Consumers want to buy from websites, but the truth of the matter is that websites are not good at selling. Online basket abandonment rates in web retail are now at a whopping 88%, according to the latest analyst reports. However, don’t be fooled into thinking thatthis is a problem for the FMCG retailer alone; web form abandonment rates are upwards of 75% in the banking, financial services and insurance (BFSI) industries as well…
The fact is, that most web sites don’t make it easy for customers to buy. In fact,cart and web form abandonment percentages are just the tip of the iceberg when you look at the larger phenomenon of “shopping abandonment” in retail parlance – one could call it ‘purchase abandonment’ across industries.
When consumers go to websites to buy something, they go through three distinct steps in their purchase process – find, decide and buy. While the basket and web form abandonment happens in the final, “buy” stage of a transaction, consumers often quit their purchases way before they even get to that final stage. In order to take online sales conversion to whole new levels, BFSI websites need to therefore address the larger phenomenon of purchase abandonment through proactive contextual engagement at each step of the purchase process – find, decide and buy. Here’s how they can do it:
Stage 1 – Find: Make it easy to find appropriate products and services
Finding things in any retail store can be a challenge, and in this day and age, in-store customer service help can be poor at best. While shopping abandonment rates in a bricks-and-mortar establishment might be lower due to the shopper’s “escalation of commitment” – after all, the shopper likely spent a sizeable amount of time (and petrol!) driving to the local branch – there’s no such commitment to the BFSIweb site. With no such constraints,potential customers get lost in a hurry and simply bolt with the click of a mouse or the swipe of a tablet.
We’ve all been there, not knowing where to search or what to type in for the best result. Keyword searches are rarely able to decipher the real intent of the customer. This results in hundreds of irrelevant hits (called “search overload”) or in a dead-end (i.e., the dreaded “no results found”) and consumers heading elsewhere. Shoppers expect a website to do more than just dump irrelevant information on them today, they want purchase guidance – a GPS and not a raw map.
Stage 2 – Decide:Facilitate the decision to buy
Once the consumer finds some options, they’d like to decidewhat they want to buy. In order to make that decision, they need product information including features, benefits and independent reviews, as well as how they compare to alternatives – all in one place, your website. Many ecommerce sites simply don’t offer this and consumers have to go elsewhere to find such information, abandoning the purchase in the process.
Moreover, web sites often compound the problem by making irrelevantoffers that don’t help move the purchase decision forward. One example is dumb proactive chat, often called “attack chat,” where visitors get ambushed the minute they reach a website.Stalking customers with unintelligent chat offers does not help the customer in their decision-making. In fact, it causes consumers to leave the website in a hurry.
Another example is presenting irrelevant voucher offers during the decision process. Most offers tend to be generic sales promotions that miss the real opportunity to make targeted, contextual offers to help the consumer make the decision to buy a particular product you are attempting to sell.
Stage 3 – Buy:Make it easy to complete the purchase
When the customer is ready to buy, they start the checkout process. Shoppers often quit at this stage– the checkout process being convoluted, in-your-face surveys, etc.
In the BFSI sector, customers often need to fill out onerous online forms to “buy”. These forms are oftencomplex, and there’s no real-time, in-purchase help. The customer simply gives up filling the forms and goes elsewhere – and after all that hard worktoo!
New ways to accelerate BFSI ecommerce sales
How can BFSI companies address purchase abandonment and boost ecommerce sales? The answer lies in bringing to bear the right technologies at the right time in the find-decide-buy process.
Take the find stage; it is now possible for a website search to understand the true intent of the consumer. Intent-driven search technology and guided help based on AI (Artificial Intelligence) technologies like Case-Based Reasoning (CBR) can do this. This can help reduce frustrating keyword search dead-ends and unrelated information dump;helping customers to what they need through a natural language dialogue or step-by-step guided help – just like a competent sales person in a branch office would.
Also, wouldn’t it be great if the web site had a virtual concierge that helped customers find things? Well, they exist!These chatbots never take time off; they work 24×7 and are even multilingual! Moreover, they are designed to align with the brand, thereby reinforcing the brand through customer’s digital experiences.
Many of our clients now use virtual agent technology, which allows consumers to converse in natural language with a life-like, online “avatar” to help their customers learn about new products and get answers to questions about their account, including balances, bill payment, claims, policy questions, etc.
One premier international bank uses eGain-powered chatbots to provide distinctive web self-service to business clients, deflecting 30% of would-be phone calls to the website. A unified approach is key here – when the chatbot is unable to resolve an issueit escalates the interaction seamlessly to a human agent, preserving the context and content of the interaction.
