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Forget online and offline. When it comes to shopping and payment, think omnichannel

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Forget online and offline. When it comes to shopping and payment, think omnichannel 1

By Ralf Gladis, Co-Founder and CEO of the international Payment Service Provider Computop

Today retail is part business administration, part psychology. Forget distribution channels, they belong in the dusty past. Customers now demand a more flexible approach to retail allowing them to buy what they want, when they want, where they want, and pay for it in a way that suits them. It’s called omnichannel and retailers who are succeeding are those that long ago forgot about separate, unconnected spheres of shopping with different ranges, different prices and different ways to pay.

The spotlight no longer falls on the product, but on a disparate range being available to the customer through an omnipresent approach, both offline and online. It’s a challenge because the integration of independent routes to market, behind which there are channel-specific optimised IT systems and logistics processes, has to be integrated into one consistent unit. Regardless of the difficulties, however, any hesitation in achieving an omnichannel strategy, will open the door to competitors, even in these straitened Covid-19 times.

The fact is that customers have never had a greater choice in shopping sources, and if they don’t feel they are getting what they want, they are very quick to express their displeasure across Internet forums for all to see. One day they go into a physical store, the next they order from their sofa, three days later they purchase something through their mobile on the move. If there’s a problem, or they want to return an item, they expect the retailer to make this straightforward and manage it in one simple transaction.

As omnichannel has been adopted by more retailers, they have built IT systems that resemble a virtual warehouse in which goods are stocked for distribution to any channel, anywhere, ordered by anyone. Store employees have the same access to product data as a customer using an eCommerce outlet. An integrated omnichannel merchandise management system offers clothing retailers in particular, with their seasonal product ranges that are still planned in advance, great opportunities to improve service, increase customer loyalty and at the same time optimise warehousing, sales and increase margins. These systems work because the underlying technology ranges from enterprise resource planning and customer relationship management to the multifaceted interaction of accounting and payment.

Ralf Gladis

Ralf Gladis

Despite retail not being in the vanguard of digital change, the remarkable technology developments made in recent years have provided customers with multiple choices in how they shop and how they pay. These include: click and collect, click and reserve, click and deliver, instore order, instore return, card payment and of course, cash payment.

Omnichannel is categorically not about the demise of the physical store. Many customers visit shops having already read all the Amazon reviews and with an understanding of price, but they want to touch the goods, and they want to talk to an assistant. If all physical shops were to close, online retailers would suddenly experience a sharp rise in returns, and the ‘showrooming’ element of physical shopping would be detrimental to brands, and disappointing for customers who still look for the kind of retail experience that only visiting a store can provide.

Consolidating payment mechanisms also has an important role to play in the adoption of omnichannel. Payment methods traditionally offered at the POS are different, and wider, than those online and if retailers continue to use different payment service providers (PSPs) for in-store transactions than for goods purchased online they are storing up problems for themselves.

This can be managed by locating payment and data with a service provider who supports e-commerce, m-commerce and POS from a single source anywhere in the world using common technology. This guarantees true omnichannel reporting with consolidated evaluation of all sales and transactions, wherever they occur.

The other important element is that at the point of payment customer and card data must be protected. In store retailers should use terminals at the POS that support the P2PE security standard of Visa and Mastercard, ensuring that data is encrypted. Online, retailers will be aware that they need to implement Strong Customer Authentication (SCA), the standard developed under the new Payment Services Directive (PSD2) to enhance the security of credit and debit card payments.

The task of retailers today is to think about omnichannel as a way to reach customers where they are, to ensure goods are available across all channels and to deliver an experience that is equally valuable whether it’s on the high street, on a mobile phone, in a mall or sitting at a desk.

 

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Audi aims to sell one million cars in China in 2023

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Audi aims to sell one million cars in China in 2023 2

BEIJING (Reuters) – German premium automaker Audi aims to sell 1 million vehicles in China in 2023, versus 726,000 vehicles in 2020, the brand’s China chief Werner Eichhorn said on Wednesday.

Audi, which is making cars in the world’s biggest auto market with FAW Group, will also add more products in China, Eichhorn said. Audi’s rivals include Daimler and BMW.

