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Mind the Gap



Caroline Ahmed

Gulf between expectation and reality on mobile experiences puts banks at risk of losing customers

The London Olympics. Facebook’s IPO. Obama vs Romney. A decade from now, these will no doubt be some of the events that we’ll look back on as the most significant and memorable of 2012. But, for business, the biggest long-term legacy of 2012 may well turn out to be that it was the year when, at last, mobile commerce made the jump from hype to reality. For the first time, the question now facing many brands is not whether, but how, they should be capitalising on opportunities presented by m-commerce. And brands are having to come to terms with the fact that, for the first time, consumer expectations for mobile functionality and user experience are running well ahead of the services their organisations are actually delivering.Caroline Ahmed

A ‘big bang’ event
At Foolproof we believe that what’s happening with mobile devices and the mobile internet is every bit as profound as the web revolution of the late 1990’s. We see it as a ‘big bang’ event: mobile is creating new time and space for consumers. Time that was previously unproductive or inert is now filled with mobile interaction. What are users doing with this time? What brands are they engaging with in this new, very intimate, digital space? Which tools and services create value for them…and which are just creating noise? Knowing the answers to these questions can be the difference between success and failure in the design of digital services.

Right now, the mobile marketplace is still forming. This represents an opportunity for companies to design services to win a share in this new, digital environment and protect competitive advantage for years to come.

In order to help our clients better understand the needs and demands of the mobile consumer, Foolproof recently undertook a major research study – Going Mobile. This rich body of insights was collated over a five-month period and included interviews with brands, a two-week diary study with respondents, and quantitative validation with 500 smart phone users.

One chance to make a first impression
Going Mobile found that today’s consumer views the quality of their mobile interactions with brands as being an important indication of the overall quality of that brand. Respondents said an unsatisfactory mobile experience engendered feelings of mistrust in a business and, in nearly 50% of cases, mobile users stated that they had already ceased dealing with a brand as a direct result of the mobile service or ‘app’ being below par.

When asked to choose words to describe a company which designs or offers a poor mobile app or service, 38.2% stated ‘unprofessional’, 35.8% ‘poorly-managed’, and 35.2% ‘out of touch with their customers’. On the flip-side, organisations delivering a ‘great’ mobile service or app tend to benefit from very positive brand associations. Initial impact is all-important in mobile, with 80.6% of people stating that a mobile service or app has to make a strong first impression if they are to continue using it.

An emotional bond
Going Mobile highlighted the fact that, unlike their other devices, consumers have a strong sense that their smartphone is ‘alive’ and an extension of their own body and personality. There is very real affection and an emotional bond between some users and their phone. Despite the phone being an essential, everyday tool, there’s still a sense of excitement and expectation about how services will develop – and how these will change the users’ lives still further. For many, their phone and tablet offer a sense of freedom and renewed control over their life:

  • Consumers describe feeling closer to, and more personally involved with brands which create valued mobile apps and services.
  • Unused and unloved apps don’t routinely get deleted, but persist as a reminder of a failed promise by the brand that created them.
  • Consumers are already showing sophisticated shopping behaviours that weave usage of phones, tablets and desktop PCs into the purchase decision process. This includes the merging of the physical and digital worlds in the shopping journey.
  • There’s a security paradox: consumers have a heightened sense of security and privacy risks, but avoid using services which have complicated or difficult security processes.

Banking on mobile
With retail banking being one of Foolproof’s specialist sectors – we work with some of the world’s leading banking brands – we were keen to drill further into the detail to help our clients understand some of the particular challenges facing them. Mobile devices are redefining how we organise and use our time, and essential tasks like banking are now being made easier as the digital and physical worlds converge in the form of smartphones. It is clear from Going Mobile that the growth of mobile technologies is already changing the way consumers interact with their banks, therefore presenting new challenges to the industry:

– 58.3% of respondents say that mobile devices have given them more control of their money and that they check their finances more regularly.

– One in three respondents say that they look into new financial products and services more since they started using mobile banking.