Finally, when it comes to the decide and buy stages, many of our clients aggregate search results from independent product review and online forums – all in one place – making it easy for the customer to make an informed decision, without ever having to leave the web site. Furthermore, instead of those attack chats, these sites make intelligent and relevant offers, such as real-time chat or cobrowse that are honed to the stage of the process that the customer is currently in.
To this end, premier BFSI companies in the US are using eGain for chat and web collaboration, helping customers fill out forms online, get questions answered, and complete transactions.
One such example comes from a leading US insurance client that has their sales agents cobrowse with customers, while talking to them on the phone at the same time. The agents show consumers around on the web site when they are in the “find” or “decide” phase, and collaboratively fill online forms, etc. when they are in the buy phase or during the member onboarding process after the purchase. The insurer has been able to increase its online conversion rate from 25% to 75% with this collaborative approach. This is like having your friendly neighbourhood agent hand-holding the customer through the enrollment process but without the cost of a brick-and-mortar retail branch.
It’s clear that proactive, contextual, technology-enabled online engagement– automated or human-assisted – can help businesses dramatically improve sales conversion. As consumerscontinue to embrace the digital age, this approach might very well separate the winners from the losers in the BFSI sector.
Anand Subramaniam is Vice President of Worldwide Marketing for eGain,www.egain.com, a provider of multichannel sales and service software.
Barclays announces new trade finance platform for corporate clients
Barclays Corporate Banking has today announced that it is working with CGI to implement the CGI Trade360 platform. This new platform will provide an industry leading end-to-end global trade finance solution for Barclays clients in the UK and around the world.
With the CGI Trade360 platform, Barclays will provide clients with greater connectivity and visibility into their supply chains, allowing them to optimise working capital efficiency, funding and risk mitigation. By utilising cloud based functionality for corporate banking clients, Barclays will also be able to offer a leading client user experience through easy access and real-time integration to essential information, combined with the latest trade solutions as the industry-wide shift to digitisation continues to accelerate.
This move underpins Barclays commitment to supporting the trade and working capital needs of their clients and reinforces a commitment to innovation that has been central to the bank for more than 300 years.
James Binns, Global Head of Trade & Working Capital at Barclays, said: “We are delighted to announce our move to the CGI Trade360 platform and to have started the implementation process. We have a longstanding partnership with CGI, and the CGI Trade360 platform will mean we can continue delivering the best possible trade solutions and service to our clients for many years to come.”
Neil Sadler, Senior Vice President, UK Financial Services, at CGI, said: “Having worked closely with Barclays for the last 30 years, we knew we were in an excellent position to enhance their systems. Not only do we have a history with them and understand how they work, but part of the CGI Trade360 solution includes a proof of concept phase, which is essentially seven weeks of meetings and workshops with employees across the globe to guarantee the product’s efficiency and answer all queries. We’re delighted that Barclays chose to continue working with us and look forward to supporting them over the coming years.”
What’s the current deal with commodities trading?
By Sylvain Thieullent, CEO of Horizon Software
The London Metal Exchange (LME) trading ring has been the noisy home of metals traders buying and selling for over a hundred years. It’s the world’s oldest and largest metals market and is home to the last open outcry trading floor. Recently however, the age-old trading ring, though has been closed during the pandemic and, just a few weeks ago, the LME announced that it will remain so for another six months and that it is taking steps to improve its electronic trading. This news fits in with a growing narrative in commodities about a shift to electronic trading that has been bubbling away under the surface.
Something certainly is stirring in commodities. The crisis has affected different raw materials differently: a weakening dollar and rising inflation risks bode well for some commodities with precious metals being very attractive, as seen by gold reaching all-time highs. Oil on the other hand has had a tough year and experienced record lows from the Saudi-Russia pricing war. It has been a turbulent year, and now prices look set to soar. While a recent analyst report from Goldman Sachs predicts a bullish market in commodities for the year ahead, with the firm forecasting that it’s commodities index will surge 28%, led by energy (43%) and precious metals (18%).
Increasingly, therefore, it seems that 2020 is turning out to be a watershed moment for commodities, and it’s likely that the years ahead will bring about significant transformation. And whilst this evolution might have been forced in part by coronavirus, these changes have been building up for some time. Commodities are one of the last assets to embrace electronic trading; FX was the first to take the plunge in the 90s, and since then equities and bonds have integrated technology into their infrastructure, which has steadily become more advanced.
