Towards Customer Centric Retail Enterprise

Retail Strategy C-level Seminar at Seoul Grand Hyatt Hotel in October 8th.

  IBM Korea hold Retail Strategy Seminar in October 8th at Grand Hyatt Hotel, Seoul. It was an intriguing seminar from the points of timing and context. Recently, one of leading South Korea retail conglomerate chairman expressed his strong will on omnichannel transformation. IBM addressed this portion of session in the morning with client CEOs and IBM was invited to pitch "future of retail" and omnichannel.  Retail Strategy Seminar at Hyatt was evening seminar target to Korea Retail CxOs.

  
  Keynote speaker was Jill Puleri. She is the global leader for IBM’s Global Business Services retail consulting practice. She was recently named by Consulting Magazine as one of their Top 25 Consultants for her vision and strategy at IBM in the Retail Industry.

  Jill kicked off "future of retail" presentation by saying from the points of 4 growing influencing factors:

1) Consumer Expectations, 2) Future Customer Experience, 3) Disruption and disruptors, 4) Big data is now broader data and shared some data points such as 80% of all brands could disappear, 69% of US consumers order food online using mobile phone, and top two influences of purchases are friends posts / pinterest on social networks etc.

Future of Retail

  Then shared some video clip (which I've been deeply involved in). It actually developed to showcase the customer's journey on shopping experience in 2020. We intended to demonstrate the future millennial shopper's experience by showcasing sequence of event & shopping behavior.For example, from location based push service, to payment on smart watch, social based customer communication, turning social media to shopping, tablet based online shopping, real-time on/off line stock status checking, shopping at the physical store with digitized interactions, sales assistant Pad for customer analytic and shopping assistance on the spot, smart fitting room with cognitive computing 'Watson' including real-time sentiment analysis and assortment recommendations etc. Reaction was awesome.

Technology is blurring the boundary between stores and online

  What does 'blurring boundary' mean? Well, this means there's no online pure-play and brick and mortar exist any more. And physical stores will evolve into experience centers. Purchases will be ultimately made through online, from online site or via digital interactions at store. So finally, transparency of pricing, service levels and experiences across digital and physical channels will be getting more important than ever.

  What does this kind of leading player's innovation mean?

  It means they are leveraging social as a communication tool for millennial consumers and employees and creating real-time customer value using mobile as an enabler. It also implies the notion that they are providing a differentiated customer experience – anytime anywhere.

 Disruptors are succeeding and directly impacting traditional retailers.

  We are all observing emeging disruptors’ presence everyday. These are, #1, could be the one who sacrificed profits to be the online shopping reference, #2 investing in R&D particularly Amazon, #3, firstly broadest selection followed by
adding and dominates 1-2 categories annually, #4 simple strategy such as one click to buy, #5 strategy such as knows customers individually, #6 'all you can eat' loyalty schemes, and lastly but least, #6 disruptive offer such as same day delivery etc.

  

Underlying challenges in omnichannel transformation

  Lance Tyson, Sr. Managing Consultants in IBM Retail Center of Competency continued second session for omnichannel.  He articulated some insights actually IBM found from the study which IBM surveyed 30,554 consumers in 16 countries in 2013 to discover their opinions of omnichannel capabilities and the impact on choice. See below Key Findings.   Probably one of most significant different challenge in Korea would be the different price and assortment between online and offline, compare to US.

Korean customers intrinsically have the notion that online should be cheaper than offline and online is meant to be offer the more attractive promotions or benefits than offline. Meanwhile, US offer consistent price and experience across the online and offline. For example, US major retailers apply same pricing and assortment across channels with convenience to experience items while in-store. Another words, markdown avoidance is a top omnichannel capability in leading retailers.

  

  From the IBM survey, prioritization of customer's requirements of omnichannel varies by countries. Korean customers put the "track order status" as no.1 rank, while global average put the "pricing consistency across channels" as no 1. 

  So if we imagine the in-store experiences, try different size and color in the fitting room and return back or pick up at the store as free of charge - this could be obviously an advantage over online. But if item is not available, sales associates should able to order online with free of charge delivery. Many Korean retails seemed not have this kind of transparency and flexibility and it lead us to imply the underlying challenges in omnichannel.

