Special Feature:
MOBILITY
And the Future of Shopping


Do you have a smart phone? Are you already using it to shop?
Sweeping changes are coming to the shopping process
that are empowering consumers as never before --
even as they create new opportunities for forward-thinking Retailers

First, a Bit of History:
Can You Even Remember the Pre-Cellphone Era?

In case you need reminding about how recently mobile devices took over the world, here's a quick look back:

• Flashback: 1991-- Mobile phones are an expensive business tool used by some executives, and an out-of-reach luxury for most everyone else. Functionality is limited to voice calls

• Flashback: 2001-- Mobile phone use has exploded and become affordable for middle-class people throughout the developed world. Functionality is still limited to voice calls and text messages

• Today: 2011-- Mobile devices reach unprecedented levels of penetration throughout the world, becoming common amongst even the poor in developing countries: at the moment, in India alone, 15 million new cellphone users are being added each month

(New York Times 11/3/2010) -- And the use of smartphones takes off: devices that feature access to the internet and other
information sources, and that leverage a vast universe of applications to put all kinds of real-time
information and functionality into the hands of users

The rapid adoption of smartphones that's now taking place means that the device that used to be just a wireless telephone has morphed into a multidimensional, real-time communications platform -- a tool for accessing the internet and many other information sources, anytime, anywhere you may be.

This is what we mean by the term Mobility.

Mobility is sure to transform all kinds of personal activities, as we find ways to leverage all this newfound functionality in untold situations and contexts. And one of the most important activities it is already transforming is the act of shopping.

How Mobility Is Transforming Shopping

The full impact of Mobility on the shopping experience is only still emerging, but it's already clear that consumers who have smartphones want to use them to shop:

• 75% of smartphone users are already using them to locate stores

• 71% of smartphone users are using their mobile devices to check and compare prices

• 66% want to check on current stocks of a given item in a store -- before they make the trip

• 66% want to receive promotions on their mobile phone

(source: IBM 'Smarter Consumer' IBV Study)


What's more, shoppers who are already using Mobility already know they want to use their devices in many other ways, as well. They also want to:

• Obtain detailed product information, including ratings and reviews, while they're shopping

• Have their mobile device automatically find item locations in the store, i.e., lead them to what they are looking for

• Have Retailers provide them with relevant offers and promotions, based on their interests and needs

• Be able to pay for items / go through checkout via their mobile device

(source: The Shopper-Centric Store: 7th Annual RIS News/IHL Group Store Systems Study, Jan 2010)

Keep in mind: what's listed here is only some of what shoppers already knowthey want to do via Mobility -- This list is bound to grow as new ideas keep emerging.

And it's already clear that, beyond any specific use of mobile devices in shopping, Mobility is poised to have an even wider, more profound impact -- that of transforming the nature of shopping itself...

Consumers are already using Mobility to deconstructthe shopping experience -- allowing them to conduct elements of their shopping activities outside traditional bounds of time and place. What that means is that Mobility is even now erasing the boundaries that have previously existed around shopping.

Shopping is no longer a separate, discrete activity as in the past, but is becoming pervasive and omnipresent -- woven into all kinds of other activities, throughout the course of our daily lives.

Soon, most of us will be doing bits and pieces of our shopping at random intervals throughout our day -- finding out what products are available, finding out what others are saying about different products, finding out where we can see it in person and who sells it the cheapest -- interspersed amongst all the other myriad work, errands and recreational activities we're otherwise doing.

Whenever a thought occurs to us about something we're thinking of buying, regardless of where we are or what else we're doing at the moment, our Mobile devices will allow us to take action right then and there to advance our shopping process another step towards a purchase.

What Does All This Mean For Retailers?

No question, the rise of Mobility poses a major threat, and a major opportunity, for Retailers.

First, the threat.

Without question, Mobility is furthering the shift of power from Retailers to Consumers. Shoppers have access to more information -- on products, prices, the candid opinions of others on merchandise and on Retailers -- than ever before, and they are using this knowledge to drive more value out of the shopping process. A key concern that many Retailers have these days is that consumers tend to be better informed about merchandise than even their own Store Associates are, making it harder for store personnel to support and influence the shopping process.

