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IBM Study Reveals Challenges Midmarket CMOs Face to Sustain Brand Loyalty with Today's Social Consumer

Retailers Lee Jeans and wehkamp.nl Team with IBM to Engage the Individual Consumer through Social Channels

ARMONK, N.Y. - 16 Nov 2011: A new global IBM (NYSE: IBM) study of Midmarket Chief Marketing Officers (CMOs) revealed that building and sustaining brand loyalty is the top concern for today's midmarket CMOs, yet 72 percent do not feel sufficiently prepared to effectively build this loyalty.  Additionally, 70 percent of midmarket CMOs are concerned about data explosion, as they are tasked with making sense of highly complex information generated constantly from a variety of sources such as consumer blogs, tweets, mobile texts and videos.

Social Media and Mobile Devices

The proliferation of social media and mobile devices is creating a new breed of consumers who are digitally savvy and able to quickly compare and evaluate which products and services they want to buy.    Everyday consumers are creating 2.5 quintillion bytes of data with 90 percent of the world’s data created in the last two years alone. Savvy marketers are gaining insight from social media and incorporating it into their strategies. The key is predicting what consumers will want and then adapting marketing strategies to give them the right product when, where, and at what price they want it.   The global IBM study of Midmarket CMOs revealed that building and sustaining brand loyalty is the top concern for today's midmarket CMOs, yet 72 percent do not feel sufficiently prepared to effectively build this loyalty.

Today's CMOs need to be prepared to deal with an empowered consumer who is impacting brands instantly on Twitter, Facebook and other social channels.  61 percent of midmarket CMOs are struggling with how to manage the impact of social media will have on their marketing function.  Many CMOs today are focused primarily on understanding market segments versus understanding the individual consumer in order to shape marketing strategies.  Fewer than 50 percent of midmarket CMOs are taking the time to understand and evaluate the impact of consumer generated reviews, blogs and third party rankings on their brands.

The proliferation of social media and mobile devices is creating a new breed of consumers who are digitally savvy and able to quickly compare and evaluate which products and services they want to buy.  Mobile commerce is expected to reach $31 billion by 2016, yet 62 percent of midmarket CMOs report being underprepared to deal with the proliferation of channels and devices.  This increase in the mobile shopping trend further increases marketing challenges, complicates data collection and analysis, and threatens both customer service and customer retention.

Like their peers in larger organizations, midmarket CMOs are also being held more financially accountable to their organizations to produce business outcomes at a faster pace.  The study also revealed that while midmarket CMOs believe ROI on marketing dollars spent will be the most important measuring stick for determining success of their business by 2015, the study noted 72 percent of CMOs are underprepared to manage the plummeting level of brand loyalty.

Aside from current economic conditions, there's an even bigger factor impacting brand loyalty.  Innovations in technology and the spread of social networking have provided buyers with new tools for discovering, comparing, evaluating, choosing and experiencing brands.  With the growth of social networks and a need for transparency, trust and personal exchanges between the consumer and the marketplace are now forming the cornerstone of small and midsize marketing efforts.

Everyday consumers are creating 2.5 quintillion bytes of data with 90 percent of the world's data created in the last two years alone.  Savvy marketers are gaining insight from social media and incorporating it into their strategies.  The key is predicting what consumers will want and then adapting marketing strategies to give them the right product when, where, and at what price they want it.

Today, retailers are embracing technologies such as analytics to make sense of massive amounts of data consumers are generating every single second to effectively target the individual consumer and enhance the shopping experience.

Lee Jeans Teams with IBM to Understand the Individual Consumer

Lee Jeans, one of the most recognizable apparel brands in the world faced the challenge of capturing and analyzing the huge volume of information being generated by a variety of sources before any merchandising decisions could be made on its website, Lee.com.  By adopting analytics technology, Lee employees now have the capability to quickly make informed decisions that will improve the consumer's shopping experience.