Winning formula for Retail

 So in order to provide consistent and transparent experience across channels, retailers should think about below winning formulas:

1.      Develop relationship with your customers: The era of personalization vs paper ads for all

2.      From gut based to fact based decision making

3.      Product is hero: Creating differentiation with product

4.      The merchant mind set: Creating the WOW in store feel

5.      Play where she wants to play: Build world class omni channel

6.      The new health and wellness: Integrating Doctors, insurance companies and grocery stores.

In order to achieve this, possible key enablers or immediate recommendations would be;

     1. Probably starting point is to visualize agreed vision of customer experience that describes where/how to interact customers. So customer journey map could be a key enabler to agree the vision for customer experience across channels.

     2. Changes in MD and inventory planning. Inventory and mark down planning should be integrated across channels.

     3. Given the consideration of potential key issues in KPI such as, when online customer order claimed to in-store pick up or return, or reverse way, online order at store - in this case, there's issue embedded in terms of incentives for sales associates or revenue split between online and offline. We can resolve this kind of KPI issues by using shadow P&L as KPI management.

     4. Aligning SCM: One of leading US retailer integrates its SCM across channels/formats with allowing the ecosystem of suppliers to be more cost efficient. This company shared SCM data with suppliers for free, for suppliers to cut costs with better planning and inventory mgmt. This company also plans to combine sales data for specific suppliers with customer data, providing analytics service to those suppliers.

     5. Know your customer: Major US retailer adopted customer behavior analytics in the store. For example, IBM Presence Zone use wifi as meduim to analyze the customer behavior since RFID make a so much distraction if store is full of RFID signal congestions.

     6. Competitiveness of store: Macy's and David Jones attempted to make store as attractive place for shopping with service competitiveness. US Retailers are not only put every efforts to  analyze customer behavior and traffic to check conversion of foot traffic into sales, but also empowered sales associates with mobile to invigorate service competitiveness in store.

If you are interested in IBM Survey, please refer to below key findings from IBM IBV Retail Survey in 2013.

Some key findings from IBM Retail Survey.

     1. The development of online shopping in South Korea far surpasses global trends as such, 27% global vs 48% South Korea.

     2. When IBM Institution of Business Value surveyed the question "how much do you want to share your current location (GPS)?'", 19% of responded yes in 2012, whereas the number went up 36% in 2013.

     3. Percent of shoppers who showroomed for their last purchase - global 8.0% vs South Korea 12.3%. Showrooming defined as having visited a store before ultimately making the purchase online.

     4. Influencers of purchase behavior is concerned, friends posts / pins item purchased on social networks are the most influential on purchasing behavior in South Korea (56%), while China (85%) and Japan (41%).

     5. Priority of customer requirements on omni channel: Price consistency across channels (1), and in-store, locate out-of-stock item and get it shipped home (2), was ranked as 1 and 2 respectively in global average, while track order status (1), and locate item at in-stock location and get it shipped (2), was ranked as 1 and 2 respectively in South Korea.

     6. IBM defined the 4 customer categories based on degree of utilization of Social-Location-Mobile digital technology: Traditional, Transitioning, Tech Intrigued and Trailblazers. The Trailblazers want to do things themselves wherever, whenever; they need visibility and consistency. Survey result shows that China is the clear leader for SoLoMo adoption while South Korea and Japan consumers are waiting for a reason to adapt.

Epilog

  This kind of customer centric transformation has connotations of cultural and organizational challenges. Particularly in order to catch up unprecedented pace of customer's buying behavior, firm should be more nimble and more importantly, transparent and having mind-set put the consumer at the center of equations. Korea retail industry will experience the hard times to do this, but I think it will allow the firm to learn something to be a leader in these brave new world of competitions.

