Fabio Gandour is a self-described provocateur. The chief scientist for IBM Research – Brazil was a pediatric surgeon before becoming a hospital CIO and then coming to IBM as a senior health specialist and eventually migrating into research. His thinking is just as unusual as his career path. So I wasn’t surprised when I visited him in the lab in Sao Paulo recently and he told me that we humans are suffering from information indigestion. “We became informivores. We eat information all the time,” he said. Which can produce some unfortunate side effects: “If you eat too much information your brain can’t digest it.”
In other words, Big Data can be bad for you if you don’t watch out.
I’m spending today with a group of industry analysts at our annual Analyst Connect event. At the top of our agenda is a discussion about Smarter Commerce, our approach to finding better business processes related to the buying of goods and services, the selling of those goods and services, the marketing that occurs before they are sold, and the servicing of the customers after they’ve purchased them – the “buy, market, sell, service” cycle of commerce.
So I thought I’d talk about a current, real-world example of Smarter Commerce in action. If you’re like most Americans, the odds are good that you spent some time shopping over the last few days. In fact, based on the 2011 IBM Coremetrics Cyber Monday Benchmark Report, record numbers of people shopped online on Cyber Monday.
By Yuchun Lee
Vice President and General Manager, IBM Enterprise Marketing Management Group
Thanksgiving has always fascinated me. It’s the one day a year that every American family is eating basically the same meal (with a few variations, of course) and watching football and the Macy’s Thanksgiving Day Parade. The entire country stops and collectively does the same thing.
Now we can add one more national activity to Thanksgiving Day: shopping. Who would have thought that Americans would actually want to shop on a national holiday? Actually, my team and I don’t just think that people want to shop: we know it. We use IBM digital analytics to track—in real time—what’s happening in online retail across the U.S. every day of the year. We know that this year, for example, online retailers will bring in record Thanksgiving Day sales.
Americans want to shop on Thanksgiving, but the way they shop has changed dramatically. If you’ve heard me speak at the IBM Marketing Innovations Summit, you’ll know that I’ve long said that the traditional, funnel-based approach to marketing is broken. Consumers are smarter and more sophisticated about the many ways they can use technology to redefine the shopping experience on their terms. Want to save a buck? Look for promo codes online (you might also be able to redeem them in store). Worried about in-store inventory levels for that game your son absolutely has to have? Hop online to see if your local store has it in stock or skip the worry altogether and just buy it online.
By John Squire
Director, Product Management, Enterprise Marketing Management Group
IBM Industry Solutions
A couple of weeks ago when I wrote about online shopping trends and predictions for this holiday season, I focused largely on the rise of the mobile shopper. Today in honor of Black Friday, I’d like to focus instead on social shopping.
Social shopping, as I’m sure most of you know, refers to those people who turn to their social networks for advice or research when they’re considering a purchase. Seems like a pretty intuitive concept. But the fact is that I’ve spoken to far too many retailers who have either discounted the notion that social shopping will ever make significant contributions to their bottom lines or who throw up their hands in frustration and say something along the lines of “I just don’t understand how to use it to drive revenue.”
These are the kinds of perspectives that drive retailers out of business. Here’s why. IBM data shows that people who arrive at a retailer’s site from Facebook are nearly twice as likely to buy something than other people. Put another way, social media’s ability to influence consumer behavior far outstrips that of other channels.
The reason lies in the very nature of social media. Social media is built on the premise that one person’s opinion is not only as valid as anyone else’s, but that it’s authentic and therefore trustworthy. People tend to trust someone (even a perfect stranger) who has taken the time to post an opinion on a Facebook page much more than they trust an ad. More to the point, IBM data shows that people are willing to act on the opinions of strangers. It turns out that even on the Internet, it’s the human relationship that matters.
When it comes to mobile shopping this holiday season, there will be no place for the makers of smartphones and tablet computers to hide. Analysts will be able to detect not just the brand of the device from which a consumer forays to retailing Web sites; they’ll know what model each shopper is using.
