During her keynote speech earlier this week at the National Retail Federation's “BIG Show” in New York City, IBM Chairman, President and CEO Ginni Rometty told attendees that information will be the basis for competitive edge in the retail industry.
“This isn’t just an era of new technology, it’s a new era of commerce,” Rometty said.
Rometty predicts a new era of commerce will commence as retailers leverage in-store and online strategies through cognitive systems that will allow brands to build relationships and trust “like you never did before,” while enhancing the customer experience.
In her keynote speech, “A New Era of Value,” Rometty said that 80% of the world’s data has been created in the past two years. As she discussed Big Data’s powerful potential, she cited three ways retailers can use this data to shape better, more insightful relationships with customers:
Descriptive analytics, which offer a picture of a company’s current status, such as product portfolios, market segments, or customers
Predictive analytics, which model possible outcomes of initiatives and market trends
Prescriptive analytics, or sophisticated models that recommend next steps based on analyses across complex criteria and data
“This will be taking to the edge how you engage customers,” she said.
Rometty said Retailing 2.0 is all about unstructured data such as social media.
“Now it’s about prediction, scale, real time, and precision,” she said. “Mobile is everywhere. More people have cell phones than have running water. Structured data are things that fit in rows. Unstructured data are things like pictures, videos, tweets blogs, and location data. Information will be the basis for competitive edge and how you engage with your customers. Technology moves from the back office to the front, from efficiency to engagement.”
Rometty used Kohl’s as an example of a retailer testing real-time, personalized offers to customers while they shop.
“Customers are more likely to respond to an offer at the moment of purchase and when they’re shopping,” Rometty said.
In light of the Target data breach, Rometty spoke about how vitally important security and trust are and will be for both retailers and customers.
“Brands have to be authentic and transparent,” she said. “Tell people what data you collect, and individuals must be able to control their own data.”
Security, freedom, privacy, and convenience will be four imperatives for brands and customers alike.
“What’s at stake is your most precious asset, your brand,” she said. “Trust is also about compliance. Trust comes from behavior. I’m excited about a new era of value. But there are serious policy concerns around security and trust. You’ll never be able to outsource things like trust.”