2016 IBM Guide to Retail Technology Trends

Introduction

One of the greatest challenges in the retail industry today is the pace of technological change, and the ways in which new technologies are fundamentally changing how people communicate, research, collaborate with each other, and choose goods and services. This revolution has leveled much of the playing field relative to traditional sources of competitive advantage, and it is redefining what it takes for retailers to win in the marketplace. Retailers must find new ways to be relevant to tech-savvy consumers, to compete with disruptive rivals, and to embrace new operating and partnering models that may be required in order to grow profitably in the future.

IBM has long contended that there are three key mandates or imperatives for success in retail: a) Deliver a smarter shopping experience, b) Build smarter merchandising and supply networks, and c) Drive smarter operations. We discuss our point of view regarding these imperatives in greater detail in the IBM Retail Solutions Guide.

These three imperatives remain a useful framework for thinking about what it takes to be successful in retail. But the how behind these imperatives is changing dramatically, in great part due to the pace of technological change: how to deliver better experiences to customers; how to offer unique assortments; how to drive efficiency and reliability in the supply chain; and how to maintain consistent and cost-efficient operations across store and back office functions—all of this is in the midst of unprecedented disruption and transformation.

This disruptive transformation is what we explore in this guide.

There are several dynamics or levers of change in play with regard to this transformation. The first is Analytics — the rise of many new forms of analytics, including Cognitive Computing, to drive better understanding and more personalized relationships with the consumer, and to mine insights from the vast and exploding world of Big Data. In its exponentially increasing volume, variety and potential uses, Big Data is becoming a new ‘natural resource’. Insight into trends, customers and performance can be turned into new selling, marketing, merchandising and supply chain strategies that drive market share and margins.

The second dynamic is Cloud Computing: the delivery of IT and business processes as digital services. Cloud—the idea of ‘Anything as a Service’—is transforming all industries, through the unprecedented speed and agility it enables. Cloud can make it possible to inexpensively upgrade store, back office and omni-channel infrastructures, and to enable what we call ‘designing for digital readiness’, through the use of APIs to expose functionality and make access consistent across all touchpoints, for customers, suppliers, employees and business partners.

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The third dynamic is the rise of Mobile and Social Engagement. The ways in which the world’s people interact online, and connect with each other, have gone through a revolution. Mobile technologies— smartphones, tablets, location-sensing devices and the like—have made connectivity a constant and ubiquitous aspect of our lives. And as network access now extends to a growing ‘Internet of Things’, the physical world is uniting more fully with the digital and virtual worlds. Simultaneously, social networking has brought us all into much closer communication with each other, and with the businesses and other organizations and institutions in our lives.

For retailers, the impact of mobile and social technologies is huge: connecting with your customers as individuals, and providing information in-context and in real-time, can foster much more relevant relationships with them. And at the same time, using mobile and social to facilitate the working interaction of your employees, suppliers and partners can drive significant gains in efficiency and productivity.

The fourth dynamic is the issue of Security in a digital world. Not a profit center, and not a pleasant topic to think about, security is nonetheless becoming one of the most serious concerns of our time for retail CEOs. The uncomfortable truth is that the defenses businesses have in place to secure themselves and their customers’ data are often grossly inadequate, in comparison to the sophistication of today’s international cyberattackers.

Retail is one of the most exposed of all industries, due to the volumes of information it processes, the quantities of sensitive private data retailers are entrusted with, and the proliferating number of entry points to their networks and systems. A retailer’s data must be recognized for what it is: a ‘crown jewel’ that must be protected from all angles, with security established as a corporate priority that is governed by value at risk, not just by budget. Effective safeguards are indeed available to protect against intrusion, to quickly detect suspicious activity, and to mobilize resources so as to ensure containment and defeat.

This guide provides a quick overview of what we believe retailers need to address within each of these areas of technological transformation, and of the IBM solutions supporting that transformation.

IBM offers everything retailers need to keep pace with today’s transformations. We listen to what our retail clients tell us, and we design our offerings to address their needs, across roadmap development, solutions, infrastructure, research sciences and consulting. We help retailers deepen their relationships with their customers; we help them offer differentiated assortments to drive competitive advantage; and we help them achieve operational excellence, to support continued profitable growth.

Please contact your IBM representative to arrange for a briefing on any of the offerings in this guide.

Sincerely,

Your IBM Global Retail Industry Team

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Analytics

Potential Benefits

Better decisions that increase sales and margins

Improved customer satisfaction

Increased market share

Reduced operating costs

Why it’s important

Big Data is rapidly becoming a significant global ‘natural resource’ that now can be mined using advanced analytics so as to give new insight into any number of issues of interest to retailers. A sampler of the kinds of things Big Data could shed light on might include emerging consumer trends and product trends, the management of operational resources, the maintenance of equipment and physical plant, forecasting short- and long-term demand more accurately, and understanding individual customers much more intimately than has ever been possible in the past.

And now, with the advent of Cognitive Computing—systems that learn as they process information, and that interact in natural human language—dramatic new advances are in prospect to leverage these revolutionary capabilities so as to drive business value in ways never before seen. The vast world of unstructured big data constitutes easily 80% of the world’s data, but until now, it has been essentially invisible to IT systems. Social buzz, local news, local weather forecasts—these can now all be tapped and mined for relevant insights. Cognitive Computing constitutes a world-changing breakthrough here, by opening this unstructured information to automated interpretation and analysis—and applying it so as to make merchandising and offers much more relevant, on a localized basis.

