IBM is working the reins of its Smarter Commerce initiative by rolling out a new Netezza analytics appliance designed to help retailers churn through petabytes of consumer sales data in real time. With the IBM Netezza Customer Intelligence Appliance, the systems giant is trying to capitalize on its contention that online activity is becoming increasingly important for retailers, so they can’t afford to not understand customer behavior and improve the web experience.

According to the IBM press release, “70 percent of a customer’s first interaction with a product or service takes place online,” which underscores the need for analyzing customer activity to find out what they really want. If consumers connect with a retailer’s site and enjoy the experience of shopping there, they’re less likely to spend their money on any of the countless other sites selling the same goods.

Of course, many large retailers — especially those that can afford IBM Netezza systems — also have brick-and-mortar stores, and IBM isn’t omitting those operations. The appliance actually aggregates data from in-store and mobile shopping, as well as online shopping, to let retailers connect the dots between activity across the different channels. In theory, all this information should help stores create better promotions, target specific user types, and perhaps even optimize website or physical-store design.

The new Netezza appliance also incorporates business-intelligence software from IBM’s Cognos line and specialized retail analytics software from IBM business partner Aginity.

When IBM talks about the new appliance handling petabytes of data, however, it’s not talking (at least directly) about the type of unstructured data that has made Hadoop such a hot technology in the big data space. Essentially an enterprise data warehouse, Netezza is SQL-based and therefore ideal for structured data such as customer records, whereas Hadoop is all about unstructured or semi-structured data coming from sensors, social-media streams, server logs and other non-traditional sources of business data.

One step on the path to big data nirvana is combining structured and unstructured data to gain an even more-complete view of what customers are doing and feeling, which is something IBM is trying to do through tighter integration of Netezza with IBM’s Hadoop-based Infosphere BigInsights software. It’s not alone in this quest, as rivals Teradata, EMC Greenplum, Oracle and HP all have similar strategies in place with their respective components.

However, if revenue growth has anything to do with how IBM and other vendors continue to expand their big data capabilities — and it does — we’re only seeing the tip of the iceberg in terms of what will be possible. In IBM’s fiscal fourth quarter, business analytics revenue was up 16 percent year-over-year, Smarter Commerce-related initiatives were up 25 percent, and Netezza revenue jumped up 70 percent.

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Pardon us Americans as we act surprised, but it turns out that we have one more thing in common with our Euro brethren: a growing number of us dislike shopping in stores. According to Kelkoo estimates, online spending in the European Union is projected to continue its upward trend, which is said to reach somewhere in the neighborhood of 2 billion before year’s end. If the estimate holds, this would be a 16 percent increase over the 0 billion raked by e-tailers during 2011, and is naturally assumed to come at the expense of traditional brick and mortar outfits, whose growth is projected to increase by a mere 1.8 percent.

The data gathered also suggest there’s significant room for expansion, however, as online spending accounted for just 7.8 percent of all EU retail sales in 2011, with the UK, Germany and France being responsible for a whopping 71 percent of that tally. The 16 percent projected growth is a slight decline from 2011, which saw EU online spending grow by 18 percent — although, Europe’s habit for click-and-ship continues to outpace the US, which grew by only 12.8 percent in 2011. Now, since you’ve crammed all these numbers, why not check the funny pages?

[Shopping button via Shutterstock]

EU online spending estimated to grow 16 percent, reach €232 billion in 2012 originally appeared on Engadget on Fri, 20 Jan 2012 21:45:00 EDT. Please see our terms for use of feeds.

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Oracle has acquired Endeca, a Cambridge, Mass.-based company that analyzes and provides business intelligence for unstructured data. Endeca, which has been around since 2001, represents an expansion of the big data focus Oracle unveiled at its OpenWorld conference earlier this month.

I spoke with Endeca Chief Strategist Paul Sondregger about a month ago, and he explained that Endeca’s flagship Latitude product is like “BI beyond the data warehouse,” in that it takes into account a wide variety of unstructured sources and lets users derive insights from it even if they don’t know what questions to ask.

Endeca’s technology doesn’t rely on algorithms to detect patterns, but tries to enable a “dialogue” between the user and the data. Sondregger used the analogy of looking for something in a Home Depot brick-and-mortar store versus searching for something on the company’s site. Whereas the store is like a collection of unstructured data that requires customers to know what they’re looking for, and then do lots of wandering and asking questions of employees to find what they want, the web site lets them start with a broad category and drill down.

For Oracle, Endeca will be more valuable as a component of an interconnected big data suite rather than as just a standalone product. Earlier this month, Oracle announced forthcoming appliances focused on analyzing unstructured data, including via Hadoop and a NoSQL database. Endeca’s product could mesh well with that broader strategy, or maybe could help Oracle do large-scale enterprise search. In fact, Sondregger told me that several intelligence-industry customers are running Endeca on top of Hadoop, one of them in an environment containing 24 billion records.