Now, all the information that merchandisers need such as how well items sell, what is currently in stock and what consumers are saying through social media channels is organized into simple visuals that are shown over product thumbnail images on the Lee website.  With this visual layout that mirrors Lee.com, the merchandisers can easily move products around based on popularity and availability.  Merchandisers are able to see which products are being viewed most often and most importantly, which ones are being purchased most often.  This ultimately allows the Lee team to display the site in a way that provides the best shopping experience for consumers.

Lee is now also able to obtain all product view data, online sales, abandonment rates and conversion rates to give Lee merchandisers a quick snapshot of product performance.  Lee is also capturing consumer sentiment data generated from social media channels such as Facebook and brand rating website Bazaarvoice.  Facebook 'Likes' and Bazaarvoice ratings are also included in the tool at the product level and these insights are used to help with marketing and merchandising decisions.  Using social media and analytics Lee can now make faster and more informed merchandising decisions targeted at its customers with a simple click of the mouse.

Analytics Helps European Retailer, wehkamp.nl Shift Casual Online Browsers to Committed Shoppers

With more consumers shopping online from their smartphones, the average buyer has grown savvier with purchases, performing extensive research beforehand and always hunting for better deals.  As a result, online bargain hunters frequently add various products to their shopping cart, only to abandon these shopping sessions.  If online retailers cannot recapture a potential customer's interest and draw the shopper back to that previous shopping session, sales are likely to go to a competitor, even if the price is no different.

wehkamp.nl, retailer based in the Netherlands, sells brand-name clothing along with home appliances, beauty products, furniture and computer equipment.  The home shopping retailer receives more than a million unique visitors to its website, many of these visitors continuing on to other online retailers after browsing wehkamp.nl's wares.

As the holiday season begins, wehkamp.nl recognized the immense value that could be tapped by recapturing the interest and sales of these online browsers.  wehkamp.nl is using IBM analytics technology to track a consumer's browsing and purchasing history to create a unique customer experience with display ads, personalized emails and on-site product recommendations, capturing the interest and dollars of online shoppers.

For example, if a shopper had viewed several skirts during an earlier visit, the company can regain the shopper's interest by tailoring the message specifically to the holiday or occasion and choosing specific delivery methods and timing.  To date, wehkamp.nl has driven increased sales and customer loyalty across its various product lines by better capturing the attention of potential customers, even those who have left its website with a 271 percent increase in sales.

"Social media now offers a clear opportunity for companies of all sizes to sit at the same table and engage directly with the consumer.  This has changed the way brand loyalty is acquired and earned," said Andy Monshaw, general manager of IBM Midmarket Business.  "With the explosion of social media, businesses are gaining the opportunity to understand and target the consumer better, that is opening up new avenues for small and midsize businesses to realize the potential of this new information and communication technologies, but face the daunting task of intercepting and interpreting vast quantities of data to find -- meaningful insights."

For more information on the CMO Study: http://www.ibm.com/cmommstudy2011/
To register for the Smarter Commerce webcast on Nov. 17 at 10am ET: http://bit.ly/rAg0vX

For more information on IBM Midmarket Business: http://bit.ly/joxxPq
Facebook Page: IBM for Midsize Businesses: http://on.fb.me/sHgobr
Follow us on Twitter at:  #MidmarketIBM
To hear how IBM is working with midmarket clients: http://bit.ly/rIjE5A

Contact(s) information

Lizette Kodama
IBM Media Relations
646-675-0750
lkodama@us.ibm.com

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The proliferation of social media and mobile devices is creating a new breed of consumers who are digitally savvy and able to quickly compare and evaluate which products and services they want to buy. Everyday consumers are creating 2.5 quintillion bytes of data with 90 percent of the world’s data created in the last two years alone. Savvy marketers are gaining insight from social media and incorporating it into their strategies. The key is predicting what consumers will want and then adapting marketing strategies to give them the right product when, where, and at what price they want it. The global IBM study of Midmarket CMOs revealed that building and sustaining brand loyalty is the top concern for today's midmarket CMOs, yet 72 percent do not feel sufficiently prepared to effectively build this loyalty.

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