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IBM Unveils Sustainable, ‘Hybrid’ Strategy for Digital Transformation

The pace of digital acceleration catalyzed by the COVID-19 pandemic has fundamentally changed commerce, and it isn’t slowing. Gone are the days when the customer journey is a straightforward and linear path.

Customer needs have evolved, and new buying behaviors are strikingly apparent—while convenience may still be king, sustainability is no longer a customer demand but an industry imperative. 

Under extreme pressure to build resilient infrastructures and intelligence operations, retailers are desperately seeking technology investments to deliver excellent customer experiences seamlessly across all channels. 

Global tech powerhouse IBM is answering the call for digital transformation with solutions for the new hybrid reality that incorporate innovative strategies for sustainable business development and customer engagement. 


Modernizing retail 

Over the last two years, the retail industry experienced unprecedented change that rapidly accelerated technology innovation. 

The need for digital transformation permeates all aspects of retail, including online, social, and store environments. 

Retailers now have a wide range of tech solutions from different providers that service various channels and distinct operations—resulting in a need for integration into a cohesive framework that enables efficiency. 

IBM is stepping up to the modern retailer’s challenges with hybrid cloud solutions that provide a flexible, multi-cloud environment. 


Converged commerce

The need for simplicity and unification of retailers’ technology has manifested the rise of converged commerce. 

Today’s customers are now accustomed to the advantages of shopping across multiple channels, effortlessly shopping online, in store and seamlessly transitioning between experiences. 

But for retailers, delivering seamless experiences across channels is incredibly complex. Laying the foundation for the next generation of retail technology innovation, converged commerce is a relatively new strategy for managing the customer experience. 

Retailers reaching consumers on multiple channels commonly operate within silos, utilizing a growing number of software solutions that execute limited functions and deliver unique customer data points. 

Converged commerce solutions offer retailers the opportunity to centralize operations on a unified platform, integrating the customer interactions and providing a holistic view of the customer. 

On the cutting edge of converged commerce is IBM, pioneering innovative solutions to drive digital transformation among retailers. 

As a  leader in retail industry technology, IBM addresses the challenge of creating integrated experiences in the new digital paradigm. 

By leveraging artificial intelligence (AI)  & machine learning, predictive analytics, and other breakthrough technologies, IBM is helping retailers and consumer packaged goods (CPGs) operate with the agility and data necessary for ongoing success in an ever-evolving landscape.  


Driven by purpose

A 2020 IBM research study proves the importance of data-driven decisions regarding customer behavior. The study revealed that 41% of consumers classify themselves as purpose-driven, close to the percentage of consumers identifying as primarily convenience-driven. 

The rise of customer demand for sustainable and purpose-driven products is challenging the old norms of traditional retail.

For the last decade, retailers have prioritized focusing on delivering a convenient customer experience. Now, the demand for sustainable practices requires the re-engineering of value chains. 

True sustainable development requires more understanding, insight, capability, and channel management for retailers. 

Today, sustainability is not just about CO2 and clean energy—it demands a  more holistic approach on plastic, water, and fair and equitable labor throughout the value change. Re-engineering sustainable business practices and operations is currently a big focus at IBM.

Luq Niazi, IBM Global Managing Director of Consumer Industries at IBM, told RETHINK Retail that he believes the 2020s is the decade sustainability becomes a requirement rather than just a talking point. 

“I believe it will become pervasive in the next 5 to 10 years,” he said.

Sustainability is accelerating more by big CPG brands than retailers. Brands want to demonstrate sustainability credentials to showcase a diverse portfolio to customers. It also makes more sense from a supply chain perspective, as the need for localization is apparent amid the continuing global supply chain crisis. 

Successfully transforming a business’s operations and supply chain is a massive endeavor, and requires communicating sustainable practices to the customer and having intelligent infrastructures to understand results internally. 


Next-generation value chain

Technology advances make tracking sustainability through value chains a reality, but the practice is not yet pervasive in the industry. 

IBM hopes to lead the change for widespread transparency adoption in the market. With innovations such as blockchain networks, retailers and CPG brands can see the journey of products through the value chain, identifying each stage of product development from raw material to the shelf. 

Crypto anchors, unique identifiers similar to a fingerprint, can easily be inserted on products to verify sustainable materials. 

Blockchain networks and crypto anchors enable radical transparency in value chains providing significant benefits for both consumer marketing and organizational strategy. 

Consumers can scan a QR code on a pair of jeans for example and compare it with another pair to identify which one is more sustainably sourced. Integrating this level of convenience with a high degree of sustainable transparency checks both boxes of top priorities for modern consumers. 

According to Niazi, “You may have heard of crypto anchors, which can be put into products as they go through the value chain. So you don’t need to label, you can actually verify the product as it moves up the value chain. Then, end consumers can use crypto anchors to see whether the virgin olive oil they’re buying is truly organic or not, and whether it’s been tampered with through the value chain.”

Using technology to provide transparency in value chains also solves another major challenge for CPG brands and retailers. 

Allowing customers to have complete information when making purchasing decisions negates the need for extensive marketing campaigns to advertise product sustainability. 

Not only does this build trust with consumers, it also prevents accusations of greenwashing. In some cases, it can even enhance brand marketing for organizations under-communicating their sustainability initiatives.   

This new generation of value chain sustainability has the potential to reinvent organizations and accelerate growth.

But communicating value to customers is only one part of the challenge, enterprise reporting is another hurdle altogether. Niazi explained connecting the cost of green decisions to the customer experience is critical for organizations to make smart strategic business decisions. 

The necessity for data-driven insight reiterates the importance of converged commerce strategies that can support allocating customer data from all channels. 

Having a 360-degree understanding of the customer provides clarity on which practices and products are effective and where things can be improved. 

Another exciting opportunity presents itself with targeted marketing, enabling the ability to identify sustainability-driven customers and deliver targeted offers and ads. 

This level of insight paired with the operational agility that converged commerce offers is a game-changing capability sure to reinvent the retail industry. 


FInal thoughts 

Navigating digital transformation is complex, especially when doing business in today’s unpredictable world. 

The modernization of retail calls for converged commerce solutions that integrate innovative technology for greater operational efficiency and sustainable development. 

Reinventing value chains to meet customer demands in the new normal is no easy task, but retailers and CPG brands are not being left to face these challenges alone.

IBM is leading the charge for change with technologies and collaborative approaches that open up new business opportunities. Make no mistake, the future of commerce has converged, and the future is here now. It’s time to answer the call.