaser Age Hometown Marital Status Children Employment Personal Income Education In his own words: I love my job, but it keeps me on the road a lot and the hours can be long. My iPhone is my lifeline -- without it, I wouldn't be able to manage my work schedule and service calls. And yeah, I love the Fox Sports App, too. I feel like it's time to take the next step in my relationship with Joanne, but I'm not sure how to start planning for it. 29 Chicago, IL Single, dating Joanne for 3 years None Mechanical Engineer $65,000 B.A., M.S. Mechanical Engineering Alfred’s Story •  I’ve been with Joanne for three years now, and I really think this is it. I want her to know that she is the love of my life, and that I can’t imagine spending the rest of my life without her. •  You’d think that was the hard part, getting to this decision. But now that I know I want to get engaged, I don’t know the first thing about how to do it. I know I have to get an engagement ring, but I don’t know the first thing about them. I don’t have a lot of time in my schedule for learning about them, either. Important touch points •  Diamond and Engagement Ring Education •  Engagement Ring Pricing Information •  Online Consultation •  In-Store Consultation •  In-Store Purchase © 2013 IBM CorporaEon 24

26. The journey maps were translated in to capabiliEes that were categorized, esEmated and prioriEzed EnableEvaluateEnvisionSample deliverable •  Requires a new interface between IMS and the web to supply inventory data Project type Quick Hit Repurpose Build Buy Strategic Capability description •  Current store inventory processes and systems do not distinguish between merchandize in sellable condition and damaged or defective merchandize. •  Aligning operational practices and business rules to enable this will require changes in current operations •  The data and technology exists today to enable this in the near- term with appropriate disclaimers. ✔ Ability to see the availability of a product and where it is available so customers can decide how and where to transact Benefits •  Allowing customers to view real-time inventory status (for both e-commerce and store location inventories) gives them the choice to complete the transaction in a way that fits their needs. •  Being able to see that a product is available instills confidence in the customer that StarAlign is reliable and dependable. Challenges, assumptions Dependencies ✔ ROM Duration, hours, other cost Duration: 25 – 32 weeks Estimated design hours: 90 - 120 Includes requirements definition & UX design Estimated development hours: 3,000 – 4,000 Includes IT development and test Other cost: •  There may be a one time and/or ongoing cost to store operations to maintain a more accurate account of inventory condition. Real-time inventory and availability © 2013 IBM CorporaEon 26

27. To further demonstrated how changes in design would support their sales direcEves, IBM InteracEve redesigned their site EnableEvaluateEnvisionSample deliverable 1 2 3 Actual site design not shown © 2013 IBM CorporaEon 27

28. IBM helped StarAlign create a vision for the future and gave them a speciﬁc set of acEons to move forward •  Defined a strategy and a vision - that was informed by stakeholder interviews, in-store observations, a customer survey and a marketplace assessment of leading cross-industry site functionality and practices. •  Develop Future State User Experience - Design and developed scenario-based narrative and graphic descriptions of the future-state user experience and differentiating capabilities as well as high-level requirements needed to support the strategy, and identification of key enablers (i.e., people, process and technology) •  Define e-Commerce Roadmap - Defined the initiatives required to support the strategy, develop multi-stage Implementation roadmap, and estimate the cost and effort for re-launching StarAlign’s e-commerce solution. Summary outcomes •  IBM recommends that StarAlign management focus on the following set of projects and initiatives related to support the ecommerce strategy over the next 36 months: Tactical Redesign, Transformation Redesign, Contact Center Optimization, Social Computing Strategy, Mobile Strategy and Web Content Management •  The e-Governance framework be addressed and implemented early in the roadmap. Key recommendations CASE STUDY © 2013 IBM CorporaEon 28

30. §  © Copyright IBM Corpora0on 2013. All rights reserved. –  U.S. Government Users Restricted Rights -‐ Use, duplica0on or disclosure restricted by GSA ADP Schedule Contract with IBM Corp. –  Please update paragraph below for the par0cular product or family brand trademarks you men0on such as WebSphere, DB2, Maximo, Clearcase, Lotus, etc §  IBM, the IBM logo, ibm.com, [IBM Brand, if trademarked], and [IBM Product, if trademarked] are trademarks or registered trademarks of InternaEonal Business Machines CorporaEon in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this informaEon with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the Eme this informaEon was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark informaEon” at www.ibm.com/legal/copytrade.shtml §  If you have menEoned trademarks that are not from IBM, please update and add the following lines: §  [Insert any special 3rd party trademark names/a_ribuEons here] §  Other company, product, or service names may be trademarks or service marks of others. §  Availability. References in this presentaEon to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. §  The workshops, sessions and materials have been prepared by IBM or the session speakers and reflect their own views. They are provided for informaEonal purposes only, and are neither intended to, nor shall have the effect of being, legal or other guidance or advice to any parEcipant. While efforts were made to verify the completeness and accuracy of the informaEon contained in this presentaEon, it is provided AS-‐IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this presentaEon or any other materials. Nothing contained in this presentaEon is intended to, nor shall have the effect of, creaEng any warranEes or representaEons from IBM or its suppliers or licensors, or altering the terms and condiEons of the applicable license agreement governing the use of IBM sonware. §  All customer examples described are presented as illustraEons of how those customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characterisEcs may vary by customer. Nothing contained in these materials is intended to, nor shall have the effect of, staEng or implying that any acEviEes undertaken by you will result in any specific sales, revenue growth or other results. Acknowledgements & Disclaimers: © 2013 IBM CorporaEon 30

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