** The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.

IBM 유통산업 미래전략 CxO 세미나 -10월8일 남산 하얏트

한국IBM에서는 10월8일, 남산 하얏트호텔에서 "2014 유통산업 미래 전략" 세미나를 소수의 유통산업 임원들을 모시고 개최할 예정입니다. 본 세미나는 특히 유통산업의 미래는 어떤 모습을 갖게될까에 대하여 글로벌 IBM 유통산업 컨설팅 부사장이신 Jill Puleri 를 모시고 온오프라인 통합, 소비자의 참여확대, 새로운 경쟁자의 출현, 공급자의 영향력 확대 등 미래 유통 산업의 진화 방향을 짚어보고 이러한 진화가 가져올 파급효과와 유통 업체의 대응 전략에 대한 의견을 살펴보는 기회를 만들었습니다. 이어서 고객중심으로의 유통산업혁신 이라는 주제로 '옴니채널'로의 이행에 대해 IBM 유통산업 수석컨설턴트인 Lance Tyson 으로부터 옴니채널 운영으로의 이행을 위한 변화과정을 글로벌 선진 사례와 함께 소개받는 기회를 갖게 되실 것 같습니다.

특히 요번에 방한하는 IBM 유통산업 컨설팅 부사장 Jill Puleri 는 최근에 Consulting Magazine 으로부터 Top 25 컨설턴트로 등재된 바 있으며 IBM 산업 Academy 의 18명의 전문가 중 한 명으로 선정된 바 있습니다. Jill 은 또한 National Retail Federation 의 아주 활동적인 멤버이기도 합니다. 전세계에서 러브콜이 쇄도하는 유통산업에서 유명한 연사로 기회가 되시면 참석하시어 도움이 되시는 정보를 얻고 네트워킹도 하시는 기회를 갖으시기를 바랍니다.

Jill 의 그간 경험한 유통산업의 통찰력으로, 향후 미래는 brick and motar 와 digital 의 경계가 불분명해지면서, 고객과의 무한개입상에서 경험의 일관성과 Aha moment 를 어떻게 창출할지, 타 산업 및 공급자와의 새로운 경쟁은 어떻게 대처할 지 그리고 인지컴퓨텅에 의한 contextual shopping 이라는 과제는 어떻게 우리 앞에 나타날지에 대해 살펴볼 기회가 있을 것 같습니다.

본 행사는 초청을 기반으로 한 임원대상 세션입니다. 유통산업 임원분들중에 참석을 원하시는 분은 아래 연락처를 참조하시어 연락 주시면 감사하겠습니다.

※ 아젠다

기타 이 행사와 관련된 문의는: 

IBM 의 김호인과장 kimhi@kr.ibm.com (010-4995-8629) 이나 김정혜차장 junghyekim@kr.ibm.com (010-4995-8213) 으로 연락주시기 바랍니다.

감사합니다.

"Open Innovation leveraging IBM Watson" class in UC Berkeley

When Watson meets Open Innovation

  

  It was interesting to note that UC Berkeley opened undergraduate class titled "Open Innovation leveraging IBM Watson" at Hass Business school in UC Berkeley from Fall semester, this year. I came across this class during my web navigation of Henry Chesbrough's Garwood Center for Corporate Innovation. I thrilled to see this course and the thought occurred struck me that it is the symbolic example of Watson ecosystem and father of open innovation actually undertook the mission of raising future talents who will ultimately marry the Cognitive computing with open business model as T-shaped professionals.

  Those of you who are not familiar with open innovation, Open innovation is a term promoted by Henry Chesbrough, faculty director of the Garwood Center for Corporate Innovation at the Haas School of Business at the University of California, in a book of the Open Innovation published in 2003. Wikipedia kindly illustrates open innovation as, "Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology".

  It was particularly interest given my Ph.D research areas were centered around open innovation and open source business model and IBM Watson Ecosystem announcement also direct related to my business relationship with leading South Korea Electronic company for their future business model.  Watson, the name for the IBM supercomputer best known for crushing “Jeopardy!” contestants, is prepping its “cognitive computing” technology to be utilized by third-party developers for the first time via a Watson cloud service called the “Watson Ecosystem.”

  According to Haas Student Blog, IBM has selected UC Berkeley, among less than a dozen universities, to participate in IBM Watson’s cognitive computing course to be offered in Fall 2014. According to Spohrer, Director of IBM Global University Programs, Watson can be built for any discipline , whether it is for business discovery, financial advice, retail, or medicine. The class is an opportunity for innovative students to utilize their creativity and go beyond oneself to help people through the Watson computer. Spohrer hopes this kind of cognitive computing will allow more flexibility in communication to be incorporated in one’s daily life, versus the current form of programming which necessitates expertise in special or unique languages. The students will compete against six other top schools to win $100,000 to seed their venture. Most importantly, the group gets to own the IP they created.

