1. The Empowered Customer:
Deliver What They Want, When They
Want It and Profit Big
An InformationWeek Webcast
Sponsored by

2. Webcast Logistics

3. Today’s Presenters
Craig Hayman,
General Manager,
IBM Software Industry Solutions
Charles Qian,
Director of eCommerce Systems,
Technology Services
Cengage Learning

4. Craig Hayman,
GM IBM Industry Solutions
© 2012 IBM Corporation

5. We have a big emphasis on being there for our
customers; having a great experience focused on
being more convenient and having sound advice.
Dan Marks, Chief Marketing Officer
First Tennessee Bank
I love my Mobile apps, lets you pay bills,
check your status of your account at your
finger tips. First TN even notifies you of any
strange activity to verify that it's you.
5 © 2012 IBM Corporation

6. Forget everything you think you know about marketing.
Today's marketing is about understanding your
customers better than they know themselves.
John Lazarchic, VP of eCommerce
PETCO
Love the versatility and durability.
I’ll be surprised if I ever have to purchase
another crate again!
6 © 2012 IBM Corporation

7. We analyze customer information across all channels
to gain insight, take action and create loyalty.
Dev Mukherjee, SVP and President Home Appliances,
Sears Holding Company
Sears Social – Kenmore Elite Washer
“Brilliant, easy to use design with every thing
I want my washer to do and it looks sweet
too…It is a work of laundry art!”
7 © 2012 IBM Corporation

8. Our value chain must be agile and transparent, so we
can deliver the end-to-end customer relationship.
Mark Booth, North America CIO
Whirlpool
We gotten a generous 35 years out of this
workhorse Whirlpool dryer and hopefully we
can get lots more!
8 © 2012 IBM Corporation

9. Empowered Customers are
Reshaping Businesses
44% of companies use 86% use multiple
crowd sourcing channels
4 in 10 smartphone users e Multi channel buyers
search for an item spend 4 to 5 times more
in a store than average
80% of CEOs think 45% check with a friend
they deliver a superior before buying
customer experience…8%
of their customers agree
78% of consumers trust
peer recommendations
9 © 2012 IBM Corporation

10. “The purpose of business is to
create and keep a customer”
— Peter Drucker
…and this has never been more challenging
10 © 2012 IBM Corporation

11. 11 © 2012 IBM Corporation

12. On average, a retailer failed in the United States last year
12 © 2012 IBM Corporation

13. Due to out of stock inventory
13 © 2012 IBM Corporation

14. Stockpiled in supply chains
14 © 2012 IBM Corporation

15. To gain a new customer than retain one
15 © 2012 IBM Corporation

16. We Call the Path Forward
Smarter Commerce
Places the customer Maximizes Capitalizes on social
at the center the insight and mobile
Drives growth Synchronizes your
entire value chain
Increases margins Improves collaboration
and visibility
16 © 2012 IBM Corporation

17. Smarter Commerce:
Transforms the Commerce Cycle
Insight Strategy
Buy Market
Service Sell
Engagement
17 © 2012 IBM Corporation

18. Smarter Commerce:
Ahead of Demand
Analyzes
Optimizes
sentiment
supply
and
chain
anticipates
execution
behavior
Services Creates
and exceptional
delivers customer
flawlessly experience
18 © 2012 IBM Corporation

19. What Does Smarter Commerce Look Like
at Cengage Learning
BUY MARKET SELL SERVICE
New Channels The ability to Seamless end to
Buy what you end service over
open up greater target new offers need, when you the web
buying based on need it, and get
opportunity for customer access instantly
cusatomers behavior
19

20. Smarter Commerce at Cengage Learning:
Reaching B2B and B2C customers through
e-Business
- Charles Qian, Director of eCommerce Systems

21. Cengage Faced Significant Business and Market Challenges
 Attrition/Arbitrage eroding sales of traditional, new textbooks
– Used book market
– Textbook Rentals
– Parallel importation (overseas pricing)
 Escalating costs in Higher Education forcing students to make tough
purchasing decisions
– Reduced government funding in HED
– Tuitions and fees rising quickly, especially in public education
 Legislative pressure forces examination of pricing/delivery models
– Many states have passed, or are considering, legislation to limit price
increases or bundling
– California requiring more use of online, free content in state college system
 Professors are looking for non-traditional teaching tools
– Technology challenges the traditional learning model (Google, Wiki, etc.)
– More “free” information available, although less reliable, has become more
accepted
Cengage Learning reaches B2B and B2C customers through e-business

22. The Cengage Approach to These Challenges
Enhancing the direct-
to-consumer (D2C)
experience and offering
more digital options
using innovative offer
models
Cengage Learning reaches B2B and B2C customers through e-business