To appreciate the implications here, let’s consider a case-study in how big data and analytics can drive value for retail. Everyone’s well aware that consumers are using today’s technologies very aggressively in their shopping. They want pertinent information and offers, delivered in a timely way: the right information, at the right moment, based on the shopping task they have defined for themselves at the time. In essence, consumers want retailers to treat them as if each were a unique ‘demographic of one’—a single individual who is, at any given moment, at a specific place in their own personal shopping process, and who should be related to in an informed and timely way by any retailer hoping to capture their business.

It’s no mystery why consumer demands are escalating like this, in 2016: it is because their recent experiences have convinced them that retailers can, in fact, provide this level of service, in a dependable and intelligent way. They know that the data now exists, and that the necessary analytics exist and are within reach. At any moment, within this universe of unstructured data lie all kinds of telltale clues about what individual consumers are shopping for, what their specific preferences are, who they are taking advice from, what their price sensitivity may be, and what they are likely to do next. These are clues from which a retailer might readily deduce what kinds of offers could be decisive in persuading them to purchase a given item from a specific source—and at the most profitable price.

Of course, the field of customer analytics is just one example of an arena in which leading retailers will mine insight and gain competitive advantage from analytics and Cognitive Computing, as applied to Big Data. We stand at the threshold of untold innovation in this broad realm, as competitors in many different industries will be inventing new ways to drive value from this rapidly expanding natural resource.

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Core Capabilities

All Data

• On premise • Cloud • External • Structured • Unstructured • Images • At rest • In motion

Turn information into insight

• Descriptive Analytics for operational reporting and planning

• Predictive Analytics to uncover patterns and trends

• Predictive Analytics to optimize decisions

• Cognitive Computing to interact with human users more naturally

IT Infrastructure

• Manage new workloads needed for big data and advanced analytics

• Leverage cloud computing for flexibility, scalability and reliability

• Develop a comprehensive approach to digital security

Establish an Information Foundation

• Access, store, archive and analyze many types and sources of data

• Process and analyze data in real-time

• Ensure the quality, availability and integrity of data

New Enhanced

Applications

Welcome to the Era of Cognitive Computing

Cognitive computing refers to systems that learn at scale, reason with purpose, and interact with humans naturally. Cognitive systems can make sense of the 80 percent of the world’s data that computer scientists call “unstructured”—which the world’s computer systems have been almost entirely blind to, until now. This enables cognitive systems to keep up with the volume, complexity and unpredictability of information and systems in today’s world.

None of this involves either sentience or autonomy on the part of machines. Rather, it consists of augmenting the human ability to understand—and act upon—the complex systems of our society.

For the Retail industry, the possibilities here are almost endless: systems that read incoming customer notes to assess them for urgency of response, or that ‘look over the shoulder’ of call center agents, while they interact with customers, to advise them in real time of key facts about the customer, what their shopping goals and preferences are, what their mood seems to be, and what path might be best to answer to or resolve their situation. Or, systems that even talk directly with customers, engaging them in natural dialog, in a sensitive, intelligent, and well-informed way.

Cognitive Computing is the next step in our ability to harness technology in the pursuit of knowledge, to further our expertise and to improve the human condition. That is why it represents not just a new technology, but the dawn of a new era of technology, business and society: the Cognitive Era.™

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Analytics

How we deliver it

To leverage new data sources, build Our analytics platforms include: • IBM InfoSphere BigInsights™

intelligence, and run a retail business more strategically, IBM offers a range of analytic capabilities, from platforms to prebuilt industry-specific solutions.

Our prebuilt industry solutions include:

• IBM® Demand Insight leverages Cognitive Computing to analyze social buzz, local news, events and weather data with other external and internal data sources to identify key demand signals and derive predictive insights

• IBM Social Media Insight leverages Cognitive Computing to provide a robust retail analysis of customer perceptions related to attributes like quality, convenience, and price—at the item level

• IBM Lift Insight leverages Cognitive Computing to provide advanced sales analytics to help understand the total revenue impact of individual products and product categories, including lift analysis and affinity analysis, so as to help improve your merchandising and assortment decisions.

• IBM Predictive Customer Intelligence (PCI) identifies your customers’ shopping patterns, preferences and behavioral drivers, and predicts the best way to deliver timely and relevant interactions with each.

• IBM Watson™ has ushered in a new era of Cognitive Computing— technology that can understand natural human language, processing information in a way similar to how people think, and learning as it gains access to increasing quantities of information. Cognitive Computing can make possible significant advances in an organization’s ability to quickly analyze, understand and react to vast quantities of diverse data.

• IBM Cognos® Analytics provides planning and business intelligence to understand how stores, channels, merchandise and marketing organizations are performing, and how they are contributing to overall business objectives.

• IBM Decision Optimization prescriptive analytics can make you more efficient by automating complex decisions and trade-offs around limited resources, to optimize supply chain design, supply networks and inventory levels, to fulfill on the promise of omni-channel retailing.

• IBM Data Warehouse (IBM PureData™) helps to organize, store and analyze various types and uses of data.

• IBM InfoSphere® Streams is an advanced analytics platform that allows user-developed applications to quickly ingest, analyze and correlate information in motion from various sources.

combines open source Apache Hadoop with enterprise functionality and integration to deliver large-scale analysis with built-in resiliency and fault tolerance.