How Watson can contribute to business?

 OK then, this collaboration between IBM Watson and UC Berkeley naturally lead us to ask the question why?... Why Berkeley Hass school open the class within center for corporation innovation in UC Berkeley? I may not portray the full picture here, but probably I can attempt to do some jigsaw puzzles... university is another locus of open innovation particularly when new paradigm of technology is emerged. Think about early 60s' IBM efforts on computer science discipline. IBM constructed beachhead in Columbia University for birth of Computer Science Discipline at that time, do you now can see the another Deja-vu?

  Soon after Watson demonstrated the capability of answering complex queries within 3 seconds from “Jeopardy!” contestants, IBM directly start to explore Healthcare diagnose application area such as disease diagnose from Smart Phone. Motivation here is, getting smarter with technology that analyzes and understands natural language content, it's going to open a door to having companies look at the potential. There's traditional  databases on one side, there's keyword search on the other, but right in this middle, in this sweet spot where people are struggling to get greater precision to get greater  breadth in answering information needs. Here's some potential uses for IBM's Cognitive Cloud services from Watson:

1. Watson the shopping companion: On a mobile device with location services on, Watson could track your current location and give you competitive rates for products you want across several outlets in your vicinity, and alert you if you’re about to pass a certain store that has what you’re looking for. In other words, if you’re in a shopping mall, and several stores have the item you want, Watson could automatically find the lowest available price for whatever you’re looking for (once you set your location parameters) and direct you there.

2. Watson the personalized contents aggregator: Watson could tap into news applications or aggregators like Flipboard or Zite and read aloud news bits its user is asking about, but Watson would hopefully be able to remember its user’s preferences and, over time, begin automatically pulling stories it knows the user will probably be interested in. For instance, if a user constantly asks Watson for news about weather and typhoons, Watson could scan the news constantly and recommend certain news stories related to science and climate change – anything relevant to the user’s interests.

3. Watson the nurse: If WebMD could integrate Watson into its symptom checker, assuming Watson could hold a conversation and remember prior details, users could tell Watson about all of their symptoms, and Watson could return lists of possible conditions and medical solutions, be it home cures or recommending a doctor visit. Furthermore, Watson could search deeper through WebMD to recommend certain drugs or home treatments, or even locate and contact a nearby pharmacy to go pick up medicine. 

4. Watson the contact center agent: Most of contact center agents devoted to follow the Q&A guidance computer screen, and reality is, they were often flustered to catch up exact prescript on time and even miss the question during the conversation. What if Watson provide the personalized self-service experience for clients by dynamically developing personal profiles from unstructured data almost real-time?

5. Watson the research discovery agent: What if all the research related information on the planet including global patent information and up-to-dated research information have loaded into Watson system through real-time searching and crawling? Would it be nice if Watson identify the rear studies and information sources while building a case for original research?

Why UC Berkeley?

  Garwood Center for Corporate Innovation( formerly Center for Open Innovation) in Hass School of Business was known for source of Open Innovation study. The Center houses the Open Innovation Program, the Berkeley Innovation Forum, a membership organization dedicated to sharing knowledge about innovation challenges. Prof. Henry Chesbrough is faculty director of this center and He is the first person to clearly define the new innovation strategy that is restructuring R&D worldwide—open innovation. His first book was Open Innovation in 2003 followed by Open Business Model, Open Innovation: Researching new paradigm (R&D), and Open Service Innovation.

Given Prof. Chesbrough's footprint in R&D, business model and service innovation from the context of open innovation, we can easily guess that students in Management of Technology track in Hass School may explore the way to create new business model based on Watson Cognitive Computing paradigm in conjunction with new user experiences and new service innovation more in open innovation and collaborative manner.

This course will let undergraduate students access to the Watson Developer Cloud to learn about the technical aspects of cognitive computing, including ingesting, building and training a corpus, and then in the second half of the semester, using that information to build a cognitive app and developing a business model as a precursor to taking their ideas to market. The students taking this course will be among the first to have hands-on access to the cutting-edge Watson technology, enabling them to develop innovative ideas to solve the most pressing problems of industry and society. Gartner Inc., a research firm predicts that 4.4 million IT jobs will be created to support Big Data by 2015.

