IBM is announcing a “smarter commerce” initiative today to make it easier to figure out what consumers really want and then get vendors to give it to them. If it works, IBM will be able to attack a $70 billion market.
It’s probably no accident that IBM is announcing this initiative today, since arch rival Hewlett-Packard is also expected to outline its strategy on Monday in San Francisco.
The whole point is to react to the changing dynamics of commerce, so that businesses offer relevant products and services to customers. The company wants to help its customers work more efficiently, using data analysis, community, collaboration, and process so they in turn can interact more efficiently with their own customers.
The modern approach means bringing social media and cloud analytics to bear on real-time customer relations. IBM has worked on the broader approach for the past decade. But this time the company says it is reaping the benefits of recent research and development on its WebSphere Commerce platform and $2.5 billion invested software and services via the acquisitions of Sterling Commerce, Unica and Coremetrics.
IBM notes that 70 percent of a customer’s first interaction with a product or service takes place online. About 64 percent make a first purchase because of a digital experience. IBM says there has been a profound power shift from the seller to the buyer in the online world, but few companies are behaving as if they realize this. Selling is not so much a traditional function as it is an ever-evolving set of services they have to provide to their customers in order to keep their loyalty.
“It’s a buyer’s world now,” said Craig Hayman, General Manager, IBM Software Industry Solutions. “Businesses require a tighter and highly responsive network of suppliers and partners to ensure they deliver the right product or service at the right price, time and place.”
The key to surviving in this environment is predicting trends and automating market responses. IBM said that a recent survey by the IBM Institute for Business Value of more than 500 economists worldwide estimated that much of the $15 trillion in system inefficiencies on the planet comes from waste in inventory backlogs, failed product launches, wasted materials and ineffective marketing campaigns.
This whole idea might be some new marketing fluff. But the web and social media continue to bring disruption to business as usual. So it seems like Big Blue is on the right track when it says it’s time to be smarter.