To operate in the new era of big data and advanced analytics, the right IT infrastructure is essential. Retail CIOs must intelligently manage, store and archive data in the most cost-effective manner. Advanced technology platforms, such as the IBM PureSystems® family, efficiently consolidate and optimize the use of systems to deliver analytics. We take infrastructure up a level in performance by providing systems equipped to facilitate implementation of the analytics applications you need to run your business.

And, a range of improved deployment options can allow you to plan how big data initiatives will be run inside and outside your organization, including: on premises, in the cloud—public or private, as a service, or hybrid-a mix of cloud and on-premises. IBM SoftLayer® gives you the highest performing cloud infrastructure available, providing automated and efficient ways of optimizing and procuring computing capacity flexibly across many processes, and dramatically shortening development cycles. See the discussion of Cloud Computing in this booklet for more information.

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Selected IBM Offerings

Software solutions Consulting, Process and Implementation services

Managed services Infrastructure

Prebuilt industry solutions: • Marketing and consumer • Advanced analytics on IBM Power

• IBM Demand Insight

• IBM Social Media Insight

• IT Strategy and Performance Assessment

• Enterprise Architecture

analytics

• IBM Global Technology Services® team:

Systems™ and IBM z Systems™

hardware

• IBM PureData System for Analytics, • IBM Lift Insight

• IBM Predictive Customer Intelligence

Analytics platforms:

Assessment

• Application Portfolio Assessment

• IBM Business Analytics Jumpstart

• Customer Segmentation and Next

– Strategic IT outsourcing

– IBM Softlayer

– IBM Fiberlink® mobile device management on cloud

powered by IBM Netezza®

technology

• IBM Softlayer

• IBM Retail Data Warehouse

• IBM Watson Engagement Advisor Best Action – Backup and archive on the • IBM Watson Explorer • Shopper Behavior Analytics IBM Cloud

• IBM Watson Discovery Advisor • Media Asset Allocation – Managed Security Services

• IBM Watson Analytics • Trade Promotion Analytics • Through the IBM Global

• IBM SPSS® • Store and Workforce Performance Business Services® team:

• IBM Cognos Analytics Managements – Application management

• IBM Social media analytics • IBM Business Process – Application testing

solutions Management. Visioning and • Business process outsourcing

• IBM Decision Optimization Roadmap (BPO) record-to-report services

• IBM IoT Foundation

• IBM DB2®, Informix®, and IMS™

• IBM InfoSphere BigInsights

• IBM InfoSphere Streams

Case studies

Associazione Amici Via della Spiga

This luxury retailer uses IBM Social Media Analytics to uncover the driving factors behind fashion purchases and brand loyalty and to predict future customer behavior.

• 60 percent increase in brand reputation

• Improved allocation of time and money spent in individualized promotional efforts

• Reduced costs by identifying unproductive promotional methods

Castorama

This European DIY retailer implemented SPSS to predict which customers in each region are most likely to make purchases in specific product categories, to better target their promotions and customer outreach.

• Allowed the quadrupling of campaigns run for local stores and tripling of market-research surveys

• Increased customer loyalty

• Reduced marketing expenses

Patagonia

This outdoor gear supplier implemented IBM Cognos Analytics to streamline its budgeting process, and to monitor and forecast global inventory in detail

• Supports more detailed inventory planning down to the style and color of products, by geography

• Improves merchandising and supply analysis and planning

• Eliminates cumbersome administrative tasks and procedures

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Cloud Computing

Why it’s important

Technology continues to change how consumers shop. And, depending on the choices a retailer makes, information technology can either become a vital enabler of success—or a crippling impediment. To play its critical role in powering a profitable retail business, IT must be dependable, it must be secure, it must be flexible, and it must be as low cost as possible. At IBM, we’ve long been convinced that there are areas within a retailer’s IT structure where Cloud computing can offer clear advantages over other available approaches.

Cloud’s most fundamental advantage is that, if applications can be run on a shared set of computers, a very large amount of computing power can be made available to each application process, with that computing capacity being flexed on an on-demand basis to support the intensive bursts of processing that occur at different moments in the course of each process. This characteristic is known as dynamic scalability or elasticity. IBM’s studies have shown that approximately 85 percent of a retailer’s computing infrastructure may be idle at any given moment—an underutilization of resources that Cloud can go far toward remedying.

We think Cloud is becoming much more relevant, and of potentially greater value, than it has been even in the recent past. This is in part related to a broad-based need to make IT infrastructure more flexible and cost-effective, and also specifically to the ways that Cloud can be of use in supporting efforts to design for digital readiness through the wider use of APIs to expose functionality and make access consistent across all touchpoints. This is becoming ever more relevant with the proliferation of interconnected devices and the ever-increasing instrumentation of consumer lifestyles.

And as concerns around security continue to weigh on retailers, it bears noting that Cloud can be just as secure as other forms of IT architecture, even those that are maintained entirely within the firewall of a single enterprise.

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Potential Benefits

Improved IT responsiveness to business needs

Improved customer satisfaction

Reduced operating costs

IBM SoftLayer

Cloud computing is defined as the delivery of on-demand computing resources—everything from applications to data centers—over the Internet, on a pay-for-use basis.

Cloud computing doesn’t come out of the sky. It comes from physical hardware inside brick-and-mortar facilities, connected by hundreds of miles of networking cable. And cloud is not a commodity: no two clouds are built the same way.

