A glimpse at some IBV findings

3. Five disruptive forces are forcing retail industry to focus on three key
areas
Customer
expectations
Customers inundated
with information are
looking for compelling
content. Retailers
need to engage
better with these
customers
Customers are
assuming ever
greater ownership
over their personal
retail journey.
Retailers will have to
ensure better
engagement at all
touch points
Technology
progress
Technology is
redefining the rules of
customer interaction
in retail. Players will
have to be more
aggressive in making
decisions to embrace
new technology
Eroding
margins
Retailers are highly
concerned about
declining customer
loyalty and
profitability. Retailers
need to adapt fast in
the new normal
environment
Security
breaches
Malware attacks
targeting systems are
becoming more
common. Retailers
have to discover
effective and relevant
solutions to combat
this
Engage
Decide
Discover
Self-serve
retail

4. Successful retailers tend to have stronger capabilities in customer
engagement, discovery of new ideas, and decision-making
Engage DecideDiscover
Outperformersare 43% more competent
in consumer engagement than
underperformers1
44% more outperformersare strong in
decision making than underperformers2
48%
Outperformers
18%
Underperformers
167% more outperformers make
innovation a major priority than
underperformers3
60%
Outperformers
42%
Underperformers
62%
Outperformers
43%
Underperformers
Sources and definitions: See speaker notes

5. Retail organizations need to engage with customers, discover insights and
make effective decisions to succeed
Sources and definitions: See speaker notes
Engage DecideDiscover
Sources and definitions: See speaker notes
… of retail CXOs are actively pursuing
industry model innovation2
…of retail executives are expected
to make big decisions in strategic
areas, in next 12 months3
…of retail CXOs agree that
customers demand more
personalized experiences1
69%
59% More than
half

6. Traditional analytics, while effective across many areas, are constrained
in exploiting full value of exponentially expanding data
Huge amounts of data are available, but
only a fraction are used…
0.5%
amount of world’s data being analyzed (2013)2
>2.5PB
... because of the limits of traditional
analytics capabilities
§ Addresses predefined problems but cannot
adapt to new problem domain
§ Provides accurate and definitive answers but
cannot handle ambiguity or gray areas
§ Handles structured and unstructured
information with known semantics – thus
cannot make use of data from new and varied
sources
§ Interacts in formal digital means (e.g.
commands, screens) with human – thus limits
the engagement of end user
of data is collected by Walmart every hour
from customer transactions1
Sources and definitions: See speaker notes

7. Retailers lack capabilities to make full use of available data, thereby
creating a performance gap
4V of Data
(Volume, Variety, Velocity, Veracity)
Change
Performance gap
Opportunity
…new ways of working, operating, thinking
Achievement
…but riding by the constraints of limited capabilities, organization
achievements would be at slower pace

8. This performance gap can be bridged by cognitive computing, overcoming
human and current systems’ limitations
Human Machine
§ Human brain can consume and
process only a limited amount of
information
§ Human beings are subject to physical
and mental fatigue, i.e. are not scalable
§ Human workers and experts can make
mistakes
§ Traditional technology cannot handle
ambiguity
§ Current paradigm of computing is pre-
programmed and rigid; it cannot learn,
reason, or relate
§ Machines do not interact via natural
interfaces
Retailers need a new tireless machine that can
learn, reason, resolve and interact in natural
language like humans

9. Cognitive computing with its three capabilities can be that new vehicle that
opens the door to new opportunities
§ Acts as a tireless agent
providing expert assistance to
human users
§ Carries a conversation
naturally, e.g. in human
language
§ Understands customers from
past history and enriches
interactions with context- and
evidence-based reasoning
§ Helps people discover insights
far above human levels
§ Finds insights and
connections, understands the
vast amounts of information
available
§ Visualizes possibilities and
validates theories like experts
§ Offers evidence-based
recommendations
§ Evolves continually towards
more accuracy based on
new information, outcomes,
and actions
§ Provides traceability to audit
why a particular decision is
made
Engage DecideDiscover

