IBM’s Smarter Checkout Provides Real Time Customer Data at Point of Sale
IBM (NYSE: IBM) recently announced a new Smarter Checkout solution that enables retailers to provide customers with a more personalized, interactive experience by offering them targeted third-party products and services at checkout. [1] Continuing to drive innovation and newer solutions for traditional markets by utilizing omnipresent data capture devices, or smart meters as IBM prefers to call them, mixed with its industry leading analytics, makes Big Blue one of the most exciting companies to watch.
About Smarter Checkout
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Combining IBM’s systems, software and services, the new technology will enable retailers to capture and analyze valuable consumer data (for example, when a purchase is scanned at checkout) and employ real time basket analytics to offer them new products or services right then and there essentially making the traditional point-of-sale station a true point-of-service. Examples of where this could be applied range from supermarket checkout lanes to the movie box office. IBM also mentioned future services could be added to these platforms with almost “plug and play” simplicity.
The Smarter Checkout solution also allows the customers to use their mobile devices to process orders, redeem digital coupons, access loyalty points, and pay for purchases at IBM self-service pay counters.
Similar to most of IBM’s Smarter Planet initiatives, the Smarter Checkout solution is targeting a new marketplace and a huge one at that, and we expect a number of IBM’s business segments to significantly benefit from this, in particular middleware software and technology services.
Targeted advertising can be a concern for customers
While IBM is touting the new solution to be equally beneficial to both retailers and customers with greater reach and impact for retailers and a better, interactive shopping experience and improved efficiency for customers are obvious concerns of unwarranted third-party advertising. Especially as there is a mobile component there are chances of that too many ads start popping on smartphones that support Smarter Checkout.
This could be a real concern for IBM’s Smarter Checkout as excessive advertising would lead to a potential customer backlash and make retailers think twice before opting for the program. Something IBM definitely would not want and hopefully will not let happen.
We have a $187 Trefis price estimate for IBM based on our DCF valuation model, roughly the same as the market estimate.
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