Core Capabilities

SOFTWARE as a SERVICE • Commerce-as-a-Service • Digital Channel Services • Merchandise Analytics & Optimization • Payment Systems/Gateway

Highly configurable, multi-tenant software

PLATFORM as a SERVICE • Mobile & loT Development/

Mashups • BigData Analytics • Cloud Applications Development

“Born on the web/cloud” applications

INFRASTURCTURE as a SERVICE • Digital channel/e-commerce platform • Cross Channel Operations/DOM • Customer Analytics • Enterprise Marketing • Customer Care • DevOps, Continuous Delivery

Applications, benefiting from flex capability

ON PREMISE PRIVATE INFRA • Merchandise Planning • Finance • Master Data Management • Data Repositories & BI • Enterprise Integration • IT Ops Management

Typically custom, legacy applications

HOSTED PRIVATE CLOUD • Merchandise Operations • Product Development • Supply-Chain Optimization • Supply-Chain Visibility • Supply-Chain Logistics

Typically packaged applications

PROCESS as a SERVICE • Human Resources • GNFR/Indirect Procurement • F&A reporting

Managed processes, typically non-core retail functions

• Store POS • Store Ops/Systems

MicroCloud can bring cloud to the store

Interchangable

Dedicated and private to retailer

PaaS is typically built on top of IaaS

IBM SoftLayer® offers the highest performing cloud infrastructure available. It provides a single platform that takes data centers around the world, offering the widest possible range of cloud computing options, and then integrates and automates everything.

There are other cloud and hosting providers who adhere to traditional billing practices of charging customers for each and every communication their servers send or receive. With

SoftLayer, we do things differently. Our servers come with terabytes of outbound bandwidth included: 5TB for virtual servers and 20TB for bare metal servers. And, IBM does not charge for inbound traffic to our servers, nor do we charge for bandwidth usage across our Global Private Network. This allows our clients to build on a Global Private Network essentially free of charge, just by being a SoftLayer customer.

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Cloud Computing

How we deliver it

The journey to Cloud computing can take a number of different paths. Often retailers want to test out Cloud concepts by taking advantage of Infrastructure-as­a-Service for specific computing needs. This often yields valuable lessons that can then be applied towards broader usage of Cloud.

In many instances, retailers already know which IT workloads tend to be their biggest pain points: perhaps continuous development and delivery to support e-commerce and digital readiness initiatives, customer analytics, or development and testing environments to support business transformations such as e-commerce or merchandising and supply chain. IBM addresses these via specifically-tailored Cloud Managed Services for ERP or DevOps.

Often, retailers have a general sense that cloud could be beneficial to them, but are looking for a more measured analysis on how to approach this. In such a case, we begin with our cloud consulting services to identify quick wins; application workloads that can immediately benefit from cloud and then proceed to deploy our rapid migration techniques to move the application to IBM’s SoftLayer Infrastructure-as-a-Service. Depending on the application, these migrations can often be done in hours to days.

In parallel, we execute a detailed workload analysis of the retailer’s IT portfolio. By looking at applications, data sources, integrations, application-affinity, user-group interactions, SLA, connectivity and security needs, we identify logical groups of applications that are the most suitable candidates to

be moved to a cloud environment. Then, we develop a roadmap to operationalize the movement of application workloads into cloud environments, including private, public and hybrid. Gravitant enables companies to optimize computing services by brokering resources from multiple cloud providers and across hybrid clouds. These services as provided by mixed environments can now be integrated and managed uniformly and across environments, for improved performance and efficiency.

The move to Cloud computing is a journey, not a one-time-and-done affair. A part of IBM’s implementation approach is to empower the retailer’s IT organization to actively participate, while also offering fully-managed cloud services as appropriate.

IBM Bluemix® is IBM’s strategic cloud-based application development environment. Based on the open source Cloud Foundry project, Bluemix provides an open­standards-based platform for building, managing and running applications of all types, including web, mobile, big data, and smart devices.

Bluemix allows developers to easily compose new business applications without the need to code from scratch—so, what has previously taken weeks can therefore now be done in minutes. Web and mobile applications can be rapidly and

incrementally composed from services provided by IBM, the open source community and an ecosystem of partners. This means retailers can quickly develop, deploy, and continually enhance applications for consumers, employees, suppliers and other business partners.

Delivered as a platform-as-a-service (PaaS) model, Bluemix is offered via three models – public, dedicated, and local – to provide maximum flexibility to meet the client’s specific business requirements.

IBM Bluemix

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Selected IBM Offerings

Software solutions delivered via cloud

• IBM Presence Insights

• IBM Customer Experience Analytics

• IBM Commerce on Cloud

• IBM Marketing Cloud

• IBM Sterling Commerce® Order

Consulting, Process and Implementation services

• Cloud Strategy and Design

• Cloud Security Services

• Cloud Implementation – Retail Merchandising and Supply Chain

• Cloud Implementation – IBM Private Modular Cloud

Managed services

• IBM Cloud Managed Services™

for Oracle and SAP

• Managed Security Services

• IBM Recruitment on Cloud

• IBM Emptoris Spend Analysis on Cloud

• IBM Counter Fraud on Cloud

Infrastructure

• IBM Mobile Web Push

• IBM SoftLayer

• IBM Bluemix

• Gravitant

• CleverSafe

• StrongLoop®

Management and Transportation Management

• IBM Sterling B2B Collaboration Network

• IBM Emptoris® contract management

• IBM TRIRIGA® real estate management

• IBM Kenexa® workforce management

• IBM DevOps Services

• Cloud Implementation – Testing services on Cloud

Case studies

This video game retailer leverages IBM Bluemix to speed the pace of innovation and the development of prototype mobile apps.

