thinking like a customer

©2016 IBM Corporation1 May 1, 2023

Thinking like a customer

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Your cognitive future in the retail industry


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

Self-serve retail

Customers are assuming ever

greater ownership over their personal

retail journey. Retailers will have to ensure better

customer engagement on all

channels

Security breaches

Malware attacks targeting systems

are becoming more common. Retailers have to discover

effective and relevant solutions to

combat this

Eroding margins

Retailers are highly concerned about

declining customer loyalty and

profitability. Retailers need to adapt fast in

the new normal environment

Technology progress

Technology is redefining the way in which retailers can

interact with customers. Retailers will have to be more aggressive in making decisions to embrace

new technology

Provide better collaboration between with suppliers, partners and customers

and enables seamless experience across channels

Engage DecideDiscover

Provide ability to digest vast amounts of data to identify new avenues and

implement new ideas

Provide contextual, evidence-backed recommendations, with changing

business models, cost structures and customer behavior


Customers are demanding more personalized experience but retail executives struggle in delivering this

of retail executives agree customers demand more personalized experiences1

Industry need

Engage

Source: See notes

The key question

65%

60%

57%

56%

Achievement gap

Enabling self service

Quality of service

Personalized experience

Speed of resolution

Major areas in which retailers are not competent enough in delivering customer service2

69%

How can retail organizations provide better personalized experience to its customers?


of retail CXOs are actively pursuing industry model innovation1

Industry need Achievement gap

Key challenges to pursue disruptive innovation2

59%

57%

52%

51%

48%

Overly aggressive ROI expectations

Insufficient business case/modeling skills

Lack of quality/reliable data

Insufficient skilled human resources

Retail industry is actively pursuing innovation but is challenged by aggressive ROI expectations and insufficient skills

Discover

Source: See notes

The key question

How can retailers free themselves from constraints of traditional capabilities and foster innovation?


Retail executives are not confident in making decisions

Industry need

Decide

of retail executives are expected to make big decisions in the strategic areas, such as competitor collaboration and corporate

restructuring, in the next twelve months1

Source: See notes

More than half

Achievement gap

47% of the retail executives are not

strong in taking strategic business decisions2

The key question

How can retail organizations build capability of taking right decision at right time ?


One way of answering these questions is through cognitive computing which…

Engage DecideDiscover

Source: IBM Institute for Business Value Analysis 2015

Acts as a tireless agent providing expert assistance to human users

Carries a conversation naturally, e.g. in human language

Understands consumers 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


Retail executives believe cognitive computing will play a disruptive role and intend to invest in this capability in the future

… of executives familiar with cognitive computing believe it will have a critical impact on the future of their business1

…of executives familiar with cognitive computing believe that it will play a disruptive role in retail industry1

94% of the executives familiar with cognitive computing are likely to invest in this in future2

83%

91%

Source: See notes

1-2yrs 3-4 yrs >= 5 yrs0%

10%20%30%40%50%60%

6%

39%

49%


To learn how your organization can use cognitive computing to open up opportunities in the retail ecosystem, please contact:

Anthony MarshallResearch Director and Strategy LeaderIBM Institute for Business [email protected]

Keith MercierGlobal Retail LeaderIBM Watson [email protected]

Sandipan SarkarCognitive Computing Leader,IBM Institute for Business [email protected]

Visit our website to read full report on this topic:

http://www-935.ibm.com/services/us/gbs/thoughtleadership/cognitiveindustry/

Contact study authors

IBM Institute for Business ValueLeading edge thought leadership and practical insightsfor business executives

mailto:[email protected]