Personal banking is viewed as a very important part of overall mobile usage. Users are fully engaging with mobile platforms not only to keep up-to-date with balances and transactions (78.8% of respondents), but also to manage and initiate payments from mobile devices (64.4% of respondents).

Mobile is creating valuable opportunities for banking brands to engage with consumers in new ways, at new times, and in new places. However, banks have struggled to fill these new spaces in consumers’ lives and the need for innovation in mobile product and service design has become a strategic issue for protecting and growing market share.

Will banks look back on 2012 as the year when, like their customers, they made the big leap forward on mobile?  Or will it turn out to be the year when they fell behind the rest of the field and consigned themselves to be forever playing catch-up?

By Caroline Ahmed, Head of Practice & Insight at Foolproof, Europe’s biggest specialist experience design agency.





An unprecedented Black Friday: How can retailers prepare?



An unprecedented Black Friday: How can retailers prepare? 1

Retailers must invest heavily in their online presence and fight hard to remain competitive as a second lockdown stirs greater uncertainty

With an unprecedented Black Friday and Cyber Monday weekend on the horizon (27th – 30th November), eCommerce hosting and consultancy expert, Sonassi, advises retailers to strengthen their online presence and make the necessary preparations for a fatigue in consumer spending.

James Allen-Lewis, Development Director at Sonassi, explains: “This year’s golden quarter has squeezed together three of the biggest sales periods like never before, meaning retailers will have to fight harder than usual to remain competitive this Black Friday. With greater discounts over a longer period of time, alongside the fact that a second lockdown has moved everyone and everything online, retailers will be battling it out for a share of decreasing consumer spending.

“However, this sense of uncertainty should not deter merchants from implementing their sales strategies this Black Friday and Cyber Monday weekend. Instead, they must go further than simply providing online discounts and tackle challenges head on by re-focusing their efforts on creating a highly competitive user experience. Successful merchants will make the necessary preparations for a change in consumer demand and invest more heavily in their eCommerce infrastructure.

“One way in which retailers can do this is by using last year’s Black Friday as a case study to inspire their future response. For example, retailers should take note of the key consumer behaviours that transpired throughout last year’s mega peak in discounting and plan accordingly for the upcoming Black Friday and Cyber-Monday weekend.

“Tactics such as providing the ultimate online delivery service and secure payment methods will also be pivotal for retailers looking to survive a fatigue in online spending. Consumers will look to retailers who do not overpromise on items like next-day delivery and ensure their checkout process is safe and frictionless for all. It is the retailers who embrace this fact and meet the needs of the conscious consumer that will win their share of consumers wallets.

Allen-Lewis concludes: “With Black Friday and the build-up to Christmas just around the corner, retailers must adapt to changing consumer demand, invest more heavily in their eCommerce infrastructure and focus their efforts on creating the ultimate online experience. The only way to plan ahead amid challenging times is to listen to the needs of the customer.”

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Optimistic outlook for 2021 public M&A



Optimistic outlook for 2021 public M&A 2

Optimism is returning and the outlook is positive for the Australian M&A market in 2021 after a COVID-induced crash in deal activity in 2020, according to Corrs Chambers Westgarth’s tenth M&A 2021 Outlook report.

The special report reveals that an environment of historically low interest rates positions M&A as a significant means of achieving growth and generating returns, including for private equity firms looking to deploy capital and strategic buyers focused on complementary acquisitions.

With the unprecedented challenge of the COVID-19 pandemic, global political instability and arguably the greatest economic challenge since the Great Depression, M&A 2021 Outlook details somewhat surprising trends emerging for the next 12 months and analyses a number of common COVID-19 myths and their influence on future M&A deal making.

Corrs’ detailed examination of the Australian M&A market draws on data taken from the firm’s proprietary database of transactions combined with in-depth research for the 12-month period ending 30 September 2020.

Key trends identified in the report include a rapid escalation in M&A levels and an increase in creativity in pricing and speed in closing deals, while also highlighting the critical need for support from target shareholders. Conditions also appear to be set for a continued rise in equity prices as a result of the ongoing influx of capital into Australian equity markets, making it imperative that bidders employ strategies to move quickly on M&A transactions.