• Provides a scalable, reliable platform for designing and developing new applications

• Reduces reliance on IT, through automating the set-up and hosting of environments

• Enables crowdsourced insights and innovation with leading universities and other partners

This luxury accessories retailer uses IBM Bluemix and the IBM Watson™

Personality Insights service to power its product recommendation system.

• Website traffic increased by 10%

• Customers spend 15% more time on website

• Increased customer satisfaction

This UK-based furniture retailer uses IBM Cognos® and IBM SPSS® on the SoftLayer cloud infrastructure to enable advanced analytics while reducing IT spend.

• Eliminated capital investments with SoftLayer cloud hosting platform that can scale for growth

• Reporting accelerated by 99%

• Rapid insight into customers aligns decision-making with corporate objectives

GameStop Roztayger LLC DFS

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Mobile & Social Engagement

Potential Benefits

B2B: Higher service levels

Great retention

B2C: Greater loyalty

Increase sales and margins

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Why it’s important

The ‘Era of Continuous Computing’ is upon us. With smartphones, tablets and other mobile devices proliferating everywhere, we can all stay in touch at nearly all times and places. And, as an ever-larger majority of consumers are using mobile devices worldwide, it becomes possible to paint a detailed picture of a person’s activities— and to infer a great deal about their interests and intentions of the moment.

For retailers, this truly changes the game: it enables real-time awareness, real-time understanding, and real-time personalized engagement and interaction. As consumers become more continuously connected, retailers who are competing to win must themselves become similarly connected and engaged, in real-time, with their customers.

Consumers now expect retailers to provide an online experience that is optimized for their mobile devices. They want shopping to be smooth, uncomplicated, and personalized, regardless of where they are or what device they may be using. They also expect speed and responsiveness when they do research, buy an item, or change an order. Since they are used to using mobile devices to get advice on products from their friends and social network, many now also want to be consulted by their favorite retailers on the co-creation and introduction of new products and services.

Retailers are just beginning to uncover the myriad ways that mobile and social capabilities might be used to drive increased sales, market share and customer loyalty. Inside the store, retailers need to invest in wi-fi and in related solutions that can use real-time information about exactly where shoppers are and what they are doing, to enrich the in-person experience with relevant digital content, and to drive more personalized one-on-one engagement than ever before.

And, mobile technologies can at the same time help retailers become more oper­ationally efficient. Tools that enable real-time communication can foster new forms of collaboration and education, and can make working relationships much closer and more efficient, such as between managers and employees, employees and their co-workers, and between employees and suppliers or other business partners.

Equipping your associates with mobile technologies is quickly becoming an imperative, including support for bring your own device (BYOD). Placing into their hands the most pertinent info on customers, merchandise, inventory and orders, across all channels and sources, will put your associates in a far better position to make the best decisions, and to deliver better customer service, higher sales, and improved customer satisfaction.

Core Capabilities

B2B and B2C Internal and External Usage

Applications and User Experience

• Customer Mobile Experience

• Mobile innovation and design

• Out-of-the-box Industry Solutions

Collaboration Platform

• Social software

• Realtime social communications

• Content management

Mobile Management

• Device, application and asset management

• Security

• Technical support, services and repair

Mobile Application Development Platform

• Application Development and Lifecycle Management

• Scalable Backend Services, including hybrid cloud

• Integration Services, including API creation and management

• Location-based Services

Apple + IBM

Apple and IBM have teamed to give business professionals the unique capabilities of iPhones and iPads, powered by the knowledge, data, analytics and workflows as defined by the individual enterprise.

Through our partnership, we are redefininge the ways that work is done, by addressing key industry mobility challenges and by driving true mobile-led business change, grounded in four core capabilities:

• A new class of more than 100 industry-specific enterprise solutions, all with native apps, developed exclusively from the ground up, for iPhone and iPad

• Unique IBM cloud services optimized for iOS, including device management, security, analytics and mobile integration

• AppleCare service and support offering tailored to the needs of the enterprise. IBM is the exclusive partner for delivering AppleCare

• New packaged offerings from IBM for device activation, supply and management

To transform the in-store retail experience, IBM and Apple introduced the Store Associate Suite with two new apps designed to enable enhanced engagement between

customers and sales associates. Using analytics, the Sales Assist and Pick & Pack apps will improve sales productivity by optimizing the shopping experience for customers through better empowerment of in-store sales associates. These apps will use real-time intelligence to direct associates to customers and allow them to provide real-time product, inventory availability and location information as well as to deliver personalized offers for customers, based on historical patterns and profile data.

The new IBM MobileFirst™ for iOS solutions have been built in an exclusive collaboration that draws on the distinct strengths of each company: IBM’s big data and analytics capabilities, with the power of more than 100,000 IBM industry and domain consultants and software developers behind it, fused with Apple’s legendary consumer experience, hardware and software integration and developer platform. The combination is creating apps that can transform specific aspects of how businesses and employees work using iPhone and iPad, allowing companies to achieve new levels of efficiency, effectiveness and customer satisfaction—faster and easier than ever before.