23. Cengage Learning Online Retail Solution
Micro-sites
CengageBrain Web Services
Marketplace:
Cengage.com -Homepage Sealed
-Static pages
Media Regional
-My stuff ERP/WS
Other CL websites
OLR
Digital Rights: Payment
-DRM error msg. Gateway
Email Campaign
SSO
Online Selling ePin
Organic SEM IBM
-Search/browse
-Product details
Paid SEM -Shopping cart IP Lookup
-Checkout
-Registration
Address
Affiliates -Order status
-Account profile
Validation Central
-Redeem prepaid ERP/WS
Social Media Tax
Payment
Credit Gateway
Card
Nightly Feed School
Product Order Picker
Meta-Data Orchestration
Order Processing/Print Fulfillment
Cengage Learning reaches B2B and B2C customers through e-business

24. CengageBrain.com Implementation Timeline
 Launched pilot program for ebooks and echapters in December 2005
 Expanded pilot program to iChapters.com storefront in June 2006
 Migrated from 3rd party/in-house hybrid to complete in-house storefront in July
2007
 Rolled out to 4 International regions between 2008 and 2009
 Rebranded to CengageBrain.com in 2009
 Added industry-leading rental program in late 2009
 Creating a single destination for student customers
– First publisher to offer by-chapter purchases
– First publisher to offer a rental program with over 1,200 titles
– Offers a wide range of buy, rent, and digital options
– Consolidated divergent experiences into a single, cohesive brand and user experience
– Simplify purchase, registration, and access of products
Cengage Learning reaches B2B and B2C customers through e-business

25. Homepage with Marketing Pods & Social Media
Cengage Learning reaches B2B and B2C customers through e-business

26. Browse By Category
Cengage Learning reaches B2B and B2C customers through e-business

27. Search Results and Filtering
Cengage Learning reaches B2B and B2C customers through e-business

28. Product Detail Page with All Purchase Options
Cengage Learning reaches B2B and B2C customers through e-business

29. Up-selling and Cross-selling in Shopping Cart
Cengage Learning reaches B2B and B2C customers through e-business

30. QAI Address Validation
Cengage Learning reaches B2B and B2C customers through e-business

31. Digital Dashboard Content Access
Cengage Learning reaches B2B and B2C customers through e-business

32. Rental Options and Contract Management
Cengage Learning reaches B2B and B2C customers through e-business

33. The Results of the B2C Strategy
 D2C online revenue grew on average, over 50% year over year from
2006 to 2011.
 Digital product sales including e-books, e-chapters, and online study
tools, now account for 80% of D2C revenue.
 Over 5 million visitors, 600K registered users, and 450K purchases in
2010
 Over 120K products offered in five regional storefronts
– US
– EMEA
– Latin America
– Canada
– Australia/New Zealand
 2011 Fall Rush saw 100%+ year-over-year increase in traffic and
revenue
Cengage Learning reaches B2B and B2C customers through e-business

34. Keys to Monetizing D2C Digital Content – Closing Thoughts
 Offer choice and value to offset market challenges
– Electronic version of print materials at a significant discount
– Offering rentals to reduce up-front customer costs
 Using digital rights management effectively to drive new business
models
– ebooks and echapter expire after certain time period
– Online course solutions and study tools drive repeat, annualized sales
 Employ a compelling yet simple to use eCommerce environment to
support just-In-time consumer purchase behaviors
– Buy what you need, when you need it, and get access instantly
– Provides new avenue to deliver non-physical products and content more
efficiently, more quickly, and more cost effectively
– Opportunity to gain insight into consumer behavior
– Creates brand loyalty and social/mobile marketing
 Experiment with new selling/delivery models
Cengage Learning reaches B2B and B2C customers through e-business

35. Smarter Commerce: A Complete Portfolio
VALUE CHAIN STRATEGY AND SERVICES
CORE BUSINESS SOLUTIONS
BUY MARKET SELL SERVICE
Intelligent and Personalized Customers and Anticipates
optimized supply and relevant offers partners buy what behavior and
chains based on with unified cross- they want, when delivers flawless
demand channel marketing and where customer service
Advanced Analytics
Workload Optimized Systems
35 © 2012 IBM Corporation

36. Smarter Commerce: New Solution
Highlights
NEW!
Supplier Integration and Management
• Optimize and automate supplier interactions
with ILOG Supply Chain Optimization, ECM
Smarter Commerce on Cloud
Case Manager, Sterling B2B Integration and
SPSS
Digital Marketing Optimization
• Transform insights across all digital interactions
including social media into relevant and
optimized marketing execution with Cognos
Consumer Insight, SPSS, Coremetrics and
Unica
Cross-channel Selling
• Sell seamlessly where and how customers
want to buy with Websphere Commerce,
Sterling Configure, Price, Quote and Customer
Experience Suite optimized on Power Systems
Smarter Commerce on Cloud
36 © 2012 IBM Corporation

37. Get Started on Your Journey..
Supply Chain Marketing Digital
Visibility Innovation Transformation
www.ibm.com/smartercommerce

38. Q&A Session
Craig Hayman,
General Manager,
IBM Software Industry Solutions
Charles Qian,
Director of eCommerce Systems,
Technology Services
Cengage Learning