Retail Industry Vertical February 2011

1. Retail Industry Vertical February 2011 Please note the speaker notes provided for each slide. In particular, notice the instructions (for Slide 20) for ensuring that the demo video will play from the hyperlink in this presentation. Creating A Smarter Cross-Channel Experience Integrating Industry Solutions Across Channels

2. Retail Industry Vertical February 2011 AGENDA Industry drivers and execution gaps The solution Customer benefits Demonstration 2

3. Retail Industry Vertical February 2011 AGENDA Industry drivers and execution gaps The solution Customer benefits Demonstration 3

4. Retail Industry Vertical February 2011 Today’s ‘Smarter Consumer’ Sees One Brand, Not Multiple Channels 4

5. Research Product Research Product Research Product Research Product Mobile Call Center Web Schedule Delivery or Pickup Schedule Delivery or Pickup Store Schedule Delivery or Pickup Create Order Create Order Create Order Create Order Initiate/Track Return Initiate/Track Return Initiate/Track Return Cancel Order Cancel Order Cancel Order Cancel Order Schedule Delivery Check Status Check Status Check Status Check Status Pickup Change Order Change Order Change Order Change Order Schedule Store Pickup Schedule Store Pickup Schedule Store Pickup Consumers’ Brand Interaction Is Ever Changing And Constantly Evolving Initiate/Track Return 5

6. 85% of respondents “expect a seamless experience across all channels for a retailer”. 1 Retail Industry Vertical February 2011 They’ve Come To Expect Seamless Cross-Channel Retail Execution 1 Source: “Cross-Channel Brand Interaction:  2010 Consumer Preferences,” Sterling Commerce, DemandWare 6

7. Retail Industry Vertical February 2011 And, Their Expectations Keep Rising 1Source: “Cross-Channel Brand Interaction:  2010 Consumer Preferences,” Sterling Commerce, DemandWare 7

8. Retail Industry Vertical February 2011 And, Retailers Are Responding To Their Customers’ Cross-Channel Expectations 69% In-store pickup of cross-channel orders Currently support (46%); plan to support in 12 months (23%) 1 77% In-store returns of on-line purchases Currently support (57%); plan to support in 12 months (20%) 1 Source: Edge Research Retailer Survey; 2010 8

9. Retail Industry Vertical February 2011 They’re Taking Action To Address Their Customers’ Cross-Channel Expectations 76% Cross-channel order/shipment status tracking Currently support (47%); plan to support in 12 months (29%) 1 76% Single cross-channel view of customer purchases Currently support (40%); plan to support in 12 months (36%) 1 Source: Edge Research Retailer Survey; 2010 9

10. 84% Deliver improved cross-channel capabilities High priority (32%); medium priority (52%) 1 Retail Industry Vertical February 2011 Nearly All Are Focused On Improving Their Cross-Channel Capabilities Source: Edge Research Retailer Survey; 2010 10

11. Retail Industry Vertical February 2011 AGENDA Industry drivers and execution gaps The solution Customer benefits Demonstration 11

12. The Need: Seamless Cross-Channel Retailing Consumer Store Web Mobile 12

13. IBM Sterling Order Management The Solution: Integrated Cross-Channel Execution Smarter Checkout WebSphere Commerce Store Associate Mobile 13

14. Retail Industry Vertical February 2011 AGENDA Industry drivers and execution gaps The solution Customer benefits Demonstration 16

15. Retail Industry Vertical February 2011 Cross-Channel Retailing Directly Impacts The Following Areas • In-Store Pickup • Additional in-store purchases (cross-sell/up-sell) • In-Store Returns • In-store purchases (converting the return back into a sale) • Recovering From Out Of Stocks (OOSs) • OOS item sale (66% of consumers would purchase an OOS item if the retailer could find it at an in-stock location and ship it to the customer) • Companion items (42% of consumers faced with an OOS leave the store without purchasing anything) • Future shopping trips (40% of consumers who experience an OOS shop less often at the offending retailer) • Cross-Channel Sourcing • Avoiding duplicate safety stock • Available-To-Promise Sourcing • Inventory reductions by sourcing from in-transit inventory (before it arrives at the DC) • Sourcing From End-Of-Life (EOL) Inventory • Reduced markdowns by sourcing from inventory pools with excess inventory

16. Cross-Channel Retailing – The Foundation Of Retailing Going Forward Cross-Channel Retailing Results Can Be Estimated Example: $2.9Bn Retailer 18

17. IBM Sterling Order Management The Solution: Integrated Cross-Channel Execution Smarter Checkout WebSphere Commerce Store Associate Mobile 20

18. Buy Online Pick Up In Store – Demo Configuration OverviewSmarter Commerce: Cross-Channel Inventory Visibility (Web, Mobile, Store) IBMSterling Distributed Order Mgmt IBMSterling Store Associate Mobile WebSphere Commerce iPad Touch 3rd Generation Internet Explorer / Windows / Laptop Internet Global Solution Center Dallas, Texas WebSphere Commerce + WebSphere ESB + Sterling SSFS / AIX / IBM System p

19. “Click and Collect” Buy Online Pick Up In Store – Demo OverviewSeamless Cross-Channel Retail Execution (Web, Mobile, Store) IBMSterling Distributed Order Mgmt IBMSterling Store Associate Mobile iPod Touch 3rd Generation WebSphere Commerce Retailer: Madisons Consumer: Tom Watson from Toronto, Canada • Consumer makes purchase on the Web • Requests in-store pickup • Order Management signals store to pick & hold the item • Store Associate accesses pick list via mobile device and confirms • Customer sees an additional item they want but only display model available • Associate uses mobile device to locate the out-of-stock item “Saving the Sale” and completes the financial transaction