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IBM Study Explains How Hybrid Cloud and AI Are Reshaping the Retail Industry

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By Deb Pimentel, Technology Sales Leader, Canada East, Global Markets, IBM Canada 

Over the past two years, consumers’ shopping preferences have changed drastically. Many habits consumers adopted out of necessity during the COVID-19 pandemic are now the norm. Consumers no longer see online and offline shopping as distinct experiences. They are now accustomed to the speed, convenience, and personalisation that different tools provide. Shopping must be fast and efficient, rich, and experiential, and always easy and intuitive. Consumers also expect companies to meet their demands for digitally enabled, curated and convenient shopping journeys as well as substantiate their social and environmental responsibility claims. 

A recent global study by the IBM Institute for Business Value (IBV) and National Retail Federation (NRF) revealed hybrid shopping – mixing physical and digital channels in shopping journeys – is on the rise. One in four consumers surveyed (27%) chose hybrid shopping as their method of choice. Stores remain critical, with nearly three-fourths (72%) still using stores as part of their primary method of buying. The study shows consumers surveyed are also using more technology and fulfillment options in the shopping process – self-checkout, curbside pickup, scan & buy, local delivery, and contactless payments have all become commonplace – shifting how customer engagement, merchandise planning, supply chain, stores, and fulfillment need to operate.

Top reasons respondents choose to visit a store include touching and feeling products before buying them (50%), picking and choosing their own products (47%), and getting products right away (43%), though what in-store shoppers are looking for varies by product category. While 27% of respondents report hybrid shopping is their method of choice, Gen Z consumers are most likely to be a ‘hybrid shopper’ compared to other age groups.

Consumers also say sustainability is more important for purchase and brand decisions. In fact, 56% of Canadians surveyed by IBM last year said they would be willing to change their purchasing habits to help reduce negative environmental impact. But according to the latest IBV study, consumer actions don’t line up yet. While 62% of global respondents are now willing to change their purchasing habits to reduce environmental impact, and half of total respondents even say they’re willing to pay a premium for sustainability, there’s a gap between intention and action. Only 31% of respondents say that sustainable products made up most or all of their last purchase. 

One way to help close this gap is with transparency. About 1 in 5 respondents said that more information – what makes a product sustainable, where products are sourced, produced, and manufactured, and how to re-use, return, or recycle them – will help them buy more sustainably. It’s clear from the survey findings that retailers should streamline the hybrid shopping experience and make sustainable shopping much easier for their customers. 

Top recommendations from the study include:

  • Retailers need to focus efforts on their Extended Intelligent Workflows, infusing artificial intelligence (AI) and relying on hybrid cloud to improve operational agility and effectiveness across the organization and extending to business partners. 
  • Retailers also need to recognize the impact they have on people, communities, and the planet as well as the consumer desire for more sustainable outlook. 
  • As sustainability and social purpose become more important to consumers, retailers will increasingly integrate these into the business. 
  • Hybrid Cloud architectures enable retailers to run, leveraging open technologies to drive innovation and connect with customers and business partners. 
  • Retailers must embrace the demands of security, resilience, and adaptability as they create their future-state operating platforms.

Companies need to continue to transform operations, customer experience, and supply chains with technologies like AI and hybrid cloud to improve operation agility and adapt to consumers’ changing needs.

Deb Pimentel

By Deb Pimentel, Technology Sales Leader, Canada East, Global Markets, IBM Canada 

* About the IBM/NRF study: The IBM Institute for Business Value (IBV), in association with the National Retail Federation, conducted a global survey of more than 19,000 respondents across 28 countries in September 2021 to better understand the new normal of customer behavior. The full study “Consumers want it all: Hybrid shopping, sustainability, and purpose-driven brands” is available at https://www.ibm.com/thought-leadership/institute-business-value/report/2022-consumer-study

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