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RETAILERS MUST DEVELOP EMOTIONAL INTELLIGENCE TO WIN OVER NEW GENERATION OF ONLINE SHOPPERS

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RETAILERS MUST DEVELOP EMOTIONAL INTELLIGENCE TO WIN OVER NEW GENERATION OF ONLINE SHOPPERS
  • Millennial generation three times more likely to feel excitement while adding items to their online basket, compared to older shoppers
  • Negative emotions also play a role in decision-making – with millennials more than five times as likely as over 55s to feel guilt at the point of payment

Retailers must develop emotional intelligence (EQ) and alter their customer journey accordingly to nudge shoppers to a better online experience.

New consumer research by Klarna also shows that 16 – 34 year olds are more likely than older generations to be influenced by emotional factors when shopping online.

Klarna emotional ecommerce - millennials

Klarna emotional ecommerce – millennials

The millennial emotional rollercoaster of the millennial customer journey

For the millennial generation – the largest group of online shoppers – the traditional linear customer journey is more akin to a rollercoaster, marked by highs and lows of emotion.

According to Klarna’s consumer research, millennials experience higher levels of anxiety, impulsiveness and impatience than their older counterparts. Klarna’s consumer research shows two thirds (68%) of millennials reported feeling excitement when adding items to their online basket, compared to less than a quarter (24%) of people over 55.

The flip side of this excitement is lows caused by anxiety and guilt, with 52% of millennials saying that they worry that they can’t afford the purchase during checkout, compared to only 16% of over 55s. One in five millennials have abandoned a purchase because of worry about regretting it later.

Increasing merchant EQ

The extremes of emotion experienced by millennials must be navigated carefully so retailers can effectively guide this group through the purchase process.

Allowing shoppers to try before they buy is an easy way to build brand loyalty – findings from Klarna’s consumer research show that 20% of millennials would feel less guilty if they were offered deferred payment options, and one in five would be more likely to complete a purchase if they knew they could spread the cost over time. It’s vital that merchants offer these choices at the checkout – so millennials can be reassured a transaction is achievable.

The buzz of the basket

The consumer research debunks the myth that items added to a basket show a clear intention to purchase. In fact a significant 89% of millennials use the basket as a tool to review costs, while more than three quarters often use their basket as a wishlist, compared with only 29% of over 55s. Meanwhile, nearly three quarters (74%) admit to indulging in ‘buzz browsing’ – adding items to a basket with no clear intention to buy.

Crucially, 58% of millennials are more likely to complete a purchase if an online offer is going to expire, so tapping into this fear of missing out by offering time bound incentives and educating shoppers about pay after delivery or consumer finance options can encourage customers to complete their purchase. Simple website features such as showing stock levels and displaying expert advice from social influencers can all help retailers nudge this important group of consumers to checkout.

Luke Griffiths, UK General Manager, Klarna, said: “Our insight proves that the online customer journey is more complex than ever, with shoppers being driven by emotional factors. Retailers must develop EQ to deliver a positive online customer experience that smooths the highs and lows.

“Payment is still a sticking point for many consumers – with one in four feeling frustrated when the checkout doesn’t remember their details and one in four millennials saying that they are more likely to complete a purchase if one click payments are in place. Competition in the marketplace is fierce, winners will be retailers that build shopper affinity by offering a fast, easy checkout with flexible payment options.”

And new analysis by the University of Reading, commissioned by Klarna, offers advice for retailers on how to engage hearts as well as minds to reach today’s online shopper, while offering academic insight into future commerce trends.

Dr Julia Vogt, Assistant Professor in Psychology at the University of Reading, commented: “Applying behavioural psychology can help us understand what consumers love and hate about online shopping. Emotional factors can cause hesitation in the process which can derail a purchase right up until the final payment. By understanding the role of heart as well as the head, retailers can create effective customer engagement strategies to nudge consumers to conversion.”

Visit www.klarna.com/uk/emotion to find more data and insight, including:

  • Analysis and advisory report for merchants – Emotional eCommerce – from Klarna and Reading University
  • Infographics on the generational and gender differences of online shoppers
  • Infographic on millennial emotions at each stage of the online buying journey
  • Animation summarising millennial shopping behaviour and advice for merchants
Klarna emotional ecommerce - baby boomers

Klarna emotional ecommerce – baby boomers

Business

Exclusive: China’s Huawei, reeling from U.S. sanctions, plans foray into EVs – sources

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Exclusive: China's Huawei, reeling from U.S. sanctions, plans foray into EVs - sources 1

By Julie Zhu and Yilei Sun

HONG KONG/BEIJING (Reuters) – China’s Huawei plans to make electric vehicles under its own brand and could launch some models this year, four sources said, as the world’s largest telecommunications equipment maker, battered by U.S. sanctions, explores a strategic shift.