(Reporting by Yilei Sun and Brenda Goh; Editing by Himani Sarkar)

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Analysis: Pricey U.S. stock valuations put burden on earnings to keep rally going

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Analysis: Pricey U.S. stock valuations put burden on earnings to keep rally going 3

By Lewis Krauskopf

NEW YORK (Reuters) – U.S. corporate results and profit outlooks are becoming increasingly important in sustaining investor optimism in a stock market rally that has driven valuations close to a 20-year high.

With fourth-quarter reports starting to pour in, the benchmark S&P 500 is trading at 22.6 times earnings estimates for the next 12 months, according to Refinitiv Datastream. That price-to-earnings multiple (P/E) — a common benchmark for valuing stocks — is well above the 15.3 long-term average and has been climbing since the market bottomed in March.

Investors’ rationale for the historically high valuations has rested on expectations of a growth bounce as the economy emerges from COVID-19 shutdowns, massive fiscal and monetary support, and equities’ relative attractiveness to bonds.

But with the S&P 500 up about 70% from its March lows, the earnings season could present an important test of whether the rally has run ahead of fundamentals, a key worry of investors who believe unparalleled fiscal and monetary spending have fueled excessive risk-taking.

Stock “return expectations are greatly dependent on the earnings rebound in 2021,” said Chris Haverland, global asset allocation strategist at Wells Fargo Investment Institute.

S&P 500 company earnings are expected to rise by 24% in 2021 after falling 15% in 2020, according to Refinitiv data as of Friday, with reports that could shed light on prospects for 2021 starting to come in more heavily this week.

So far, results have been stellar: Of the 26 S&P 500 companies that had reported as of last week, 88% beat fourth-quarter earnings estimates, a rate tracking to be “one of the strongest in history,” BofA Global Research said in a note on Tuesday.

Among those recently reporting was Goldman Sachs Group Inc, which posted a blockbuster fourth-quarter profit on Tuesday. Goldman executives warned, however, that the capital markets activity that fueled results lately will probably slow down.

Haverland draws parallels between the current market and the emergence from the financial crisis a decade ago. Similar to 2020, expanding valuations helped fuel the stock market in 2009, as investors anticipated an economic rebound, Haverland said.

“In 2010, that’s where you saw the earnings growth kind of catch up, … and we think that’s going to play out similarly in 2021,” Haverland said.

Investors also hope the earnings season will help them determine to what degree equity valuations are justified. The equity risk premium, which compares the earnings yield on stocks to the yield for the U.S. 10-year Treasury bond, currently favors equities, according to Keith Lerner, chief market strategist at Truist Advisory Services. The S&P 500 has beaten the one-year return for the 10-year Treasury note by an average of 10.3% when the level of the risk premium was where it stood at the end of 2020, he said.

“Absolute valuations, by any historical measure, are extremely high,” said Lerner. “However, so is everything else, and you still have to look for relative investment opportunity.”

Many are also keeping a close eye on the size and timing of fiscal support under President-elect Joe Biden, which is expected to be a key factor in determining investor risk appetite in coming months.

In her Senate confirmation hearing on Tuesday, Treasury Secretary nominee Janet Yellen urged lawmakers to “act big” on the next coronavirus relief package after Biden last week outlined a $1.9 trillion stimulus proposal as part of a domestic policy agenda heavy on government spending.

Supportive fiscal and monetary policy “puts a floor under the market” that signals policymakers “will do whatever it takes to get both the market and the economy from this point to the other side of this,” said Liz Young, director of market strategy at BNY Mellon Investment Management.

(Reporting by Lewis Krauskopf; editing by Ira Iosebashvili and Leslie Adler)

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Volkswagen says China car sales, production hit by chip supply shortage

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Volkswagen says China car sales, production hit by chip supply shortage 4

BEIJING (Reuters) – German automaker Volkswagen AG lost sales of tens of thousands of cars in China as a global chip supply shortage impacted its production in December, the head of its China operations, Stephan Wollenstein, said on Wednesday.

Volkswagen is the biggest foreign automaker in China, the world’s biggest car market.

Global automakers including Ford Motor Co, Toyota Motor Corp and Nissan Motor Co Ltd have said they would cut vehicle production this month due to a shortage of semiconductors.

(Reporting by Yilei Sun and Brenda Goh; Editing by Tom Hogue)

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