With one acquisiton under its belt just a few weeks after officially getting into the big data space, one has to wonder what else Oracle has planned. If it wants to go “all in” on big data, there is no shortage of interesting companies out there that could bring real value to Oracle’s strategy.

Image courtesy of Flickr user Chika.

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The fact that we all have technology at our fingertips has caused a disintermediation within traditional commerce, and significant disruption for retailers big and small. Consider the impact of Netflix on Blockbuster and local video stores, or how Amazon upended book buying. What we know for sure is that innovation, and the speed at which a business is able to innovate, is no longer an option. Rather, it is paramount to survival.

In the next decade, we’ll see more change in the commerce landscape than in the past 100 years combined.The reason? Four mega trends being driven by consumers are dramatically changing buying and selling habits as we know them. Merchants of all types—from brick-and-mortar retail outlets to non-profits, to manufacturers and even those selling online, need to ensure they’re keeping pace or risk going the way of Blockbuster, Borders and the dinosaurs.

Mobile

Smartphone sales are on such an aggressive upward trajectory that some estimates suggest there will be up to 50 billion connected devices (beyond just smartphones) by 2020 and each consumer will have approximately seven devices connected to the Internet. Beyond just making phone calls or sending text messages, people regularly look up directions, research products while in-store, chat and compare with friends and family, search for deals and even pay for their morning coffee with their mobile phone.

These intelligent, always-connected devices and the consumers using them to their full potential are pushing merchants to react quickly, or die. Businesses that don’t have a mobile commerce strategy are losing out on significant revenue, and that’s only going to continue to accelerate.

Local

Not long ago the most impressive features of online shopping were the ability to find out which stores were located in your neighborhood and determine which might have your item in.

Now, there’s an app for that!  By leveraging inventory sharing and local mapping, buyers can now access real-time inventory data while on the go, browse through sales and deals tailored to their individual preferences and even get suggestions based on things like frequently visited restaurants, clubs, hotels and more. This is powerful stuff.

The merging of mobile and local is also leading to the creation of entirely new business models and opportunities for merchants and consumers alike. A great example is that people are now able to get paid for snapping photos while out and about in their cities. How cool is that?

If you’re not taking full advantage of the ability to reach customers based on stated preferences and proximity, you’ve already fallen behind.

Social

Commerce is an inherently social endeavor. Not long ago, a customer would try on a sweater while in-store and ask her friends for feedback before purchasing. Today that same customer can just as easily try on the sweater, snap a photo of herself wearing it, share it on her social network of choice and get a ‘thumbs up’ or ‘thumbs down’ within minutes from multiple friends in various locations. There are apps that will share what a person’s friends have purchased on social sites or allow users to share local recommendations with one another.

The explosion of consumer interest in social networks has spawned the so-called social commerce opportunity. In fact, transacting within social networks is predicted to go from a billion opportunity in 2011 to a billion opportunity by 2015.

The challenge for merchants? How to effectively leverage a customers’ social graph to build an additional commerce channel within the social networks themselves. We’re beginning to see early signs of this with some of the group gifting apps and the ‘social shopping mall’ concept that allows sellers to offer their products directly to hundreds of millions of Facebook users.

Digital

Digital has changed everything—including how we use and think about currency. People now have the ability to bump phones together to pay off a friendly wager, order and pay for a meal entirely via a mobile device and transfer paper checks into their account by snapping a photo with their mobile phone.

Similar changes are occurring in-store. Consumers can pick up an item off the shelf, scan the barcode using their mobile phone and immediately find out if the same item is available online or down the street for a lower price.

The digital revolution is here, it’s real and it has leveled the playing field for both buyers and sellers of all shapes and sizes.

The Future

As the mobile, local, social and digital trends drive our lifestyles, the pace of innovation will determine which businesses will go boom or bust. At the end of the day, merchants want to return to the business of being merchants. They want to find the best things to sell to consumers and they want to create the best shopping experience a consumer can have. Those that are nimble and seek to adapt quickly to emerging consumer behaviors will not only survive, but thrive. One thing is for sure—the future will look nothing like the past.

What do you think commerce will look like in 5-10 years?

Matthew Mengerink is vice president and general manager of X.commerce, the first end-to-end, multi-channel commerce technology platform designed for all the ways consumers choose to shop today. Matthew leads the integrated open commerce platform group and is responsible for ensuring that eBay Inc. builds a strong, robust developer community across the eBay, PayPal and GSI technology platforms to amplify merchants’ businesses.

To hear more about mobile payments, check out our GigaOM Mobilize conference Sept. 26 and 27 in San Francisco.

Image courtesy of Flickr user Johan Larsson.

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