IBM: Enthusiasm for online retail outpaces behaviour

29 January 2015

In a recently released study IBM finds there is a discrepancy between consumers’ stated behaviour preference and their actual behaviour. This discrepancy is present both in their preference for online consumption as well as their willingness to share information. According to IBM this shows that retailers can grow further by closing the gap.

Digital retail channels
Digital channels provide businesses with a plethora of ways of reaching their customers, as well as increasingly large numbers of ways of collecting (or, through analytics, discerning) many of their customer’s preferences and interests, their location, responses to prior communications, browsing and purchase behaviour, relevant social messaging and so much more to infuse context into their messaging. By better understanding their customers, businesses are better able to tailor contextual messages that best fit the customer. Access to the customer’s information may therefore been seen as beneficial for the sales process. For consumers digital channels also offer many benefits, such as the possibility of comparing products and prices and to find the best buy.

Online retail - IBM Institute for Business Value

IBM recently released a study into consumer sentiment and their preferred channels used while shopping, titled ‘Shoppers disrupted: Retailing through the noise’. The IBM Institute for Business Value analysed survey data from over 110,000 responses in 19 countries between 2011 and 2014.

Consumer enthusiasm outpaces behaviour
The main conclusion of the study is that there is a divergence between the stated behaviour preference of consumers and their actual behaviour, related to the digital/physical retail division. While 43% of consumers say they prefer to shop online, only 29% actually made their last purchase online. In some product categories such as youth apparel or home décor, there is a nearly 20% gap between the percentage of people that say they enjoy shopping online and the percentage of people who actually made their last purchase online in those categories.

43 percent of consumers prefer shopping online

When it comes to sharing information, the survey underlines another discrepancy between statement and behaviour. 28% of the respondents are willing to part with more and more personal information, such as current location information, for trusted businesses. However, according to IBM, this could be much higher as 42% of consumers say to see the potential benefit of sharing their location with retailers.

sharing of location via GPS

More than half of the respondents (54%) see the benefit of sharing mobile for text with retailers, but only 42% would actually share this information, although this number went up from 38%.

Sharing mobile for text with retailers

The results of the study, according to IBM, signal that retailers have an opportunity to better meet consumer expectations online. “With consumers switching seamlessly from online to the store it might appear that retailers have finally struck the right balance, but IBM’s study identifies a significant gap between what shoppers want from retailers and what they are getting today,” explains Sarah Diamond, General Manager at IBM Global Business Services. “Retailers may not be doing enough to meet consumer expectations shaped by digital experiences outside of retail -- from location-based services to preference-based apps. The good news is that this gap also indicates the potential of growth for retailers who can meet those consumer expectations.”


More news on


Debenhams administrator handed legal threat from Sports Direct

24 April 2019

Earlier in April 2019, the long-suffering high street entity of Debenhams finally collapsed into a pre-pack administration, wiping out equity for shareholders including Sports Direct. Now, Mike Ashley, the controversial owner of Sports Direct, has threatened legal action to remove FTI Consulting from its role as Debenhams’ administrators, following the obliteration of his stock in the company.

As the retail sector in the UK continues to endure a torrid period, British retail stalwart Debenhams endured a spectacular fall from grace. The high street ever-present was founded in the early 19th century, with a single store in London, before expanding to 178 locations across the UK, Ireland and Denmark. However, following a string of profit warnings and several rounds of lay-offs, the company engaged advisors from Big Four firm KPMG to consider its options in the Autumn of 2018.

At the time, Debenhams Chairman Sir Ian Cheshire insisted that the chain was not heading for insolvency, or that it was actively embarking on a company voluntary agreement (CVA). Nevertheless, Debenhams fell into administration in Spring 2019. The news saw Chad Griffin, Simon Kirkhope and Andrew Johnson of FTI Consulting appointed as joint administrators, immediately selling the retailer to a newly incorporated company controlled by secured lenders.

Debenhams administrator handed legal threat from Sports Direct

The pre-pack administration deal meant Debenhams was able to access significant additional funding, preserving 165 of its stores, though plans to close around 50 under-performing stores in the next three to five years remain in place. At the same time, the deal maintained its commercial relationships with suppliers, employees and pension holders. However, it also effectively led all of Debenhams’ previous shareholders – including the retail magnate Mike Ashley – to lose their equity.

Ashley’s Sports Direct firm had increased its stake in the department store chain in 2018, but stopped just short of the 30% stake which would require it to put in a formal offer to fully acquire the business. The transaction fuelled speculation that Ashley was waiting for the opportune time to acquire Debenhams, particularly in the wake of his swoop for House of Fraser. Ashley’s deal there enabled Sports Direct to buy the firm out of administration in a pre-pack deal, allowing the new ownership to controversially wash its hands of the company’s pension scheme in the process.

While some believed this was Ashley’s intent for Debenhams, FTI’s decision to sell the store to its creditors has instead resulted in a sizeable loss for Ashley. The hit of around £150 million from his loss in Debenhams comes after an analysis by The Sunday Telegraph suggested the tycoon had accrued “a sprawling web of stakes” in rival companies, and that he may be nursing losses of more than £500 million.

Bad press

Ashley – who recently lost a complaint ruling by British press regulator Ipso allowing the Times to note that he shared many characteristics with North Korean dictator Kim Jong-un – has been outspoken in his contempt for FTI since the news broke of Debenhams’ sale. The Sports Direct CEO has called for the resignation of FTI from its role as administrator, after his stake in the department store chain was wiped out. The Guardian stated that a letter to FTI saw Sports Direct’s lawyers even threaten legal action to remove the advisory firm as administrators because of a conflict of interests.

According to the reports, the document claimed, “[Sports Direct] will do everything available to it to unwind the damage caused to the company and other stakeholders (including large and small shareholders) by the events of today including but not limited to challenging the appointment [of FTI as administrators] and all consequences of it.”

The letter allegedly claims that FTI had been involved with Debenhams since the second week of February, and had engaged with the group’s lenders. The legal team reportedly suggested that this would consistute a conflict of interest, because FTI sold the retailer’s operating companies to the same lenders via a pre-pack administration.

This comes weeks after Sports Direct was itself accused of becoming overly cosy with a professional services firm, which has seen its auditor Grant Thornton placed under scrutiny for its continued role with the firm. In 2018, it was reported that Grant Thornton was set to stand aside from the role due to competition rules. It had held the role since before Sports Direct floated on the London Stock Exchange in 2007, while Phil Westerman, the Partner at Grant Thornton responsible for signing off Sports Direct's accounts, had himself undertaken the work for five years. 

Neither situation is understood to have changed, leading to the questioning of the independence of Grant Thornton’s auditing work with Sports Direct. Such is the level of bad press surrounding the retailer, that the Big Four of the accounting and advisory world – wary of incurring a new scandal of their own – are said to have ruled out taking the contract over.