Company Advises Retailers to Turn Connected Consumers Into Advocates


NEW YORK, NY -- (MARKET WIRE) -- 01/14/07 -- NRF 96th Annual
Convention & EXPO 2007 -- In a new IBM (NYSE: IBM) national survey on
the heels of the 2006 holiday shopping season, consumers said that
influences such as the Internet, peer recommendations and instant
feedback via text messaging increasingly helped determine where they
shopped and what they bought.


While price remained a key factor with seven in ten consumers, 53
percent of the 1,000 consumers surveyed said they used the Internet to
compare product features and prices across retail outlets. According
to the survey, advertising influenced about 36 percent of purchasing
decisions.


In addition, friends and family continued to influence buying
decisions with 24 percent of consumers identifying them as a factor.
Interestingly, one in 10 consumers reached out to friends and family
via text messages as they shopped to get input or share information on
products.


In a complementary IBM research study released today, IBM recommends
to retailers that catering to these informed and connected consumers
can be a means to differentiate themselves in the competitive retail
marketplace. The study, titled "Turning shoppers into advocates: The
customer focused retail enterprise," suggests transforming traditional
retail business models by putting consumers at the center of
strategies and operations. Traditionally, retailers have operated
their businesses with an internal focus on their core operations that
is product-centric.


"Retailers understand the need to have stores create efficiency in
their supply chains and innovate in their merchandise offerings," said
Fred Balboni, IBM Global Retail Industry Leader, IBM Global Business
Services. "The next generation of growth in the industry is going to
be defined by a retailer's ability to overlay the customer dimension
onto those strategies. Shoppers' expectations of service are very high
and retailers who can attract and establish loyalty with their most
profitable customers will reap the rewards."


The IBM research paper details a number of core capabilities retailers
can embrace in their quest to become customer focused. Among them was
the need to develop "Associate Commitment" to better satisfy
customers. The importance of having motivated employees was reflected
in the IBM holiday survey findings where 50 percent of consumers
surveyed indicated that they avoided specific retailers during the
2006 holiday shopping season because of unhelpful employees. On the
other hand, 72 percent of consumers identified "helpful and
knowledgeable associates" as the number one characteristic of
retailers that provided them excellent customer service during the
holiday season.


IBM also identified "Multichannel Execution", which is seamless
coordination across all the ways customers buy products, as another
important capability for retailers. Multichannel convenience is
important to customers as an overwhelming 84 percent of consumers
reported they prefer to shop at retailers with streamlined processes
between online and physical stores.


Leveraging "Customer Insight" to offer "Tailored Offers" and
"Personalized Dialogs" also are called out by IBM as key
characteristics of customer-focused retailers. Clearly these are
priority areas for consumers as 89 percent said they want stores that
understand how they shop today but also can adapt to their needs as
they change over time. Also, 84 percent of consumers said one way to
meet their expectations is with products and services customized to
their individual preferences.


As part of its ongoing consumer research efforts, IBM is also making
available a recently completed analysis comparing the shopping
preferences of teenagers and baby boomers, titled "Retail
opportunities in a world of extremes: Understanding today's teens and
boomers." This study and a free executive summary of the IBM research
study, "Turning shoppers into advocates: The customer focused retail
enterprise," are available at www.ibm.com/retail


IBM Survey Methodology


A 7-minute telephone survey was fielded among a representative sample
of 1,000 adult Americans immediately following the 2006 holiday
shopping season, December 27-30, 2006. The results can be considered
statistically significant at the 95% confidence level and have a
margin of error of +/- 3%.


About IBM


For more information on IBM's activities at NRF 2007 please access the
company's online Press Kit at www.ibm.com/press/nrf2007