Huawei Technologies Co Ltd is in talks with state-owned Changan Automobile and other automakers to use their car plants to make its electric vehicles (EVs), according to two of the people familiar with the matter.

Huawei is also in discussions with Beijing-backed BAIC Group’s BluePark New Energy Technology to manufacture its EVs, said one of the two and a separate person with direct knowledge of the matter.

The plan heralds a potentially major shift in direction for Huawei after nearly two-years of U.S. sanctions that have cut its access to key supply chains, forcing it to sell a part of its smartphone business to keep the brand alive.

Huawei was placed on a trade blacklist by the Trump administration over national security concerns. Many industry executives see little chance that blocks on the sale of billions of dollars of U.S. technology and chips to the Chinese company, which has denied wrongdoing, will be reversed by his successor.

A Huawei spokesman denied the company plans to design EVs or produce Huawei branded vehicles.

“Huawei is not a car manufacturer. However through ICT (information and communications technology), we aim to be a digital car-oriented and new-added components provider, enabling car OEMs (original equipment manufacturers) to build better vehicles.”

Huawei has started internally designing the EVs and approaching suppliers at home, with the aim of officially launching the project as early as this year, three of the sources said.

Richard Yu, head of Huawei’s consumer business group who led the company to become one of the world’s largest smartphone makers, will shift his focus to EVs, said one source. The EVs will target a mass-market segment, another source said.

All the sources declined to be named as the discussions are private.

Chongqing-based Changan, which is making cars with Ford Motor Co, declined to comment. BAIC BluePark did not respond to repeated requests for comment.

Shares of Changan’s main listed company Chongqing Changan Automobile rose 8% after Reuters reported the discussions. BluePark’s shares jumped by their maximum 10% daily limit.

GROWING EV MARKET

Chinese technology firms have been stepping up their focus on EVs in the world’s biggest market for such vehicles, as Beijing heavily promotes greener vehicles as a means of reducing chronic air pollution.

Sales of new energy vehicles (NEVs), including pure battery electric vehicles as well as plug-in hybrid and hydrogen fuel cell vehicles, are expected to make up 20% of China’s overall annual auto sales by 2025.

Industry forecasts put China’s NEV sales at 1.8 million units this year, up from about 1.3 million in 2020.

Huawei’s ambitious plans to make its own cars will see it join a raft of Asian tech companies that have made similar announcements in recent months, including Baidu Inc and Foxconn.

“The novel and complicated U.S. restrictions on semiconductors to Huawei have slowly been strangling the company,” said Dan Wang, a technology analyst with research firm Gavekal Dragonomics.

“So it makes sense that the company is pivoting to less chip-intensive industries in order to maintain operations.”

In the United States, Amazon.com Inc and Alphabet Inc are also developing auto-related technology or investing in smart-car startups.

Huawei has been developing a swathe of technologies for EVs for years including in-car software systems, sensors for automobiles and 5G communications hardware.

The company has also formed partnerships with automakers such as Daimler AG, General Motors Co and SAIC Motor to jointly develop smart auto technologies.

It has accelerated hiring of engineers for auto-related technologies since 2018.

Huawei was awarded at least four patents related to EVs this week, including methods for charging between electric vehicles and for checking battery health, according to official Chinese patent records.

Huawei’s push into the EV market is currently separate from a joint smart vehicle company it co-founded along with Changan and EV battery maker CATL in November, two of the sources said.

(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; additional reporting by David Kirton in Shenzhen; Editing by Sumeet Chatterjee and Richard Pullin)

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Facebook switches news back on in Australia, signs content deals

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Facebook switches news back on in Australia, signs content deals 2

By Renju Jose and Jonathan Barrett

SYDNEY (Reuters) – Facebook Inc ended a one-week blackout of Australian news on its popular social media site on Friday and announced preliminary commercial agreements with three small local publishers.

