| July 23, 2010
Retailers need multiple channels
Retailers will miss out on enormous sales opportunities if they do not market to their customers consistently across multiple channels, according to research by the Australian Centre for Retail Studies (ACRS). The study shed light on how Australian consumers value different channels in terms of their pre-purchase, purchase and after-sales behaviour.
While online sales are expected to increase more than 13 per cent annually over the next two years, cross-channel sales are expected to grow by 17 per cent. Indeed, the report indicated that by 2012 almost half of all retail transactions will be executed by the consumer crossing channels. Today, approximately 36 per cent of Australians purchase online at least once a month, with six per cent purchasing a product once every week.
The ACRS surveyed 1000 consumers online across different generations. They were presented with a range of traditional retail channels, such as stores, Internet, catalogues, radio, and TV as well as emerging channels. The respondents were given a hypothetical scenario to purchase a product from one of three categories: clothing and footwear, leisure travel, and consumer electronics, and were asked how the channels impacted on their behaviour, enjoyment, satisfaction and loyalty.
The report found that social media, SMS, and iPhone applications are among the most popular ways retailers communicated with consumers. Sixty-eight per cent of Australians have registered to receive e‑mails from retailers and 19 per cent opt-in to receive communications via SMS. Furthermore, seven per cent of consumers engage with retailers through an iPhone application and an impressive 23 per cent of consumers engage through social media.
Sean McDonell, manager of national sales for Salmat, a report sponsor, noted that his company will send 300 million e-mails and 60 million SMS messages on behalf of its retail clients this year
"Consumers really do value a good multi-channel experience from retailers before, at the point of, and even after purchase. We've known for some time that multi-channel retailers are luring more profitable customers, but the new ACRS research clearly demonstrates that in the Australian marketplace, consumers engaged across multiple channels also shop more frequently, spend three-to-four times more, and display greater loyalty," McDonell said.
Dr Sean Sands, research fellow at the ACRS, said that the results suggested that if a retailer was going to provide consumers with multiple channels, it was not sufficient to offer just a selection of traditional channels such as the Internet and a catalogue. "Retailers that engage consumers effectively across new and emerging channels (such as the iPad, iPhone applications, and social media) have a greater impact on shopper behaviour.
"Truly innovative retailers are increasingly offering additional channels for consumers to interact before the purchase, at the point of purchase, and after purchase. Myer is a great example of an Australian retailer that is striving to make developments in each of these areas, and across multiple new and emerging channels." he said.
The ACRS research suggested that multi-channel consumers were typically the younger generations, which means that marketing to multi-channel customers is likely to increase even further.
M&A activity expected to increase
Seventy-eight per cent of M&A practitioners expect the level of deal making in their region to increase over the next year, according to a global merger market survey commissioned by IntraLinks. The survey of 160 global deal-makers from advisory, corporate, and private equity companies across the world also found that 52 per cent of respondents expected an improved market and financial conditions to be the principal drivers behind the expected uptick in M&A activity.
Highlights of the study include:
* North American deal-makers are most optimistic about deal activity -- 89 per cent of North American respondents expected the level of deal activity to increase over the next year, while 79 per cent of respondents felt this way in Latin America, followed by 76 per cent in Europe, and 66 per cent in Asia Pacific.
* M&A professionals in the Americas were upbeat about the economy. A clear majority of Latin American respondents (73 per cent) and North American respondents (68 per cent) were positive about the prospects of the global economy in the next year. However, respondents in Asia/Pacific and Europe were more cautious. Just under half of the deal-makers in Asia/Pacific (47 per cent) and Europe (37 per cent) expressed either a neutral or negative view.
* Cross-border deal-making will be at its strongest in Asia/Pacific. Seventy-one per cent of global respondents expected Asia/Pacific to be among the top three regions set to witness the most significant levels of cross-border M&A activity over the next 12 months, with North America second at 62 per cent and Western Europe third at 49 per cent.
"It's very encouraging that the survey shows significant majority of dealmakers are optimistic about the volume of pending activity, " said Matt Porzio, vice president of product marketing at IntraLinks.
Data centre transformation ahead
Data centre transformation will not happen overnight, or be driven by technology developments alone, according to Ovum analyst Ian Brown. "While the unified computing/unified fabric and automation technologies will come to market over the course of 2010/11, we do not expect data centre transformation to become mainstream for another couple of years."
Brown said that the successful implementation of an automated and unified data centre infrastructure will depend on IT management having clearly identified processes and policies in place. In the meantime, developing and refining manual processes will be a prerequisite for automation and DCT.
"Data centre transformation will underpin most companies' IT strategies for the foreseeable future," Brown added.
"Indeed, we expect it to be one of four technology trends that will dominate the managed services landscape from a customer and supplier perspective over the next five years, along with sustainability, smart workplaces, and cloud services.
"DCT is an ongoing strategy and for most organisations will be tied in with cloud computing, sourcing strategies and IT sustainability solutions."
Ovum believes lucrative opportunities for IT service vendors lie in consulting engagements, implementation, and migration to new network infrastructure fabrics, and the adaptation and application of ITIL (Information Technology Infrastructure Library) disciplines to the future unified data centre infrastructure and its operational management.
Mobile banking growth exponential
Mobile banking has seen an increase in usage and in institutions offering the service in the last year, according to studies by IDC Financial Insights In fact, reported mobile banking usage has almost doubled since a survey undertaken a year ago. However, according to the latest survey, while mobile banking may have finally turned the corner with customer acceptance, it is not a mainstream channel and in order to be successful, financial institutions need to be strategic about their mobile offerings. In addition, realistic expectations, an understanding that there are few to no revenue opportunities around mobile currently, and the backing of senior management, are all vital to mobile success.
According to the report, the challenge with mobile banking continues to be that it introduces a new cost structure without providing opportunities for revenue. Consumers have become accustomed to having more for free, and the convenience of mobile banking so far does not appear to be something that people are willing to pay for. However, enhancements to mobile platforms -- including the addition of adding deposit capture and payment solutions -- will provide more opportunities for financial institutions to gain some revenue opportunities. IDC Financial Insights recommends that financial institutions begin expanding what they offer, marketing these offerings as easier to use, and providing more opportunities around payments and fund movement. Financial institutions that can capitalise on this will be better positioned to both obtain and retain customers.
Key findings include:
* Usage was up across all channels, requiring bankers to manage more transactions across an ever-expanding portfolio of delivery options.
* The financial services industry should leverage its branch network to compete against potential non-traditional entrants that lack the brick-and-mortar infrastructure.
* SMS is the most popular form of mobile banking.
* Customised alerts and payments outside of network are gaining in popularity, while check image view and getting rate information on the mobile device appear to be fading.
"Consumers are transaction and information happy, and the branch continues to be as popular as ever," said Marc DeCastro, research manager of consumer banking and credit at IDC Financial Insights.
"The financial services industry recognises the importance and advantage it has with its brick-and-mortar branch networks, evidenced by continued branch investment. Our survey, however, shows that consumers are getting more and more comfortable opening accounts outside of the branch. While many financial institutions have jumped into the mobile banking space and are offering solutions, some are still pondering their entrance."
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