This bit of intelligence comes from John Squire, chief strategy officer–smarter commerce, for IBM. Squire is the maestro behind the annual IBM Coremetrics Benchmark campaign–which monitors shopping activities on more than 500 US retailing Web sites and lesser numbers of sites in other countries. Each year, Squire and his team issue a series of updates during the crucial Black Friday and Cyber Monday shopping days. And, this year, the data will be made public in rapid-fire mode. If you have a large appetite for online retailing data, check in frequently at #holidayretail on Twitter.
Mobile shopping is expected to be hot this season. Squire expects about 12% to 15% of transactions on retailing sites to come from mobile devices, up from 4.5% during last year’s holiday shopping season. “We can detect exactly what device they’re using–the exact device,” he says. “That information can help retailers decide how to invest in enhancing the mobile shopping experience.”
Right now, the trends are favoring Apple and its iPad tablet. Squire says iPad users are aggressive online shoppers. In October, for instance, the ratio of iPad users who visit sites and actually buy something reached 6.8%–compared to a so-called conversion rate of 3.6% for mobile devices as a category. As a result of this and other indicators, retailers are adding elements to their Web sites that take advantage of iPad’s capabilities, such as the pinch and zoom features. Giving consumers a rich interactive shopping experience on their iPads likely will increase the demand for the devices–so this trend could snowball for Apple.
By David Keith
Engineering Systems Division
Massachusetts Institute of Technology
Hot on the heels of Thanksgiving, many in the car industry have further reason to celebrate next week: the first birthday of America’s first mainstream electric vehicle (EV). On November 30th 2010, the first Chevy Volt rolled off the production line at GM’s Hamtramck plant in Michigan. In light of this anniversary, I attended a dinner hosted by IBM last week, joining representatives of the auto OEMs, electric utilities, government agencies and the media to discuss current issues in the emerging market for EVs.
No shortage of optimism exists for the future of EVs. One participant observed that the latest wave of support for EVs has the “…largest federated force of people around a new [vehicle] technology there has ever been”. Nevertheless, this enthusiasm was tempered by equally important critiques of the numerous technical, regulatory and economic barriers that must be overcome if EVs are to become a mass-market alternative to gasoline internal-combustion.
From these discussions, I found the following issues to be of particular relevance over the next few years:
1. Growing consumer acceptance of EVs will be a marathon, not a sprint.
A report released last week (PDF) by IBM’s Institute for Business Value found that only 26% of consumers know ‘a lot’ about EVs. This is not surprising. The innovation diffusion literature emphasizes the importance of ‘word-of-mouth’ in the technology communication process – as information spreads, it influences peoples’ decision to adopt. Our familiarity with EVs will only accumulate once we see a neighbor drive past in their Chevy Volt every day or once we take a trip in a friend’s Nissan Leaf. As the number of EVs on our roads grows, so will the strength of this word-of-mouth effect, a reinforcing feedback. However, with fewer than twenty thousand EVs on US roads as of October 2011, these interactions are at present few and far between.
2. How do we remove the barriers of public recharging?
The EV industry is facing the following ‘chicken-and-egg’ infrastructure dilemma: To attract mainstream car buyers, a ubiquitous infrastructure is needed to support the daily recharging of EVs; however, a significant installed base of EVs is required before the construction of that infrastructure is commercially viable.
The difficulty is how to break out of this bind. While one approach could be the widespread rollout of publicly accessible recharging infrastructure, this may be expensive and unnecessary. The economics of public recharging are challenging, requiring high utilization rates and markups to be commercially viable, and are best sustained by large numbers of EVs. Further, early adopters of EVs are likely to include drivers with predictable commuting patterns and those willing to modify their driving patterns to suit their vehicle’s capabilities. Removing barriers to the private deployment of infrastructure at frequently trafficked destinations such as workplaces, shopping centers and multi-tenant dwellings may be a more effective strategy in the short term.