10. These three capabilities are built upon a set of cognitive functions
Concept expansion
Machine translation
Message resonance
Question and answer
Personality insights Relationship extraction
Speech to text
Text to speech Tradeoff analyticsVisualization rendering Visual recognition
Concept insights
Analyzes the visual appearance of
images or video frames to understand
what is happening.
Translate text from one language to
another.
Personality insights to engage users on
their own terms
Graphical representations of data
analysis for easier understanding
Direct responses to users inquiries
fueled by primary document sources
Provides highly accurate, low latency
speech recognition capabilities
Synthesizes natural-sounding speech
from text
Communicate with people with a style
and words that suits them
Locate relevant documents that may not
directly mention your query.
Intelligently finds relationships between
sentences components (nouns, verbs,
subjects, objects, etc.)
Helps make better choices under
multiple conflicting goals with smart
visualizations and analytical
recommendations.
Maps euphemisms or colloquial terms
to more commonly understood phrases

11. 10,000+ in Design Bootcamps
100+ Product Designs
IBM Design Thinking
Human-centered outcomes at speed and scale
IBM is a Design led enterprise

12. 12

14. Cognitive is helping retail organizations to provide better service, discover
insights and to take better and quick decisions
Engage DecideDiscover
Retailers use cognitive to understand
shoppers behavior,search intentand
guide them with personalized advice
and accurate recommendation1
Retailers use cognitive in constructing
360°view ofcustomers and finding
personality insights thathelps them in
designing effective campaigns1
A major digital imaging company uses
cognitive computing to understand
customer trend and help company in
making concrete improvements in
products2

15. IBM’s DevOps journey
2000+ Developers
8 core tools
35+ tools in the tool chain
30+ bootcamps
100+ squads
300% increase
of “pure coding
time” Cloud
Services
developers
IaaS Services
team reduced
new code
deployment time
from 32 hours…
to 6 hours… to
minutes
Watson
developers
compressed
release frequency
from months to
every 3 weeks
A few early results…
Hypothesis
testing
IBM
Bluemix
Writing user
stories
Continuous
Integration
Daily
Standup
Center of
Competency
Boot Camp
Training
Test Driven
Development
Microservices
Delivery
Pipeline
A/B Testing
Auto- scaling Chaotic
Testing
Circuit
Breakers
Continious
Delivery
Dark
Launch
Dev & Test &
CI
Deploy
&
Manage
Hypothesis
Driven
Experiments
Expand
&
Scale

16. Hybrid Cloud essentials
To develop,
experiment and
iterate at speed
DevOps
Productivity
To extract deeper insight
Powerful, Accessible
Data & Analytics
To unlock
existing data
Hybrid
Integration
To put the
right workload in
the right place
Choice with
Consistency
Cognitive
Solutions
To build
understanding
and learning into
decisions and
interactions

17. Bluemix Garage is a startup within IBM

18. IBM Design Thinking & Garage drives cloud experiences
Delivering a first-class
mobile experience
More info
Toolchains Presence
Insights
Bluemix IoT
MobileFirst GIT
Watson CloudFoundry
Migrating your systems to the cloud
OutcomesDesign
MVP
IBM
Design
Thinking
Deliver Large scale IoT &
Analytics applications
Enable Hybrid Cloud and
Multi-Speed IT
Accelerating innovation
with cloud native
Create a centralized place to enforce security,
manage APIs, and collect analytics.
Watson Next Generation
Cognitive Applications
Effective experimentation with Blockchain

19. Embracing designers, founders, developers and business disruptors globally
Nice
partnered with
CEEINCA
San Francisco
partnered with
Galvanize
Toronto
partnered with
the DMZ
London
partnered with
WeWork Moorgate
Melbourne
partnered with
Carlton Connect
Initiative
OR
we bring a Pop-Up
garage to you
Tokyo
coming 2016
Singapore
coming 2016
Nordic
PopUp
New York
coming 2016
The Garage ecosystem is inclusive

20. Open by design
IaaS
PaaS
SaaS
Hybrid CloudPrivate Cloud Off-premise cloud
OAuth

21. Not your father’s IBM product

22. Organizations should follow a structured road map that nurtures optimism
and reduces complacency
1
2
3
4
Chart the course
§ Identify candidate opportunities across mission & functional areas
§ Define business benefits case
§ Develop organization’s cognitive computing journey/road map
Experiment
§ Prototype use cases
§ Test and validate use case scenarios with users
§ Test business case hypotheses
Develop and train
§ Develop and train the system
§ Build & improve required corpus
§ Train & educate solution end
users & the organization
Deploy, explore and
evolve
§ Deploy baseline solution
§ Continuous learning &
corpus improvement
§ Further use case
exploration