IBM Helps Retailers Respond to Changing Consumer Behavior

NEW YORK, NY - NRF Annual Convention & EXPO 2009 -- Starting today IBM (NYSE:IBM) will demonstrate innovative new technologies to help prevent “buyer’s remorse” in today’s new economy. IBM also announced the results of a comprehensive survey that details changes in shopper behavior, as well as new solutions to help retailers build smarter retail systems to better meet consumer preferences.

New Retail Technologies Prevent “Buyer’s Remorse”
IBM is transforming the interior design and furniture buying experience through new “3D shopping” technologies. Using a “3D viewer” in-store allows consumers to move furniture around and test room layouts in a virtual setting. Shoppers can share their designs and more details on specific items -- including make, color, texture, measurements and price -- in 3D with friends and family using their mobile phones. The ability for shoppers in different locations to select furniture and co-design rooms virtually can help reduce buyer’s remorse by allowing consumers to “try before they buy.” IBM is demonstrating 3D shopping at its booth, #2105.

IBM and business partner EZFace, Inc. is giving consumers a new way to experiment with make-up and hair color through its “Virtual Mirror Kiosk,” a virtual reality tool that allows users to “try on” cosmetics at the beauty counter without having to use brushes or wipes. Shoppers can snap a digital self-portrait using the kiosk’s camera, swipe a beauty product’s barcode and virtually apply it to their hair, face, eyes or lips producing a realistic simulation of a makeover -- without a mess. Customers can share a photo of their virtual makeover via email and social networks such as Facebook to solicit quick advice from friends. IBM and EZFace are demonstrating “Virtual Mirror” at booth #2163.

IBM survey: Consumers are making trade-offs and shifting loyalty
IBM’s Institute for Business Value (IBV) conducted a survey of 30,000 U.S. consumers in September and November 2008, and findings indicate that tighter budgets and lower confidence have fundamentally changed consumer behavior.

The study, titled “Shopper Advocacy: Building Consumer Trust in the New Economic Environment,” shows two-thirds of consumers surveyed said they are postponing purchases or buying fewer items overall, while 60 percent of consumers indicated they are shopping for products on sale and using coupons more often.

Despite the general economic belt tightening, the survey revealed that the future holds promising opportunities ahead for retailers. An emerging category of power shoppers called the “Shifters” -- shoppers who move their purchases to new retailers -- are growing in influence and stature. IBM found that 45 percent of Shifters have increased spend at their primary retailer within the past year, and overall Shifters are spending more year-to-year. Another key finding of the survey was around the dramatic and encouraging rise of Advocates. More consumers are becoming loyal to their primary retailer, as evidenced by the fact that 38 percent of respondents are now Advocates, compared to 21 percent from last year. Advocates are customers who recommend their preferred retailer to friends and family, who will buy more when the assortment expands and who will remain loyal to their preferred retailer when a comparable competitor enters the market.

“The customer is king?” episode -- part of IBM’s “Building a Smarter Planet” series -- provides additional perspectives on the current retail climate, developing trends and factors retailers should be considering to remain competitive in this dynamic space. Doug Fleener, a retail consultant of Dynamic Experiences Group, Jim Blasingame, small business expert and host of the small business radio program, The Small Business Advocate Show, and Rob Garf, a retail strategist with IBM Global Business Services, all weigh in on how they see the world of retail today.

Building smarter retail systems
IBM today unveiled the IBM Retail Performance Analytics (RPA), a “quick start” portfolio of solutions designed to help retailers analyze and apply critical business data to help improve their bottom line. IBM also launched a dedicated Retail Performance Analytics Services practice to help customers leverage data across their enterprise in a meaningful way. This new comprehensive approach -- which addresses a complete spectrum of customer, merchandizing, supply chain, financial, and total store analytics -- will help retailers coordinate planning and measurement across the chain so they can grow revenue, increase market share and better meet customer demand.

IBM and SkyIT Group announced the companies are helping fashion and apparel suppliers, such as New York-based Theory, take advantage of consumer trends more intelligently by equipping them with a powerful software as a service (SaaS) offering. Utilizing IBM technology, Sky IT Group has developed SkyPAD, a SaaS-based dashboard for the consumer products industry designed to allow manufacturers, distributors and retailers to view their product sales performance at the store level. It provides statistical, graphical and image views of products sold at retail stores, allowing suppliers and retailers to make production, sales and merchandising decisions based on real-time facts.

Green retailing: New systems put retailers’ high energy costs to sleep
IBM also announced the smallest, fastest, most energy-efficient point-of-sale system of its kind as part of a broader strategy to deliver comprehensive “Green” solutions for retailers. Designed specifically for midsized retailers looking to differentiate their brands, this new line of IBM SurePOS™ systems is first-to-market with breakthrough deep sleep automation technology capable of helping clients reduce store energy consumption by as much as 66 percent, or about $72,000 in savings for a store deploying 1,500 terminals.

“In the new economy, retailers must adapt to fundamental shifts in consumer behaviors to attract new shoppers and create more advocates while driving down costs, and creating new value,” said Karen Lowe, General Manager, IBM Global Retail Industry. “IBM can help retailers reduce costs and improve performance through smarter operations. New technologies are optimizing processes to make merchandising and supply chains more efficient and cost effective, so retailers can keep their focus on delivering a superior shopping experience to consumers.”

About IBM
For more information on IBM’s activities at NRF 2009, please access the company’s online Press Kit at www.ibm.com/press/nrf2009.

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