As part of the exclusive IBM MobileFirst for iOS agreement, IBM also sells iPhones and iPads with the industry-specific solutions to business clients worldwide.

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Mobile & Social Engagement

How we deliver it

We start with extending traditional back-office systems of record into the hands of your employees, empowering them with a great deal of new information and insight, so they can collaborate and make informed decisions in context, and in real time. This can revolutionize how they interact with customers, and how they collaborate with other employees and with suppliers and partners.

IBM MobileFirst™ lets you quickly develop, test and deploy quality mobile apps across multiple platforms, and easily integrate apps with your enterprise data, systems and services. Then, to accelerate development and create full-function apps, you need scalable backend services: mobile cloud services, including standard APIs, analytics for reporting and for insight on app usage, workflow for process automation, cloud storage for mobile data management, and app scanning for security. And, to optimize mobile performance, IBM Cloudant® provides local data for users who are offline and syncs as soon as connectivity is available.

IBM Mobile Application Content Manager enables marketers to engage mobile app users with personal and contextual content to influence action in

the moment. It does this by allowing non-technical business users to localize engagement by creating, managing and publishing content straight to the mobile applications without involving IT.

IBM and IBM Business Partners also provide a wide variety of out-of-the-box solutions, including Mobile Pick, Product Finder, and Suggestive Sell, that can give you a head start in accelerating your mobile transformation. IBM Mobile Push Notification provides a flexible, simplified environment for creating notification campaigns that engage mobile app users at the optimal time and place. In addition, Bluemix makes available many Watson cognitive services such as speech-to­text, text-to-speech, natural language translation, machine learning and the integration of powerful analytics like Personality Insights. In addition, IBM Presence Insights analyzes in-store shopping patterns, and can reveal patterns and variations that may shed light on customer preferences and operational issues.

And, to optimize the experience and detect unintended customer or employee obstacles or difficulties in using an app, IBM Tealeaf® automatically detects issues and provides recommendations

for improvements. It’s of course critical to make your mobile apps as engaging and value-add as possible. IBM Interactive, the world’s largest digital agency, teams with IBM Research to deliver innovative digital strategy and application design capabilities, to make your apps appealing and cutting-edge, whether they are for use by customers, associates or business partners. And, security is always a central concern with mobile apps. IBM MaaS360® Enterprise Mobility Management provides enterprise-class management and security for devices, apps and content, to protect your servers, databases, and IT infrastructure as mobile devices access them.

Becoming a social business means connecting employees, suppliers and other partners so as to enable superior information sharing that can improve productivity and profitability. IBM Connections Suite provides world-class social software, real-time social communications and content management. Among the many benefits delivered by these capabilities are relevant shopping and services for consumers, just-in-time education and insight for associates, and improved performance from suppliers and partners.

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Selected IBM Offerings

Software solutions

• IBM MobileFirst Platform

• IBM Connections

• IBM Presence Insights

• Fiberlink MaaS360

• IBM Security Access Manager for Mobile

• IBM Trusteer

• IBM Tealeaf CX Mobile

• IBM Mobile Push Notification

• IBM MobileFirst for Sales Associate Suite (including Sales Assist, Pick and Pack, Shift Sync, and Express Pay)

• IBM MobileFirst for Manager Suite (including Shift Track)

• IBM MobileFirst for Merchant Suite Associate (including Dynamic Buy and Order Commit)

Consulting, Process and Implementation services

• IBM MobileFirst Applications & Platform Services

• IBM Interactive Experience Workshop

• IBM MobileFirst Studios

• IBM Ready Apps

• IBM Business Process Management

Managed services

• IBM SoftLayer®

Infrastructure

• IBM Bluemix Mobile Cloud Services

• IBM Cloudant

• IBM Watson Cognitive Services

Case studies

This South Korean retail payment company leveraged IBM’s MobileFirst platform to develop a feature-packed mobile app for customer use.

• Enabled deployment of one of the world’s most advanced mobile payment apps

• Location-based features and scannable mobile coupons

• Reduced time to market and associated costs

This European footwear retailer chose IBM Connections social business software to equip store associates with robust iPad-based social apps at a reasonable cost.

• Associates equipped with iPad tablets at 500 stores

• Improved business processes, productivity and employee engagement

• Fosters greatly increased collaboration and knowledge sharing, while boosting employee job satisfaction

This US sports apparel retailer used IBM MobileFirst to develop its new loyalty program mobile app.

• MobileFirst allowed the app to be deployed to all device types without the need for multiple versions

• Enhanced the existing mobile commerce platform by provided new features including Message Center, Product Scan and (Product) Release Dates

• Deepened the understanding of the customer, informed enterprise decisions and encouraged loyalty and sales

Lotte Card Co. Ltd HR Group The Finish Line

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Security Why it’s important

It seems that every year, the technology landscape experiences a tectonic shift. With each new technology and touchpoint comes new IT security concerns: new data sources, new kinds of devices and applications, and the expanded use of social networks, collaboration tools and cloud computing. And with all this comes the threat posed by those who will attempt to prey upon businesses and consumers, to steal and disrupt.

Potential Benefits The sophistication and scale of malicious attacks, as well as their sheer destructiveness, is growing dramatically. While the news of the latest attacks has come to seem almost routine, the costs are in fact staggering: the average total cost of a data breach in 2014 was US$3.5 million worldwide, up 15 percent overReduced risk the previous year, and in the United States, the average cost is higher—estimated at US$5.85 million. And the issue is particularly acute for retailers, because private

Lower operating costs consumer and credit card data is at stake. Without sufficient safeguards, your brand, reputation and even your future in business may be at stake.