Second, Mobility is further blurring the boundaries between Retail and other industries. With the instant/everywhere access to information and shopping alternatives that Mobility provides, it creates new openings for non-Retailers to cut the Retailer out of the shopping process and let consumers buy directly from CP companies and others like the handset providers and the operators of the mobile networks themselves (known as Mobile Network Operators, or MNOs). This process of eliminating traditional participants from the supply chain leading to the consumer is called disintermediation, and the likelihood that others will seek to disintermediate Retailers and steal their customers is a growing threat with the rise of Mobility -- If Retailers don't leverage Mobility to serve their customers better, lots of other companies are ready to step in.

So, what opportunities does Mobility present to Retailers?

For starters, shoppers are eager for Retailers to participate in the Mobility revolution -- they want to interact with their favorite Retailers via their mobile devices. Many of the 'like-to-be-able-to-do' items in the list above are things that are dependent on Retailer support: things like checking on real-time in-stock status for an item in a given store, having a Retailer provide them with customized promotions and offers based on what they're shopping for, and using their smart phone to locate an item in a store and go through checkout.

Mobility also has a number of obvious uses to improve store operations and make store associates better at their jobs: Retailers can equip their selling staff with mobile devices that put detailed product info and expert support at their fingertips, so as to increase store associate knowledge and make them more effective in influencing the purchase decision process. Retailers can also use mobile devices to support workforce and labor management, so that real-time communication of tasking can be delivered to each associate via mobile device while they're on the selling floor, eliminating the need to check in repeatedly at the manager's office or backroom.

Beyond the opportunity to curry favor with customers by supporting the functionality they want, Retailers need to recognize the huge underlying opportunity to deepen their relationships with customers: in exchange for supporting the Mobile functionality consumers want, smart Retailers will be able to harvest an immense quantity of new and insightful data on individual customers, which will allow them to interact with them in a personalized way, and differentiate the resulting shopping experience in ways that will drive dramatically higher value for both the Customer and the Retailer.

The opportunity here is to enhance individual Customer relationships, drive much higher loyalty, and enable these Retailers to capture an increasing share of wallet -- at the expense of their slower competitors.

But so far, most Retailers haven't been very aggressive in investing to establish support for Mobile functionality. Those Retailers who do so in the near future are going to gain favor and advantage over competitors who delay. And those who fail to respond in a timely way to the Mobility challenge will likely find themselves losing ground not just to their Retail competitors, but will also be disintermediated by other, non-Retail services that are already stepping into the arena aggressively... Google Shopper is just one obvious example.

So, What Does IBM Have to Offer Retailers
With Regard to Mobility?

IBM has a variety of capabilities, solutions and assets in different stages of development and deployment:

• Consumer Mobility -- this is functionality designed to be accessed via the consumer's mobile device, to support/enhance the shopping experience

Examples of IBM offerings in the area of Consumer Mobility:

• Mobile Web -- allows shoppers to access product information and other information and capabilities via the Web site (IBM WebSphere Commerce, IBM Mobile Portal Accelerator)
• Store Presence -- identifies a shopper as they enter the store (IBM Research asset)
• Inventory Availability -- helps customers find a store that has the item in stock (Sterling Commerce)
• Mobile Coupons -- Delivers relevant offers to individual consumers via SMS (WebSphere Commerce)
• Mobile Wallet - allows consumers to store coupon, offer and payment information (IBM Research)
• Shopping List -- enables consumers to build and save their shopping lists online and via their mobile device (currently under development)

• Store Associate Mobility -- this is functionality designed to be used by store personnel, via mobile devices, to improve customer service and increase workforce productivity

Examples of IBM offerings in the area of Store Associate Mobility:

• Stock Visibility and Out-of-Stock Ordering -- enables store personnel to determine the availability of an item and order the item from other stores or locations (Sterling Commerce)
• Mobile POS -- enables store associates to execute transactions from a mobile device in support of a customer transaction (enabled through partners such as Global Bay and CrossView)

• Broader IBM services and offerings that support Mobility:

• Enterprise Mobility -- services to manage a company's population of employee-issued smart phones / mobile devices (GTS)
• Mobile Device Management Services -- comprehensive support for mobile devices, including Help desk, break/fix, etc. (GTS)
• Smart Chip Management Services -- full lifecycle management of user ID and chip sets / SIM cards
• Mobile Web / Mobile Application Development -- development of custom mobile applications or mobile enablement of existing applications (GBS)

Note that these IBM offerings are at varying levels of development and deployment -- please contact Craig Stevenson for more specific info on a given offering.

How Can I Find Out More About IBM's Mobility Offerings?

Contact:

Craig Stevenson
Portfolio Leader, Global Retail Industry
Smarter Shopping Experience
craigs1@us.ibm.com
925-277-5205
(USA)