Fredric Lam, manager of IBM's Asia-Pacific Retail Innovation Centre, said for the past 57 years supermarkets had not changed and every such store in the world looks largely the same.

Store layouts cater to product brands, but not to consumers. This remains true despite the fact that today's consumers are much more knowledgeable because they can search and find information on virtually all products and services on websites, he said.

With the exception of some giant retailers such as Wal-Mart Corp, Carrefour and Metro, retailers spend little on information technology infrastructure compared to banks, manufacturing plants and other facilities, said Lam.

Bank tellers, for instance, have tools to help them recognise customers and thus allow them to cross-sell other products such as insurance.

"Retailers have only point-of-sale equipment but the staff can't bring out information on their customers to use, resulting in lost opportunities to impress them," he said. "Staff who interface with customers have no tools to deal effectively with them."

Lam said today's challenging marketplace requires retailers to deliver a differentiated, highly satisfying shopping experience. Achieving this begins with creating a truly customer-centric organisation and store environment.

To excel at customer centricity, he said, retailers must start to address four strategic imperatives:

lBuild an organisation that defines a shopping experience that evolves with changing customer expectations. One example is the US chain Best Buy which organises its store by consumer segments instead of product segments. The consumer electronics store offers a particular focus on computer geeks, thus allowing it to obtain a high profit margins while earning customer appreciation.

lProvide a truly convenient shopping experience. A case in point is Food Lion which creates a convenience store space at its supermarket. The strategy allows it to retain customers whose priority is speedy service.

lDevelop an integrated view of the customer. Bloomingdale's, an upscale department store, has a proprietary system that keeps two years worth of customer data and delivers messages to sales associates at the point-of-sale.

lDeliver a flexible product and service offering. Tesco has collected six or seven years of data from its more than four million loyalty card member customers and found some commonalities. Tapping into a group of customers of recent college graduates and those starting their careers and have no credit cards, the firm issued them credit cards. Asked why Tops Supermarket's Spot Rewards Campaign, which provides a kiosk for members to print out discount coupons, had not been successful, Lam responded that he did not know the Thai retail industry well.

"However, our study last year found that a loyalty program will work as long as it offers added value to customers. For example, if I give my name and my birthday, I would expect every year I would be sent a birthday card. If they collect my size, next time they won't ask me again which size I wear."

Kittipong Asawapichayon, country manager for IBM's industrial and distribution territory, said Tops had already adjusted its system. In the past customers might have found their discounted offers did not correspond with their past buying activities. Now that it has adjusted the data to answer to the needs of specific consumers, the programme has receive a better response.

"Also, it's still in the development process and it may not link the system to the complete store integration framework," he said.

IBM yesterday hosted a demonstration before several dozen retailers and journalists on the 67th floor of the State Tower in Bangkok.

Pichaya Changsorn

The Nation