Higher customer confidence, And retail is one of the most exposed and vulnerable of all industries, due to theincreased sales volumes of information and transactions retailers process, the quantities of sensitive private and financial data they are entrusted with, and the proliferating number of entry points to their networks and systems. Retailers who have already been victimized will testify that a major data breach is an extraordinarily disruptive and damaging event—disruptive to the business, disruptive to customer relationships, and enormously destructive in terms of public image and reputation, as well as in direct costs.

In the face of such mounting dangers, many retailers are deciding that security now merits the involvement of the full C-suite, to establish it as a serious organizational priority. Only with the participation of the most senior leaders can the right tone be set, with an effective governance model put in place to ensure that the right practices are adopted and adhered to across the entire enterprise. These indispensable measures are very unlikely to be achieved if the matter of security is delegated primarily to a chief information officer (CIO) or chief information security officer (CISO).

With the right safety measures in place, retailers can place themselves in position to reap the benefits of the latest interactive technologies, so to engage with shoppers in a dependably secure way, while also raising employee productivity and shielding the organization from intrusion and from possible reputational damage.

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Core Capabilities

Detect Threats

• Continuously search for patterns

• Advise of threats

• Contain intrusions before they do serious harm

Prevent Attacks

• Defend every network access point

• Impede breaches and isolate threats

• Protect sensitive data

Respond Continuously

• Effective process controls

• Rapid response mechanisms

• Quick action when breach occurs

According to Gartner, by 2020 there will be nearly 26 billion devices in the ‘IoT’, including every imaginable category of appliances, equipment and gadgets.

The import of all this is only gradually unfolding, and will no doubt include more than a few surprises.

Perhaps the most fundamental implication is around the exploding range and volume of data these devices will produce.

First of all, the IoT will produce vast quantities of new data on the operation of these devices themselves. For business, this will be of untold use in improving asset performance management, such as reducing downtime, lowering operating costs, and improving performance. Retailers can be expected to benefit from improved visibility to key equipment like HVAC, food refrigeration, vehicle fleets and other major mechanical components.

Secondly, these devices will shed enormous new light on their users—what people are doing, how they are feeling, what their intentions may be, and many other dimensions of insight into human activity. Healthcare will experience a revolution, as it becomes possible to monitor a patient’s vital signs and other indicators, during the course of their ongoing daily life.

For retailers, it will become possible to access a much richer understanding of consumers, in their habits, preferences, and shopping activities. The exact forms this will take are yet to be determined, and will no doubt evolve indefinitely in the future. What is clear is that your organization’s need to send, receive, gather, analyze and respond to data from connected devices will expand exponentially, with some of this needing to be processed in real time.

And, as consumers embrace more interconnected devices, they will likely move towards investing in ‘systems’ of linked devices, which will work together to simplify and enhance their lives. These future moves towards families of interconnected devices will likely become a significant factor in terms of merchandising, marketing, and relationship-building with consumers.

No doubt, some retailers will be in the forefront in finding ways to drive competitive advantage through the insights they can gain from this new data. The IoT therefore can be expected to add substantially to the growing realm of Big Data, which will need to be processed and analyzed by retailers. And, in addition to increasing a retailer’s analytical workloads, the need to leverage this data is likely also to pose additional potential security challenges.

The Internet of Things (IoT)

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Security

How we deliver it

At IBM, we’re convinced that the retail industry must address the challenge of digital security in a long-term, strategic way, using a combination of hardware, software and services. Together, these comprise a comprehensive and robust set of tools and best practices designed to frustrate intruders, mitigate attacks and protect your organization. When employed consistently, they address security issues effectively, through early detection, removal and remedy.

It all starts with leadership and awareness. An IBM Cybersecurity Executive Awareness Briefing can help educate top executives on the latest attack methods and defenses, the role of social media, and on advanced technological and operational defenses. This briefing can also help you define quick actions that can be taken to immediately strengthen your existing defenses.

The IBM Security Maturity Benchmark Assessment can evaluate the effectiveness of a retailer’s overall security posture, using verified data to compare your posture with those of peer organizations. This assessment can highlight where a retailer is strongly defended and where it is vulnerable, and can provide the basis for a strategic plan of action around security enhancement.

Prevention remains a vital frontline element of an effective security strategy. You require real-time protection that can frustrate attacks and disrupt attack chains. IBM Threat Protection System breaks critical points in the attack chain with preemptive defenses on both the endpoint and the network. Through its unique behavioral-based approach, we detect and prevent even unknown attacks, including those utilizing advanced malware. IBM Trusteer Apex™ blocks the installation processes related to malware, in order to stop malware at the point of infection. IBM Security Network Protection disrupts the malware lifecycle by detecting

existing malware on the network, and by blocking command-and-control traffic to malware websites, which may attempt to send further instructions in continuation of an attack.

IBM QRadar® Security Intelligence Platform products provide a unified architecture for integrating security information and event management (SIEM), log management, anomaly detection, incident forensics, and configuration and vulnerability management. QRadar can detect threats that other technologies miss, by performing advanced analytics and by anomaly detection such as spotting traffic spikes on off-hours, or repeated login attempts, all across a wide range of data and network traffic. And it can deliver security intelligence on-premise, as well as in cloud environments.