Epilogue

 To me, this is interesting move to academia as well as IBM from the lens of open innovation. Watson Cognitive Computing paradigm itself probably seemed not able to flourish within IBM company boundary alone given the complexity and string necessity of cross discipline confluence between business model, use cases and different expertise in industry and IT skills.

  So this class is perceived as another type of data scientist course armed with enterpreneurship and business model innovation, so ultimately enabling them to develop innovative ideas to solve the most pressing problems of industry and society.

I wish all the best in success and great advancement of open innovation between IBM and UC Berkeley.

**The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.

Proliferation of IoT and its implication

Proliferation of Internet of Things - what does this really mean to us?

It was my pleasure and honor to present "IoT & its Business Development" to one of Korea major Chaebol's CEO Breakfast session in May. I felt awe when I saw the number of standing signboard at the entrance. It was 195th forum. Wow, 195 consecutive breakfast meeting with more than 50 CEOs together? Impressive.

Anyway, I kicked off by saying some examples unveiled during CES and MWC such as connected crockpot, toothbrush(?), Belkin's Wemo switch, wash machine, car etc and then, explained the traits of IoT communication protocol. I explained MQTT as one of publish-subscribe based messaging protocol example for use of IoT. MQTT is light-weight protocol to fit into Internet of Things that is designed for remote location and characterized as, small code foot print, limited network bandwidth, high velocity, low battery consumption and "do not get "lost" in the event of a system failure" etc,.

And then illustrated some use cases such as connected car, condition based maintenance, smart city demo - Geo-spatial streaming data based integrated operation control and connected troops etc.

Merging of physical and digital world

As 1 trillion devices in the world are expected to start dialogue with each other, or 2 billion internet of peoples, it naturally lead us to imply the next question, " OK, what does this really mean to us?". Although some of survey unveiled the fact that explosion of data is the area where most of C-level executives were under-prepared, paradoxically it also implies the opportunity that we can extract the insights from these data explosions.

Way to plug our hands into the digital world

One symbolic example of merging physical and digital world is Myo from Thalmic Labs based in Waterloo, Canada. The technology that makes Myo possible — electromyography (EMG), which doctors and scientists use to record electrical activity from muscles —  is something Thalmic Labs have been experimenting. Co-founder Lake and Matt Bailey worked on a wearable device that could help blind people navigate using sensors. 

Connected Thermostat as 'thing' of a smart home.

Another example is certainly Nest learning thermostat and protect smoke detector.
As of today, the Jawbone UP24 band will have a setting that turns on the Nest thermostat when it senses its wearer has woken up from a night’s sleep. Mercedes-Benz’s cars will be able to tell Nest when a driver is expected home, so it can set the temperature ahead of time. Smart lights made by LIFX can also be programmed to flash red when the Nest Protect detects smoke, or randomly turn off and on to make it look like someone is home when Nest’s thermostat is in “away” mode.




Reinforce the firm's competitiveness within incumbent business boundary.

As world is getting more instrumented, interconnected and intelligent, firm needs to think about the way to gain competitive advantage from existing business areas.
First, instrumented means, data is existed as form of digital as we observed from above Myo or Nest case. Physical human motion and temperature can be converted into digital data through instrumented.  We should examine whether we can obtain the digital data from major touch points, and if yes, then map of collection.

Second,  interconnect the existing internal data first, and then beyond internal structured data, such as external unstructured data, social, streaming etc, so need to define the area to interconnect. Why? Because these efforts would eventually help the firm to understand 360 degree of customer profiling so understand the preference.

Third, intelligent. Ultimate goal of 'instrumented' and 'interconnected' is for intelligence. We need to study many use cases to learn how optimized data analysis facilitate the supreme services so eventually gain firm's competitive advantages. For example, as soon as you recognize the customer's event at any touch point (Nest recognize car is approaching near to house - in this case), you can analyze customer's preference from internal or external big data, so you can activate the very personalized recommended next best action (Pop up cool bear Ad at Next screen) to his/her instruments (in this case Nest or perhaps car navigator?).