The slow uptake in commodities can be explained by several truths: the volumes are smaller and there is less liquidity, and the instruments are generally less exotic, essentially meaning it has not been essential for them to develop such technology – at least not until now. This means that, for the most part, the technology in commodities trading is a bit outdated. But that is changing. Commodities trading is on the cusp of taking steps towards the levels of sophistication in trading as we see in other asset classes, with automated and algo trading becoming ever prominent.
Yet, as commodities trading institutions are upgrading their systems, they will be beginning to discover the extent of the job at hand. It’s no easy task to upgrade how an entire trading community operates so there’s lots to be done across these massive organisations. It requires a massive technology overhaul, and exchanges and trading firms alike must be cautious in the way they proceed, carefully establishing a holistic, step-by-step implementation strategy, preferably with an agile, V-model approach.
The workflow needs to be upgraded at every stage to ensure a smooth end-to-end trading experience. So, in replacement of the infamous ring, these players will be looking to transform key elements of their trading infrastructure, including re-engineering of matching engines and improving communications with clearing houses.
However, these changes extend beyond technology. For commodities players to make a success of the transformation in their community, exchanges need to have highly skilled technology and change the very culture of trading. All of which is currently being done against a backdrop of lockdown, which makes things much more difficult and can slow down implementation.
What is clear is that coronavirus has definitely acted as a catalyst for a reformation in commodities. It is a foreshadowing of what lies ahead for commodities trading infrastructure because, a few years down the line, commodities trading could well be very different to how it is now, and the trading ring consigned to history.
Afreximbank’s African Commodity Index declines moderately in Q3-2020
African Export-Import Bank (Afreximbank) has released the Afreximbank African Commodity Index (AACI) for Q3-2020. The AACI is a trade-weighted index designed to track the price performance of 13 different commodities of interest to Africa and the Bank on a quarterly basis. In its Q3-2020 reading, the composite index fell marginally by 1% quarter-on-quarter (q/q), mainly on account of a pull-back in the energy sub-index. In comparison, the agricultural commodities sub-index rose to become the top performer in the quarter, outstripping gains in base and precious metals.
The recurrence of adverse commodity terms of trade shocks has been the bane of African economies, and in tracking the movements in commodity prices the AACI highlights areas requiring pre-emptive measures by the Bank, its key stakeholders and policymakers in its member countries, as well as global institutions interested in the African market, to effectively mitigate risks associated with commodity price volatility.
An overview of the AACI for Q3-2020 indicates that on a quarterly basis
- The energy sub-index fell by 8% due largely to a sharp drop in oil prices as Chinese demand waned and Saudi Arabia cut its pricing;
- The agricultural commodities sub-index rose 13% due in part to suboptimal weather conditions in major producing countries. But within that index
- Sugar prices gained on expectations of firm import demand from China and fears that Thailand’s crop could shrink in 2021 following a drought;
- Cocoa futures enjoyed a pre-election premium in Ghana and Côte d’Ivoire, despite the looming risk of bumper harvests in the 2020/21 season and the decline in the price of cocoa butter;
- Cotton rose to its highest level since February 2020 due to the threat of storm Sally on the US cotton harvest, coupled with poor field conditions in the US;
- Coffee rose 10% as La Nina weather conditions in Vietnam, the world’s largest producer of Robusta coffee, raised the possibility of a shortage in exports.
- Base metals sub-index rose 9% due to several factors including ongoing supply concerns for copper in Chile and Peru and strong demand in China, especially as the State Grid boosted spending to improve the power network;
- Precious metals sub-index, the best performer year-to-date, rose 7% in the quarter as the demand for haven bullion continued in the face of persistent economic challenges triggered by COVID-19 and heightening geopolitical tensions. In addition, Gold enjoyed record inflows into gold-backed exchange traded funds (ETFs) which offset major weaknesses in jewellery demand.
Regarding the outlook for commodity prices, the AACI highlights the generally conservative market sentiment with consensus forecasts predicting prices to stay within a tight range in the near term with the exception of Crude oil, Coffee, Crude Palm Oil, Cobalt and Sugar.
Dr Hippolyte Fofack, Chief Economist at Afreximbank, said:
“Commodity prices in Q3-2020 have largely been impacted by COVID-19. The pandemic has exposed global demand shifts that have seen the oil industry incur backlogs and agricultural commodity prices dwindle in the first half of the year. The outlook for 2021 is positive however conservative the markets still are. We hope to see an increase in global demand within Q1 and Q2 – 2021 buoyed by the relaxation of most COVID-19 disruptions and restrictions.’’
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