IBM Security X-Force® Threat Intelligence uses the latest evolving information on potentially malicious IP addresses, including malware hosts, spam sources and other threats, to enable you to respond proactively.

IBM Fiberlink MaaS360 can help you balance engagement, productivity and data security by managing all your users, devices and data from a single console that provides instant visibility into who is connecting to your data and via which devices. With it, you can

manage and secure all devices: desktops, laptops, smartphones, tablets, and whatever comes next— including support for a bring-your-own­device (BYOD) policy for your employees.

IBM Endpoint Manager streamlines remediation tasks by automatically managing patches to hundreds of thousands of endpoints, including the latest mobile devices, and also by providing integrated reporting for real-time monitoring of patch progress.

Today, it is no longer a matter of whether an organization will be breached, but a question of when, and how much damage will be caused before an intrusion is caught and mitigated. You need the ability to respond extremely quickly once an incident is detected. The IBM Threat Protection System provides capabilities to quickly investigate breaches, and to retrace attack activity so as to learn from these findings and remediate weaknesses.

Understanding the magnitude and nature of a security breach can be challenging, especially with limited resources or a lack of in-house forensics expertise. IBM Emergency Response Services can supplement your in-house resources by providing immediate guidance and support in the event of a serious security incident.

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Selected IBM Offerings

Software solutions Consulting, Process and Implementation services

Managed services Infrastructure

• IBM InfoSphere Guardium® • Cloud Offerings (SaaS, BPaaS, • IBM SoftLayer

• IBM QRadar Security Intelligence • Database Vulnerability Assessment PaaS, IaaS)—SoftLayer • IBM POWER8™, System x, Platform • IBM Cybersecurity Executive • Outsourced or Managed z Systems

• IBM Trusteer Apex Awareness Briefing Security Services • PureData for Analytics

• IBM Security SiteProtector™ • IBM Security Maturity Benchmark • IBM X-Force • For storage: IBM DS88xx, IBM System Assessment • Surveillance Application (GTS) XIV®, IBM Storwize®

• IBM Security Access Manager • IT Security Services for: Cloud, • IT Managed Services: security,

• IBM Network IPS

• IBM zSecure™ Suite; IBM

Application, Data, Emergency response, Identity and access management

mobile, network

• IBM Threat Protection System

InfoSphere Guardium Database Activity Monitoring

• IT Risk, Fraud, Security consulting, governance and compliance

• IBM Emergency Response Services

• IBM InfoSphere Guardium Encryption Expert

• PCI Security

• IBM Tivoli® • IBM Security Operations

Optimization Services • IBM Endpoint Manager

• IBM Security AppScan®

Case studies

Home Shopping Network

This US retailer is reducing its security auditing costs by implementing the IBM QRadar Security Intelligence Platform.

• Reduced security audit cost by more than 50%

• Expected to increase revenues and create new revenue streams by providing a secure environment for developers to create new services and capabilities that tap into customer data

• Reduces the risk of data privacy breaches by concentrating private data in secure, tamper-proof appliances

Ahold Europe

This supermarket retailer engaged IBM to implement an integrated store portal using IBM Security Solutions and IBM WebSphere software.

• Improved employee efficiency by securely optimizing their accessibility to key information

• Reduced the cost of its store performance management process

• Improved workforce management, increased employee efficiency and reduced administrative burden

An International Retailing Group

This international retailer upgraded its security access management environment to protect user access and improve efficiency using IBM Security Access Manager.

• Implemented protection against new security threats

• Reduced cost 30-40% annually

• Increased flexibility of security infrastructure

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IBM’s commitment to the retail industry IBM has more than 4,000 professionals focused on the retail industry around the world as well as one of the largest global networks serving retail, with almost 2,000 IBM Business Partners.

IBM’s preeminence in the development of leading industry solutions is the direct result of our strong commitment to research and development. We invest more than USD6 billion annually in R&D, and for 22 consecutive years have been the world’s leading patent-earning organization. IBM earned 7,534 patents in 2014 alone.

IBM Analytics IBM Analytics enables anyone to engage with data to answer the toughest business questions, uncover patterns and pursue breakthrough ideas. Retail-specific, advanced analytic solutions help retail organizations transform insight into action.

IBM Cloud IBM cloud solutions includes infrastructure as a service, software as a service and platform as a service offered through public, private and hybrid cloud delivery models. By leveraging the power of agile cloud development, organizations can make faster and better business decisions with total visibility and control.

IBM Commerce IBM Commerce solutions helps you understand and engage with customers on a deeply personal level and build the synchronized, predictive value chain you need to deliver not just products, but extraordinary experiences.

IBM MobileFirst Combine the power of enterprise data and analytics with an elegant user experience to redefine how you empower your retail organization to interact, learn, connect, and perform.

IBM Security Our security software and services help clients protect against advanced threats, fraud protection, identity and access management, and leading application, data and infrastructure security capabilities.

IBM Watson IBM Watson, a cognitive system that enables a new partnership between people and computers that enhances, scales and accelerates human expertise. IBM Watson Analytics brings intuitive visualization and predictive analytics to every business user. IBM Watson Ecosystem developers and partners can embed cognitive computing APIs (application program interfaces) into their cloud-based applications to deliver innovative Watson-powered retail industry solutions.

© Copyright IBM Corporation 2016

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Produced in the United States of America January 2016

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This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates.

The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions.

THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON- INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.

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