Make new market with IoT

Inspire new customer experience engagement model:
With digital delivery capabilities, firm can internalize and enhance the customer experiences of every touch points through pre-designed system of engagement model. And then, firm may seeking the new business from adjacent area. In case of Amazon, once they conquered the book area then moved to adjacent spaces, such as CDs, groceries. In this case, it is essential to understand the emerging new technologies such as Big Data, Social, Mobile, Cloud and IoT.

Examine the quest where innovation capability meets opportunity:
Diagnose overall organizational capability to the point where data can be augmented as major resources. Explore the area where firm can advance to new business model innovation from the combination of firm's core competencies and real-time predictable insights.

Epilogue

Explosion of data incurred by Internet of Thing is, not a threat. But this statement is probably only true to the firm who understand the implication of data explosion. People only see this as an opportunity when they can extract the insights from these data explosions. In order to this, overall organizational notion such as "data is firm's strategical major resources" is required. Also organizational obsession on customer experience is essential part of ingredient.

**The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.

Internet of Things (IoT) presentation to CIO executives meeting

IoT and CES 2014

I presented “Foresee the future of IT through the lens of CES 2014” to the one of executive session at Plaza Hotel, Seoul. The object was to share my perspective on future trends from the observation of CES 2014. It naturally progressed to the topic around IoT.

CES 2014 is famous consumer electronic show and it is somewhat meaningful because this exhibition has usually taken placed during early January so it is regarded as precursor to anticipate IT trend that will shape the future.

I kicked off by saying some noticeable solutions from the show. LG showed the washing machine that is connected to smart phone to chat, and MakerBot for 3D printer. But I highlighted the Belkin Wemo Switch.

When IFTTT meets Belkin Switch.

IFTTT stands for “If This Then That”. It is a service that enables users to connect different web applications (e.g., Facebook, Evernote, Weather, Dropbox, etc.) together through simple conditional statements known as "Recipes". For example, If ‘sunset’ then “turn on the living room ramp”. This logic can be applied to web applications. But Belkin augmented this way into HW switch. The WeMo Switch can be plugged into any home outlet, which can then be controlled from an iOS or Android smartphone running the WeMo App, via home WiFi or mobile phone network. So in other words, you can control Wemo physical switch by Wemo App which can be applied IFTTT logic, so you can simply turn on or off the switch by clicking the button on the SmartPhone.

Facebook Messenger

Then I introduced Facebook Messenger. Well, interestingly enough, very next day of my presentation, FB acquired WhatsApp and paid 19B$ - 2^nd biggest tech acquisition of all time. Anyway, When Facebook faced the situation that its application should be continued on the Smart Phone devices, they considered the performance the most. FB acquired group messaging company named Beluga in March 2011 and introduced Facebook Messenger in August same year. It has known that Beluga was based on MQTT communication protocol.

Why Facebook chose MQTT for its messenger?

Message Queue Telemetry Transport (MQTT) was originally developed from Hursley IBM Lab for the purpose of Telemetry communication protocol to monitor and gauge the telemetry object. Characteristics of telemetry is low power & bandwidth consumption, very limited memory, and server capability, very long lifespan etc…, interestingly this is similar traits of Smart Phone. Given the consideration of HTTP’s communication through polling, MQTT’s heartbeat is originated from the requirements of low bandwidth and CPU usage (publish/subscribe protocol is under 5% CPU usage) in telemetry. MQTT communication protocol is conducted by publishing and subscribing. Subscribers nominate which types of information they want to receive by subscribing to specific topics. From publisher’s point of view, they publish in the event and forget. Rest part of communication governed by so called “message broker”. Message broker take care of session establishment and deliver so when the telemetry communication disconnected, heartbeat just checking the availability of counterpart, if disconnected, nothing happen, and once connection has established, broker resend the signal. So simply put, MQTT is lightweight, guaranteed service quality, based on publish/subscribe message protocol. MQTT is Open Standard base. OASIS (Advanced Open Standards for Information Society) adopted MQTT which stemmed from sub project of Eclipse Open Source Integrated Development Environment. MQTT boasts 93X more throughput than HTTP, 12 times less power consumption in the event of publishing, 120 times less power consumption in subscribing and 8 times less bandwidth workload than HTTP protocol.  MQTT boasts 50 µs app to app network speed where as HTTP takes few second level.

