INTERNATIONAL BUSINESS MACHINES CORPORATION

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International Business Machines : Transforming the Retail Experience with Frictionless Supply Chain

01/18/2022 | 01:20pm EDT

As the retail industry continues to navigate fallout from the pandemic, many organizations have turned to digital transformation to support the challenges of supply, demand and logistics. This has been critical to help navigate the unprecedented volatility and has accelerated the vision of supply chain executives by 5 to 10 years. We can no longer depend on historical data to make supply chain decisions and looking forward we are not certain how consumer behavior will continue to change over the next few years as we adjust to a post-COVID life. Recent IBM Institute for Business Value research shows just how much has changed in the last two years alone. That's why it's critical to look to real-time data and insights to uncover patterns so we can anticipate and take action on what's needed to best serve retailers and their customers.

Challenge and opportunity

For Party City, the global celebrations category leader, the pandemic presented a unique challenge and opportunity. With the scaling back of large social gatherings, consumers switched to decorating their homes and having smaller-scale events to celebrate momentous occasions and brighten their days. The way in which people shopped also changed. The usual in-store foot traffic was temporarily modified. Party City quickly pivoted to offer safer shopping experiences like home delivery, curbside pickup and buy online, pickup in store (BOPIS). To continue driving sales while still meeting customer and employee satisfaction, Party City needed to simplify their ordering and purchasing processes to provide seamless services to its online and in-store customers.

"The pandemic presented many unique business challenges for retailers and just as consumers have needed to adapt to new ways of shopping, it was imperative that we improve inventory turns, increase speed and reliability of order fulfillment by removing supply chain friction to help deliver on Party City's customer promise.

By revamping our end-to-end omnichannel capabilities with seamless integration of our Salesforce commerce platform and IBM Sterling Order Management systems we're able to power a highly-scalable order orchestration and inventory visibility solution that is helping us continue to successfully pivot towards our next-generation retail format and deliver a blended digital experience." -Mark Miller, Party City CTO

Seeing results

To achieve the desired level of success, Party City maintained their business operations by rapidly deploying and scaling new fulfillment capabilities using IBM Sterling Order Management solution, IBM Sterling Inventory Visibility, to meet shifting shopper demands and expectations in real time. This included adding curbside pickup, same day delivery and ship-from-store as well as evolving their retail locations to operate as decentralized fulfillment centers to quickly, and cost effectively, serve customers as part of their omnichannel strategy and customer experience strategy. Though none of these fulfillment options were available pre-pandemic, by the beginning of phased retail re-openings, these new channels became critical to their integrated fulfillment strategy and helped covert customers at a rate 75% higher than the previous year.

Along with making ship-from-store and curbside pickup available, Party City also created a first for the retail industry with the introduction of self-checkout through the Party City app. This allows customers to shop via the app, complete their order transaction and pick up their items without ever having to transact in-store.

Additionally, to become more agile, responsive, and resilient in their back-office processes, Party City partnered with IBM Consulting to transform its finance and supply chain operations with technologies like AI and automation. The finance transformation roadmap and organizational design, along with the warehouse management strategy, is designed to deliver solutions that improve productivity, reduce overhead cost, and improve service levels to Party City's suppliers and customers, on resilient and integrated platforms.

Adapting and differentiating with innovative technology

Leading retailers have turned to technology to support a new agile way of working responding to the pandemic-related uncertainty in supply and demand. The resulting intelligent workflows help make retail supply chains predictive, automated, agile and transparent. By modernizing critical supply chain processes with open platforms that take advantage of advanced technologies including AI, blockchain, IoT and hybrid cloud, retailers can quickly deploy new and differentiated fulfillment capabilities that help drive revenue growth and customer acquisition.

As retail clients evolve their digital strategy and shift to integrated, resilient and scalable platforms, it will help them improve productivity, reduce overhead cost and respond to increasing priorities around sustainability. All of this allows leading retailers to provide excellent service to their trading partners and, most importantly, to their customers.

Disclaimer

IBM - International Business Machines Corporation published this content on 16 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 January 2022 18:19:20 UTC.


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Financials (USD)
Sales 2022 60 949 M - -
Net income 2022 6 518 M - -
Net Debt 2022 37 748 M - -
P/E ratio 2022 18,1x
Yield 2022 5,20%
Capitalization 116 B 116 B -
EV / Sales 2022 2,52x
EV / Sales 2023 2,36x
Nbr of Employees 282 100
Free-Float 39,9%
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Number of Analysts 19
Last Close Price 128,48 $
Average target price 144,29 $
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Arvind Krishna Chairman & Chief Executive Officer
James J. Kavanaugh Chief Financial Officer & Senior VP-Operations
Juan Antonio Zufiria Senior VP-Global Technology Services
Kathryn W. Guarini Chief Information Officer
Andrew N. Liveris Independent Non-Executive Director
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