Instrumented Interconnecteds Intelligent

Craig Hayman, General Manager, IBM Industry Solutions

By Craig Hayman

Since IBM launched its Smarter Commerce initiative two years ago, we’ve seen companies across industries transform the way they buy, market, and sell products and services.

Why? Because they’re learning that the consumer – and we’re all consumers – is increasingly in charge.

The term “Chief Executive Customer” comes to mind. More and more customers are using social networks, mobile devices, Web sites and influencers to make their buying decisions. There’s a digital explosion out there, and there’s no turning back. This is a $130 billion-plus market opportunity.

Marketers today continue to be confronted by a daily flood of customer data waiting to be sifted for nuggets of intelligence, everything from Internet searches to purchase histories to twitter comments. IBM research estimates that 2.5 quintillion bytes of data are created every single day – so much that 90 percent of the data in the world today has been created in the last two years alone.

That’s a pretty daunting statistic. The good news? As “Big Data” emerges as a prized asset for organizations to drive growth and innovation, the marketing department is becoming the wealthiest and perhaps most influential business unit. In fact, Gartner says that by 2017, the CMO will have greater control of the IT budget than the CIO. Big Data – and by proxy the CMO – will influence product development, supply chain operations and virtually every strategic area of an organization.

Slowly but surely over the last two years, we’ve seen leading companies as diverse as financial services and retail chains bringing IT to bear on marketing goals. CIOs and CMOs have stopped looking at their differences and instead are focusing on the benefits of their combined strengths for their organizations. And it’s not just marketing. Line-of-business buyers and non-technical teams are also taking matters into their own hands and achieving some impressive ROI through technology instead of relying just on the CIO., the Netherlands’ largest online retailer, developed a customized retargeting campaign that develops unique sales offers for consumers in real time. The cloud-based IBM Smarter Commerce solution tracks a potential customer’s browsing history, comparing their behaviors against established models. From this analysis, the company can then offer unique discounts and product recommendations through targeted banner ads and email campaigns. The company has experienced a 271 percent higher sales-per-send ratio for marketing emails, including a 23 percent higher open rate and a 68 percent higher click-through rate, and a 500 percent increase in the click-through rate for its banner ads.

Anheuser-Busch InBev (AB InBev) has transformed its global supply management processes with IBM’s cloud-based procurement solutions. Part of the Smarter Commerce initiative, IBM’s procurement solutions were deployed across AB InBev’s global enterprise – which includes operations across six geographic zones and a portfolio of more than 200 beer brands. This has enabled the company’s eSourcing strategy to achieve significant breakthroughs in supply chain visibility and efficiency. eSourcing enables AB inBev to ensure process consistency and auditability around the world with its supply base, helping the brewer complete more than 25,000 electronic auctions with beer suppliers such as grain millers, spice makers and bottlers, in seven different languages in one year alone.

These companies and many others are taking a Smarter Commerce approach to selling by gradually reorienting the entire business model — from how a company approaches innovation to how it designs its operations — based on deep customer and market insights.

If we’ve learned anything over the past two years, it’s that textbook marketing today is about understanding customers, meeting their needs, and doing so in a way that builds trust. CMOs have to piece together information that customers share in order to understand them on an individual level – as a “demographic of one.” Companies need to invent new ways to engage with people beyond merely selling products and services. CMOs also need to understand how a company’s values and purpose impact the brand and consider the company’s culture as part of their portfolio.

The true value with Smarter Commerce is connecting all the key processes such as marketing, sales, procurement, supply chain, and customer service to make the business flow smoothly and efficiently. One size does not fit all, however. IBM’s long-term strategy is to continue to develop and offer integrated Smarter Commerce solutions that address the specific buy, market, sell and service functions that make up the overall commerce process.

It’s this combination of Big Data, cloud, mobile and social business – all enabled by technology – that lies at the heart of better business performance for companies in 2013 and beyond.

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