MQTT’s Publish and Subscribe protocol

In the WebSphere MQ Publish/Subscribe model the only thing which connects publishing and subscribing applications is the topic or subject which the publisher associates with his information. Publishers and subscribers need only agree on the topic to become connected to one another. Each different piece of information has its own topic associated with it. Subscribers nominate which types of information they want to receive by subscribing to specific topics.

Publishers of information are unaware of subscribers to the extent that they may publish information even if there are no subscribing applications requiring it. Publishing and subscribing are completely dynamic processes. New subscribers and new publishers can be added to the system without disruption.

With respect to a given topic, or piece of information, all possible combinations of publishers/subscribers are possible, that is; information about each topic may be provided by a single or multiple publishing applications the information may be received and processed by one or more subscribing applications.

The number of publishers and subscribers connected by a single topic depends upon the type of information which is flowing between them. As we will see later, WebSphere MQ supports both state and event based information, or topics.

Substantial numbers of use cases are possible in IoT

I shared “connected car” example as first popular Internet of Things use case. By connecting the Infotainment, Telemetics and Smart Phone, car owner unlock the car and find car when he/she lost, and when vibration in left front detected, sends data to car company who schedules appointment with dealer and sends invite.  Another use case is, condition based maintenance. Think about the petroleum pipeline network such as 17,000 km pipeline network.., how can we monitor the breaches or abnormal situations? By using 30,000 pieces low power, low bandwidth battery based M2M sensors in storage, temperature, pressure, refineries, spill location and pumps, operation center can detect, predict and execute based on condition based maintenance.

M2M Smart City demo in Barcelona Mobile World Congress.

Impressive demo was “connected car” demo in MWC this year. Solution that were comprised of IBM Infosphere Stream (SW that can process the unstructured stream data almost real-time), worklight and m2m message appliance “MessageSight”, underscored the importance of real-time monitor and control of road traffic and emergency control.  If I make long story to short, we could control the messages among the vehicle running in the Barcelona road from the control center. For example, demo displayed the automobiles in Barcelona city and let’s suppose one hydrant has broken and certain road was flooded. In this case, control center can define the zone and published alarm signal to specific zone, then the cars who have equipped with MQTT agent could subscribe that message and send messages to the adjacent cars, so ultimately all the moving cars in the zone could sense this alarm. And one car damaged and this would publish the fatal signal so emergence rescue team has arrived within short period of time….

Implication: OK, then what all of these imply to us?

Report articulates that 18B$ IoT market is estimated by 2020 and 30B IoT devices in 2015. OK good, then what this IoT proliferation to be meant to all of us?  

Proliferation of IoT devices and huge amount of market opportunity around IoT is somewhat threats and at the time, opportunities to us. We may think about the two approaches; How and What.

From the point of ‘how’, it is calling for new operation model. Firstly, it requires new capability.. for example, capability to take care of the consistent relationship around every touch points in omni-channels and deliver enhanced digital customer experiences. Second, capability across total organization is needed to expand among different channels and processes, and at the same time, it is also true to optimize every element’s capabilities. Third, it requires also integrate every element of value deliveries and optimize total organization centered on client touch points and effectiveness/efficiency point of view.

From the point of ‘what, it is calling for new customer experience which could be essentially achieved through enhanced digital contents…, for example, firstly, enhance customer experience improvements through digital contents of product & services, information, insights and relationship that could be captured across omni-channel touch points. Second, expand physical product and services to digital contents for new revenue growth. Third, redefine the system towards customer value oriented digital front office system so ultimately deliver customer’s differentiated unique value through digital channels.

Epilogue

Proliferation of IoT devices and consequent abundant data information lead us to imply the causality of businesses. This internet of things proliferation itself uncover the different control equations, it means we are literally exposed by exploded data information surrounded us and it requires new operation model which embraces consolidated view of information collected from every touch points of our clients relationship. Data is data but firm need to reorient its approaches more customer value orientation. If we are able to figure out the individual clients’ profile and persona for example, we may able to more proactively offer the value proposition, or perhaps predict the next best action based on our understanding of 360 degree client’s profile which have acquired from every touch points of engagements.

So it naturally leads us to conclude that understanding the customer is important, particularly true under exploding information era. Customer journey on product and services consumption could be also collected from proliferated M2M or IoT information. It means if we do the right job in maintaining customer lifetime value through digital front office transformation, it promises customer’s lifetime value to us. Because customer advocacy and intimacy stems from experience lock-in could be a critical weapon to win in the market place. 

