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MERCHANTS MAY BE ALIENATING MORE VALUABLE CUSTOMERS THAN THEY THINK

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MERCHANTS MAY BE ALIENATING MORE VALUABLE CUSTOMERS THAN THEY THINK 1

Frank Breuss, Director International Sales at The PPRO Group.

The advent of internet shopping has made the world of commerce a much smaller place. Consumers can now shop without borders and order goods from all over the globe with minimal restrictions. This offers a huge opportunity for retailers to maximise sales and those that offer international services have the competitive edge over other merchants.

Frank Breuss

Frank Breuss

‘Generation Y’ in particular relies heavily on the internet and regularly uses it to shop. As older generations may be a bit weary of the risks of shopping online – i.e. what if my money gets stolen? What if the product never arrives? How can I speak to a customer service department? – younger people tend to be less cautious and are far more open to searching on multiple, unfamiliar sites for the best price on a new TV or ordering a new phone case from China because it’s so much cheaper.

However, retailers are missing out on a huge target of customers from all around the world simply by not considering payments. In fact, research has shown that the payment process can be a major turn-off. Although the younger generation is more comfortable with inter-territory purchases – 67 per cent of 18-24 year olds said they would happily order from an overseas market – a massive 64 per cent of them fail to complete a transaction solely due to the payment process. In contrast to this, only 38 per cent of the over 55s would purchase from overseas. This shows that international retailers absolutely need to offer a variety of payment methods to young people in order to not lose out on such a large portion of their potential overseas customer base.

It’s key that ‘Generation Y’ is being offered trusted and recognised payment methods when shopping online, especially when visiting international merchants. For example, if they are about to purchase a dress from a site in Hong Kong and they don’t recognise any of the payment methods, they won’t want to complete the transaction. Alternative payment methods resonate with the younger audience who are willing to shop internationally and will ensure the sale is finalised, rather than lost.

Payment technologies are also becoming increasingly sophisticated and as ‘Generation Y’ is often considered digitally native, they will also be open to many alternative payment options, which older consumers may doubt and feel uncomfortable using. The easier it is for young people to shop, the more money they are likely to spend.

Generation Y is also very socially active online. Therefore, additional payment methods through social media, including Facebook and Twitter, are providing new opportunities too, especially considering the huge reach of both sites. A Facebook payment service has enormous potential for success considering the size and spread of the network: 1.3 billion people are active on Facebook every month, including 945 million via the mobile app. Whether users will put their trust in these when sending money though, remains to be seen – although, it seems that the younger generation are more tech-savvy and will be more likely to trust this technology. Again, the specific payment methods per country will need to be considered here for international merchants.

This just touches the surface of international payment issues. As you can see there are many factors that need to be considered – age, gender, location and payment preference are all just examples of this. Merchants need to properly consider the best way to make their payment systems accommodate their customer base – otherwise, there will only be a competitor offering the same product, with a more preferred payment method.

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Siemens Healthineers gains EU nod for $16.4 billion Varian buy

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Siemens Healthineers gains EU nod for $16.4 billion Varian buy 2

BRUSSELS (Reuters) – EU antitrust regulators on Friday cleared with conditions Siemens Healthineers’ $16.4 billion acquisition of U.S. peer Varian, paving the way for the German health group to become a world leader in cancer care therapy.

The European Commission said Siemens Healthineers pledged to ensure that its medical imaging and radiotherapy equipment will work with rivals in return for its approval, confirming a Reuters story. The pledge is valid for 10 years.

“High quality medical imaging and radiotherapy solutions are crucial to diagnose and treat cancer. The efficiency and safety of treatment relies on the ability of these products to work together,” European Competition Commissioner Margrethe Vestager said in a statement.

Varian is the leader in radiation therapy with a market share of more than 50%. The deal received the U.S. antitrust green light in October last year.

 

(Reporting by Foo Yun Chee)

 

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Battling Covid collateral damage, Renault says 2021 will be volatile

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Battling Covid collateral damage, Renault says 2021 will be volatile 3

By Gilles Guillaume

PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19 pandemic, including a shortage of semiconductor chips, that could make for another rough year for the French carmaker.

Renault reported an 8 billion euro ($9.7 billion) loss for 2020 which, combined with gloomy take on the market, sent its shares down more than 5% in late morning trading.

“We are in the midst of a battle to try to manage a difficult year in terms of supply chains, of components,” Chief Executive Luca de Meo told reporters. “This is all the collateral damage of the Covid pandemic… we will have a fairly volatile year.”

De Meo, who took over last July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts. There were early signs of improving momentum as margins inched up in the second half of 2020.

The group gave no financial guidance for this year, although it said it might reach a target of achieving 2 billion euros in costs cuts by 2023 ahead of time, possibly by December.

Executives said they were confident the carmaker could be profitable in the second half of 2021, but that they lacked sufficient market visibility to provide a forecast.

Renault struck a cautious note, saying it was focused on its recovery but warned orders had faltered in early 2021 as pandemic restrictions continued in some countries.

The group is facing new challenges as the European Union tightens emissions regulations and after rivals PSA and Fiat Chrysler joined forces to create Stellantis, the world’s fourth-biggest automaker.

The auto industry endured a tough 2020 but a swift rebound in premium car sales in China helped companies such as Volkswagen and Daimler to weather the storm.

Auto companies globally have since been hit by a shortage of semiconductors that has forced production cuts worldwide.

“The beginning of the year has shown some signs of weakness,” De Meo told analysts, but added the chip shortage should be resolved by the second half of 2021. “We have taken the necessary measures to anticipate and overcome challenges.”

Renault estimated the chip shortage could reduce its production by about 100,000 vehicles this year.

SHARP HIT

The group was already loss-making in 2019, but took a sharp hit in 2020 during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.

Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020. The group posted negative free cash flow for 2020.

The 2018 arrest of Carlos Ghosn, who formerly lead the alliance between Renault and Nissan, plunged the automakers into turmoil.

In a further sign that the companies have been working to repair the alliance, De Meo told journalists that Renault and Nissan will announce new joint products together in the coming weeks or months.

Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros or 3.5% of revenue.

Analysts at Jefferies said the operating performance was better than expected. Sales were still falling in the second half, but less sharply.

Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development as it focuses on redressing its finances. It is also pivoting more towards electric cars as part of its revamp.

It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.

De Meo told journalists on Friday that the French carmaker will make three new higher-margin models at its Palencia plant in Spain, where manufacturing costs are lower, between 2022 and 2024.

($1 = 0.8269 euros)

(Reporting by Gilles Guillaume and Sarah White in Paris, Nick Carey in London; Editing by Christopher Cushing, David Evans and Jan Harvey)

 

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UK delays review of business rates tax until autumn

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UK delays review of business rates tax until autumn 4

LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.

Many companies are demanding reductions in their business rates to help them compete with online retailers.

“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.

Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.

($1 = 0.7152 pounds)

(Writing by William Schomberg, editing by David Milliken)

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