Discussing the M&A 2021 Outlook, Corrs Head of Corporate, Sandy Mak, said “Despite a challenging year, our research indicates that 2021 could well see the volume and value of deals continue to grow. We are already witnessing this uptick in activity and while some industries and sectors are seeing a faster rebound than others, early indications are that the wider public M&A market will continue to strengthen over the coming months.”

Based on its detailed research, the M&A 2021 Outlook report discusses further key findings including:

  • Deal volume and value is the lowest since 2016, however volumes have shown significant recovery since June 2020.
  • More than 50% of deals in 2020 were ‘hostile’ and not recommended at the outset.
  • 71% of deals over A$500 million were structured by way of a takeover – a significant increase from prior years – largely as a result of increased competition for assets through rival bids.
  • Despite border closures and the tightening of foreign investment regimes, the percentage of deals with foreign bidders has increased materially since April 2020.
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5 steps for SMEs to budget properly for the coming year



5 steps for SMEs to budget properly for the coming year 3

By Fabio Comminot, Head of Dealing, Switzerland at Ebury, one of Europe’s largest Fintechs, has provided a five-step guide to make sure budgeting is done on time.

During the challenging times of COVID-19, it is difficult to forecast orders and costs. This is especially true for SMEs that operate internationally and therefore are exposed to currency fluctuations and market movements. So budgeting is immensely important.

Autumn is budget season for most companies. Upcoming project costs, sales and fixed costs must be defined or forecasted. Budget planning should be as accurate as possible right from the start of the process to avoid unexpected consequences at the end of the year..

With the effects of the COVID pandemic it has become difficult for all companies, no matter their size or history, to plan and make sales forecasts. Early planning and hedging are especially important for companies that work internationally and are therefore particularly exposed to currency risk.

These five steps will help SMEs take the right measures for the coming financial year, in time for budget season:

Step 1: Estimate your costs or sales in foreign currencies 

As difficult as it may seem, every company must estimate its expected fixed and variable costs for the coming year. Most companies can forecast their revenues based on experience or existing orders.

However, start-ups or young companies should also be able to at least estimate their costs including rents, insurance, wages and production costs. Special attention should be paid to costs or revenues that are spent or received in a foreign currency.

Step 2: Profit or cost assurance – define the strategy

As soon as an approximate plan for the coming year is in place, the company should consider the importance of currency management. Regular earnings or expenditures in foreign currencies are exposed to movements in exchange rates. If costs in a foreign currency are to be forecasted until the end of the year, the company needs to minimise volatility. This means that the exchange rate should be fixed so that there are no unexpected negative consequences at the end of the year.

Another option would be to protect the operating profit. Fluctuating exchange rates can rapidly ruin intended profit margins. In this case the company could aim to define the forecasted sales in the foreign currency and fix the margin based on this.

Step 3: Fix your budget rates 

The budget is set, the currency management goals are defined, the major part is done. Now it is a matter of defining the budgeted rates for the various currencies based on the current exchange rate. A buffer of about 5% can be useful when doing this – for example. instead of fixing the exchange rate from US dollar to Swiss franc at the current 91 cent, a rate of 95 cent could be budgeted. In this way, the minimum budget rate is defined and any negative exchange rate movement can be at least partially compensated for.

Step 4: Define the hedging strategy

With the targets and the budget course set, the next questions are: What currency developments can be expected? What is the industry outlook? Is the order situation relatively secure? Or is there practically no empirical data?

This step is where Ebury can support the company. Our experts in FX markets help answer these questions and begin to define the individual hedging strategy.

Step 5: Ensure a flexible fit

It’s done: the measures have been defined, now it’s time for implementation.

Ebury will implement the previous steps and , so that the company focuses on its core business. In contrast to traditional financial services providers such as banks, Ebury constantly monitors international trade and political events in order to assist clients with strategy adjustments. The Ebury team is supported by state-of-the-art technology and international currency analysts. It makes no difference whether the changes are driven by the currency market or whether the company’s order situation itself is changing. This allows the SME to focus on its operational business, which is worth a lot in uncertain times like these.

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