**The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.

In-Store Experience Technology

IBM's new technology "Presence Zones" will help retailers transform in-store experience

Forbes online Jan 9th edition covers the intriguing story on In-Store Experience management from IBM. Below is the summary of article.

IBM will showcase a new technology that merges in-store, online, and mobile shopping into a single customer experience.  The technology helps retailers give shoppers a 360 degree experience that connects every touch point to deliver smarter, more personalized promotions.

What are the "Presence Zones"?

Presence Zones transform the in-store experience by using intelligent location-based sensors that help retailers engage shoppers with real-time promotions as they move through the store.  The goal is to integrate the physical and digital experience and create a seamless journey that benefits both the customer and the retailer.  As the customer moves through the store, IBM’s new technology allows the retailer to extend relevant and timely offers based on their time spent browsing different aisles and products.

Possible example of this story

As an example consider a new mom shopping specifically in the newborn clothing section at a major retail chain or department store. The retailer could craft specific messages ? whether it’s a promotion, an advertisement, or education ? tailored to the new mom’s needs. They could provide contextual information regarding the top pieces of clothing every newborn needs, or provide a coupon to drive repeat visits as the child grows.  As the mom moves to the grocery area, that message could then be tailored in real-time to focus on a newborn’s dietary needs, again based on the knowledge that the woman is a new mom.

Taking that example one step further, let’s say the father is about to leave his favorite home goods store after comparison shopping on his mobile device for a new baby bed (something that happens more frequently according to IBM, which saw mobile traffic soar by 40 percent over the recent holiday season). Assuming he has opted to participate, Presence Zones knows both the aisle and products he’s been browsing based on his physical location.  It also knows that he participates in the rewards program and immediately delivers a 15 percent discount to his smartphone, winning the in-store sale while rewarding his brand loyalty.

How is customer privacy handled?

This was one of the most important issues when the technology was first developed in IBM labs. It is important to know that the entire experience begins and ends with the customer’s decision to participate in the service. Every customer has to opt in, and further, IBM doesn’t receive, store, or share any personal data, which is considered proprietary between the retailer and the customer.   The customer can opt-in or opt-out of the service in a few ways, including through the retailer’s mobile app or website. Alternatively, they can just shut off the WiFi signal on their mobile device (simple way ha?).

Preference that matters

Using the above examples, it outlined a few important goals during the shoppers’ journey.  One is ensuring the customer is willing to participate.  Without consent, no personal data is exchanged and the customer goes about their day.  Another is the ability to reward loyalty by delivering a tailored and connected shopping experience through a mutual exchange of information.  The retailer understands more about the customer, and in turn, the customer receives a much more personalized and targeted promotion.  In addition, and enabled by that deeper understanding of in-store traffic, the retailer is able to direct sales associates for better face-to-face service or optimize the physical location of new in-store promotions.

Through significant analysis, IBM has learned that people prefer very different levels of engagement. Some might want notifications, others might want email, and others might prefer in-depth and engaging discussions with a particular retailer. IBM’s analytics enable retailers to help discover customer preferences so that they can approach customers in a customized and appropriate manner. Likewise, IBM’s technology enables the retailer to integrate different facets of the customer’s behavior to better predict their engagement preferences. In the long-run, this should lead to a better customer experience that translates into greater loyalty.

Epilogue

It is generally known that great deal of RFIDs in the store is not easy job to control. But this technology utilizes the retailer’s WiFi network in concert with the customer’s mobile device to deliver the location-based service.  Once a customer opts in to participate, their location and patterns of travel are tracked in the store with targeted real-time information – such as a new promotion or more detailed product information – delivered at various points based on the products they are browsing.

Utilizing information from social or public data source always entails privacy issues. This story suggests fundamental but important prescription - customer's decision to participate. This article shed a light on the way of sharing private information without any one-side harm, in other words, mutual benefit: retailer understand more on customer, in turn, customer receives much more personalized and targeted promotion.

However, unless customer are experienced the tangible benefit, to me, it seemed not easy to overcome the customer's preconceived notion of terrifying from the outset.

**The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.