Online Retail by the Numbers

I’m spending today with a group of industry analysts at our annual Analyst Connect event. At the top of our agenda is a discussion about Smarter Commerce, our approach to finding better business processes related to the buying of goods and services, the selling of those goods and services, the marketing that occurs before they are sold, and the servicing of the customers after they’ve purchased them – the “buy, market, sell, service” cycle of commerce.

So I thought I’d talk about a current, real-world example of Smarter Commerce in action. If you’re like most Americans, the odds are good that you spent some time shopping over the last few days. In fact, based on the 2011 IBM Coremetrics Cyber Monday Benchmark Report, record numbers of people shopped online on Cyber Monday.

But a deeper dive into the data reveals that the ways that people are shopping have changed dramatically. It used to be that when we talked about online shopping, we naturally concluded that the PC was the consumer’s tool of choice. IBM data shows that in fact, nearly 11 percent of consumers are using their mobile devices to visit a retailer’s site; even more importantly, nearly 7 percent of all online sales are coming from mobile devices.

These are compelling numbers—the kinds of numbers that you ignore at your peril. Consider that just two years ago, mobile traffic to online retail sites amounted to less than 1 percent. If you weren’t using analytics to not just track how your customers were coming to your site, but how those trends were likely to evolve, I’m betting that the mobile explosion caught you unawares.

Here’s where a hockey analogy might come in handy. Wayne Gretsky, arguably the greatest hockey player ever, famously summed up the game in a way that is as applicable to business as it is to sports: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

You need to anticipate customer behavior and center yourself and your business on what they—not you—think is important. The end of the PC era is upon us and we need to take deliberate, measured steps to prepare our business for a new, mobile-driven era.

Your customers are getting smarter—they’re in charge of the conversation about products that are already in your inventory. And they’re using social media to broadcast their opinions. At scale. Instantaneously.

IBM data shows that people pay attention to these opinions. For example, people who visit a retailer’s site from a social site are nearly twice as likely to buy something than people who arrive from other channels. This suggests that people are heavily influenced by the opinions of those in their social networks. Even on the Internet, human relationships matter and require careful nurturing.

But the complexity that the empowered consumer is introducing into your once-orderly marketing world cannot be ignored. Your customers are using technology to change the very nature of supply and demand, and ultimately, of commerce.

At IBM, we’re proposing that businesses do the same thing through Smarter Commerce. We’re taking all of our strengths and layering them on top of each other. We can take our shopping-basket or consumer-behavior analytics and apply them to our optimized hardware platforms and engagement systems combined with our Global Business Services offerings.  Further, we’re complementing our organic Websphere offerings with technologies we’ve acquired from Sterling Commerce, Unica and Coremetrics to form the most comprehensive overall Smarter Commerce capabilities in the market.

We’re doing all of this in ultimate service to the customer. That’s Smarter Commerce.