Innovation for the C-Suite
Using the power of IBM Research to create a market segment of one

The adoption of social and mobile technologies is growing at an unprecedented rate, enabling companies and their customers to interact in new ways. Whether comparison shopping in-store on a mobile device or reaching out to the company through a social network, customers now have numerous channels to access information about the products and services they want to buy.

Simultaneously, companies have a chance to gain new insights about their customers through the data produced by these interactions, and use this to shape their offerings - not for a broad demographic or segment, but around the wants and needs of an individual.

To help its clients successfully navigate these changes, IBM has established the IBM Customer Experience Lab to invent new ways for them to provide best-in-class customer experiences across their many channels. Located at the T.J. Watson Research Center, with additional virtual collaborators around the world, the IBM Customer Experience Lab is a partnership between IBM Research and IBM Global Business Services. A dedicated team of researchers and consultants will work with clients on customer insights, customer engagement, and employee engagement through the use of mobile, social, cloud and analytics technologies.

The era of the customer

Rather than viewing customers as part of a large demographic, companies can work at the lab to apply advanced research capabilities such as social listening, multimedia analytics and machine learning to understand and predict the differences in individual customers across many different touch points, including the web and physical stores.

Gaining insights into an individual customer’s tastes and preferences, companies can create highly personalized experiences and have their employees use those insights to engage the customer in a conversation rather than just a transactional experience.

Creating a highly personalized experience: the “Virtual Closet”

While many e-commerce sites offer personalized recommendations, they’re not really that personal; most are made by looking at the item you purchase and then looking at other people who purchased that same item and seeing what they also bought. This is known as collaborative filtering.

However, using the concept of a virtual closet being explored by IBM Research, retailers could instead look at recent items you’ve purchased or shown interest in, whether online or in a physical store, and tailor recommendations based on your unique taste and style. A clothing retailer could look at a customer’s purchases and gain information about the characteristics of particular items like color, type of print, fit and genre, such as fashion forward or more conservative. By looking at multiple items and comparing these different factors, a taste model can be built of that customer and include additional preferences like price.

Other factors that can be built into a taste profile created through a virtual closet include customer feedback and information on other stores customers purchase from. In addition, new image recognition technologies are being explored that would allow companies, when customers opt-in, to view select images that customers share on social networks to build a more complete picture of what they like.

Working with clients to transform their business

By providing exceptional customer experiences, whether online or in a store, companies will be able to attract more loyal customers and engage them in an information-rich relationship rather than just a series of isolated transactions. IBM has already engaged clients to transform their customer experiences including Nationwide Building Society, the world’s largest building society serving 15 million members in the United Kingdom; and Banorte, one of the largest banks in Mexico.

With the new IBM Customer Experience Lab, IBM Research, IBM Global Business Services and clients will be able to work together to analyze key business challenges and create solutions that integrate next generation mobile, social, analytic and cloud technologies.

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Learn more about the lab

• The new rules of the game in the age of the digital customer

  A blog post from Mahmoud Naghshineh, Vice President, Services Research at IBM

• Read the press release