Executive Briefings

Incorporating Consumer Behavior Into Retail Decisions

IBM has extensively studied consumer behavior patterns over the past three years, most recently with a survey of 30,000 consumers across 13 countries. Cynthia Coulbourne, global retail portfolio leader at IBM, says consumers are becoming increasingly positive about their financial situation, but they still are not returning to pre-recession spending habits. "Spending still is focused on needs, with other purchases being delayed," she says.

The survey also indicates that "what you see is not necessarily what you get, in terms of shoppers," Coulbourne says. She notes that many households now consist of several generations and shoppers may be buying for their parents or for grown children or grandchildren. "If a retailer looks at data from a loyalty program, it may be hard to know what the information really represents," she says.

A third major trend is the incorporation of technology into consumer behavior. "This recent survey shows that average consumers are using two or more technologies in the shopping process. They may use the internet at home or at work to look for products, then in the store they use mobile phones to take and send photos of products and to compare prices online, Coulbourne says. Additionally, only 62 percent of survey respondents said they prefer to take delivery of their purchases in a store. "That means 40 percent want to take ownership and possession in some other way," she says. "That can be a problem because the entire supply chain for a majority of retailers is focused on delivering goods to the store."

IBM has identified five core competencies that retailers need to develop, in light of these survey results, says Coulbourne. They are:

• Capture the right data - not only the data needed to run the business but also data that gives visibility to inventory levels and to consumer behavior.

• Convert that data into useable information and consolidate it in a central repository, accessible to various channels and partners.

• Analyze the data to get consumer insights with which to align products and services.

• Integrate planning and execution so that cross-functional plans are aligned in support of the same targets and performance can be monitored and measured against an aligned plan.

• Develop agile supply ecosystems that enable close coordination and response between all supply chain partners.

To video in its entirety, click here

IBM has extensively studied consumer behavior patterns over the past three years, most recently with a survey of 30,000 consumers across 13 countries. Cynthia Coulbourne, global retail portfolio leader at IBM, says consumers are becoming increasingly positive about their financial situation, but they still are not returning to pre-recession spending habits. "Spending still is focused on needs, with other purchases being delayed," she says.

The survey also indicates that "what you see is not necessarily what you get, in terms of shoppers," Coulbourne says. She notes that many households now consist of several generations and shoppers may be buying for their parents or for grown children or grandchildren. "If a retailer looks at data from a loyalty program, it may be hard to know what the information really represents," she says.

A third major trend is the incorporation of technology into consumer behavior. "This recent survey shows that average consumers are using two or more technologies in the shopping process. They may use the internet at home or at work to look for products, then in the store they use mobile phones to take and send photos of products and to compare prices online, Coulbourne says. Additionally, only 62 percent of survey respondents said they prefer to take delivery of their purchases in a store. "That means 40 percent want to take ownership and possession in some other way," she says. "That can be a problem because the entire supply chain for a majority of retailers is focused on delivering goods to the store."

IBM has identified five core competencies that retailers need to develop, in light of these survey results, says Coulbourne. They are:

• Capture the right data - not only the data needed to run the business but also data that gives visibility to inventory levels and to consumer behavior.

• Convert that data into useable information and consolidate it in a central repository, accessible to various channels and partners.

• Analyze the data to get consumer insights with which to align products and services.

• Integrate planning and execution so that cross-functional plans are aligned in support of the same targets and performance can be monitored and measured against an aligned plan.

• Develop agile supply ecosystems that enable close coordination and response between all supply chain partners.

To video in its entirety, click here