The moves reflected easing tensions between the U.S. company and the Australian government, a day after the country’s parliament passed a law forcing it and Alphabet Inc’s Google to pay local media companies for using content on their platforms.

The new law makes Australia the first nation where a government arbitrator can set the price Facebook and Google pay domestic media to show their content if private negotiations fail. Canada and other countries have shown interest in replicating Australia’s reforms.

“Global tech giants, they are changing the world but we can’t let them run the world,” Australian Prime Minister Scott Morrison said on Friday, adding that Big Tech must be accountable to sovereign governments.

Facebook, whose 8-day ban on Australian media captured global attention, said it had signed partnership agreements with Schwartz Media, Solstice Media and Private Media. The trio own a mix of publications, including weekly newspapers, online magazines and specialist periodicals.

Facebook did not disclose the financial details of the agreements, which will become effective within 60 days if a full deal is signed.

“These agreements will bring a new slate of premium journalism, including some previously paywalled content, to Facebook,” the social media company said in a statement.

The non-binding agreements allay some fears that small Australian publishers would be left out of revenue-sharing deals with Facebook and Google.

“It’s never been more important than it is now to have a plurality of voices in the Australian press,” said Schwartz Media Chief Executive Rebecca Costello.

Facebook on Tuesday struck a similar agreement with Seven West Media, which owns a free-to-air television network and the main metropolitian newspaper in the city of Perth.

The Australian Broadcasting Corp has said it was also in talks with Facebook.

Google Australia managing director Mel Silva said in a statement published on Friday the company had found a “constructive path to support journalism”.

She thanked Australian users of the search engine for “bearing with us while we’ve sent you messages about this issue”.

Facebook and Google threatened for months to pull core services from Australia if the media laws, which some industry players claim are more about propping up ailing local media, took effect.

While Google struck deals with several publishers including News Corp as the legislation made its way through parliament, Facebook took the more drastic step of blocking all news content in Australia.

That stance led to amendments to the laws, including giving the government the power to exempt Facebook or Google from mandatory arbitration, and Facebook on Friday began restoring the Australian news sites.

(Reporting by Renju Jose and Jonathan Barrett; Editing by Richard Pullin and Jane Wardell)

 

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China’s factory activity growth likely moderated during February holiday lull – Reuters poll

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China's factory activity growth likely moderated during February holiday lull - Reuters poll 3

BEIJING (Reuters) – China’s factory activity likely grew at a slightly slower rate in February as factories closed for the Lunar New Year holiday, a Reuters poll showed, although growth is expected to remain firm, buoyed by an early resumption of production.

The official manufacturing Purchasing Manager’s Index (PMI) is expected to dip marginally to 51.1 in February from 51.3 in January, according to the median forecast of 20 economists polled by Reuters. A reading above 50 indicates an expansion in activity on a monthly basis.

Chinese factories typically scale back operations or close for lengthy periods around the Lunar New Year holiday, which fell in the middle of February this year.

However, the resurgence of COVID-19 cases in the winter had prompted local governments and companies to dissuade workers from travelling back to their hometowns, giving a boost to the earlier-than-usual resumption of production at many factories, analysts say.

“Although government COVID-19 prevention measures may constrain some manufacturing activities in the near-term, the fact that a majority of migrant workers stayed in their workplace cities for the holiday should facilitate an earlier resumption of business activity following the holiday this year,” said analysts at Nomura in a note to client on Thursday.

Wang Zhishen, a migrant worker from Gansu, told Reuters that his factory, a manufacturer of logistics boxes in the manufacturing hub of Dongguan, only closed for three days during the holiday, thanks to overwhelming businesses. Lured by the 1,500-yuan cash subsidy his factory offered, he chose to work through the holiday.

The Chinese economy has largely shaken off the gloom from the COVID-19 health crisis, with consumers opening up their wallets after months of hesitation. Growth is now set to rebound sharply this quarter, also helped by the low base effect of a year ago.

The country has successfully curbed the domestic transmission of the COVID-19 virus in northern China, with the national health authority reporting zero new local cases for the 11th straight day. Cities that were on lockdown have since vowed to push for a work resumption at full speed.

The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will both be released on Sunday.

The private Caixin manufacturing PMI will be published on Monday. Analysts expect the headline reading will dip slightly to 51.4 from 51.5 in January.

(Reporting by Stella Qiu and Ryan Woo; Editing by Sam Holmes)

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