3. Standards and coordination are needed if consumers are to enjoy a seamless recharging experience.
Numerous companies are developing solutions for the EV infrastructure market, with technologies ranging from overnight charging and direct current (DC) fast charging to battery switching. This diversity provides useful insurance in the face of uncertainty about consumers’ future recharging needs. However, it also introduces the potential for incompatible proprietary infrastructure platforms to emerge.
A truly effective recharging infrastructure would be as seamless as the global network of Automatic Teller Machines (ATMs) we have today. Almost any cardholder can instantly obtain cash from their home bank account, regardless of where they are in the world and regardless of who owns the ATM they are using.
Achieving this in the EV market will require the adoption of agreed standards throughout the industry. Similar coordination will be needed in relation to the back-end systems that manage payments, drivers’ search for infrastructure and electricity grid load management if consumers are to find recharging their EV a painless habit.
When IBM began planning its centennial celebration more than two years ago, publishing a book was high on the corporate to-do list. But, rather than producing a traditional centennial book (a glossy coffee table volume full of self praise), the company decided to do something quite different. The goal was to tell the story of the evolution of progress over the past 100 years, drawing lessons from IBM’s history and times that would be useful not just to IBMers but to others in business, government and academia. Also, since many people still think of IBM as a computer hardware company, the book would reintroduce the company to the world. It’s now, essentially, a solver of complex problems.
The book, published in June in the United States and more recently in seven other languages, is Making the World Work Better: The Ideas that Shaped a Century and a Company.
To do the research and writing, IBM commissioned three journalists, Kevin Maney, Jeffrey O’Brien and myself. Mike Wing, IBM’s speech writer extraordinaire, was the editor. I believe that all four of us would tell you that making this book was one of the more interesting and intellectually challenging experiences in our careers.
Now we’d like to share the experience with you via the Making the World Work Better book club on Goodreads. From Nov. 28 to Dec. 9, we’ll be responding to questions from readers. The club is open to all IBMers, alumni and the general public. So please join us–and don’t worry if you haven’t finished the book yet.
How to join the club:
- Register for a free account on Goodreads.com or log in using your Facebook, Twitter or Google account information.
- On Goodreads.com, join the Making the World Work Better author Q&A group.
(note: if you are not logged in you may see the message “membership is restricted”)
Once you’ve joined, make the most of your experience:
- Discuss the book with other readers or add new questions for the authors.
- Invite others to join the group.
- Use the hashtag #IBM100book when you tweet about the book.
By Bettina Tratz-Ryan
Check out the Gartner blog, where this post was originally published.
Last week, I had the opportunity to attend the Smarter Cities event hosted by IBM in Rio de Janeiro in Brazil. My first experience was a visit to Rio’s Operations Center, built by the city and IBM as part of the city’s urbanization strategy to integrate 30 different agencies that manage the city and citizen’s services. IBM has built the first stage of the operations center as an infrastructure platform with the information management capabilities available. Each city has the ability to integrate those capabilities around their specific requirements of process alignment and data integrity. By building this center for Rio, IBM is moving its previously fully customized delivery of the smart city framework into a platform and service solutions model.
The operations center is focused in its core to provide a comprehensive emergency response system, implement crime prevention, detect and handle utility outages and traffic issues, resulting in safety and revitalization of different sections of the city. What I saw was equivalent to Mission Control Center NASA, a large wall full of different control screens, with feeds from over 400 video cameras and other sensors, as well as a map, with infrastructure outages and remediation activities. Operators from the different agencies were monitoring the screens, and based on the different scenarios, applied the appropriate standard operating procedures that determine activities and processes between the different agencies. What was really amazing though was the fact that, at this point, none of the operators really worked with the full capability of the integrated processes and data flows that proactively share and consolidate information between the agencies. Still, the center worked like clockwork.