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RETAILERS NEED TO REACT FAST TO CONSUMER TRENDS OR SUFFER THE CONSEQUENCES

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Zahid Jiwa, VP UK& Ireland, OutSystems

Written by Zahid Jiwa, VP UK& Ireland, OutSystems

With the economy in recession since 2008, many businesses have lowered their expectations on profit and have gone into survival mode, often at the expense of progress and innovation.

In retail this has been particularly acute. The scale of Woolworths’ 800-store collapse in 2009 and the speed of its demise sent shockwaves throughout the industry.  Retail casualties culminated in 2012 when 54 retailers went into administration including household brands like Blockbuster, HMV, Jessops and Comet.

Zahid Jiwa, VP UK& Ireland, OutSystems

Zahid Jiwa, VP UK& Ireland, OutSystems

By the middle of 2013 however we saw retail sector prospects start to improve.  As the economy starts to recover businesses will need to take a hard look at how they can take measures to benefit from the long-awaited upturn and what this means to their business.  Many retailers failed to innovate during the recession and this directly contributed to their demise.

I believe that retailers in particular need to intensify their focus on the customer.  They need to better understand customer expectations in order to anticipate how they should evolve their businesses. Blockbuster, Comet and Woolworths were guilty of becoming complacent thinking that customers would be prepared to continue to shop in their stores.  These retailers clearly lost touch. They stopped listening to their customers and they stopped innovating – to their ultimate detriment.

Woolworths totally underestimated its customer’s appetite to shop online and use smart devices.  Woolworths and other supermarkets like Morrisons who focused on working class households, totally misread their ambition to get online. They didn’t consider that through the Internet and smart devices lower income customers had the same buying power and access to products as middle income consumers. So by not offering internet services these shoppers took their business elsewhere via the Internet. And, as other retailers were slowly eating Woolworth’s lunch with new convenience store formats and internet offers, Woolies continued to focus on its traditional strengths while outwardly admitting that it had to make itself more distinctive in shoppers’ eyes.

If I look at Blockbusters, Comet, Dixons and PC World, it is a similar story.  All failed to act on changing consumer behaviour. Blockbuster for example didn’t understand that customers were moving away for good from movie rental stores and instead logging in online and downloading films from Netflix from the comfort of their own home. In fact, Blockbusters had the opportunity to buy Netflix but it walked away and ironically today Netflix is worth $21.5 billion and Blockbusters is bankrupt.

Today retailing is a multi-channel experience underpinned by innovation and technology. Buying research is done before the shopper even enters the store.  Smart devices mean that in just three clicks we can purchase goods and we can do this very efficiently.  If we buy online, it is delivered next day. We don’t have to wait.

Looking at successful retailers you can see that these organisations have truly embraced innovative technology to ensure that they can deliver the services their customers demand.   A great example is Amazon, who I regularly shop with.  Amazon is extremely price competitive, it delivers my goods to me at multiple addresses depending on where I intend to be.  I can click and collect from drop off centres or lockers and the tracking and delivery information is superb.  Other great examples include Waitrose and John Lewis with their click and collect service. Integrated back-end logistics and distribution with front-end ecommerce technology allows me to collect from my local Waitrose store.   Likewise eBay has recently tied up with Argos, using their stores for collection.

At OutSystems we have a strong history of helping retailers to innovate in a variety of ways across the business.  With our web and mobile application platform we have helped retailers create a highly flexible and adaptive environment and, where necessary, retire legacy systems. For example, OutSystems helped a European retailer bring 15 new built-for-change applications to market over the last few years, whereby the key imperative was for each of these applications to not only adapt, flex and change but to integrate with its ERP systems.

My closing thought is, are retailers adapting fast enough?  At the start of this year like-for-like sales at Morrisons fell 5.6% in the six weeks to 5 January, sending shares tumbling.  Morrisons admitted it had seen a “disappointing” performance stating that the difficult market conditions were intensified by the accelerating importance of the online and convenience channels, where it is currently under-represented.  So what that tells me is that one of the 4th largest retailers in one of the largest economies in the western world has only just realised that it needs an ecommerce strategy.

As we move forward into a brave new world and start to gear our businesses for growth, do our customers have the time to wait when some retailers are only now starting down an ecommerce route?  Can retailers continue to drag their heels when it comes to responding to customer trends?  The answer is no. We must be fleet of foot, agile and responsive. We must anticipate how customer buying patterns will evolve, and most importantly, we must act.

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion

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ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion 1

(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision for more than $1 billion.

Exxon has been looking to sell its oil and gas assets since late 2019, seeking to free up cash to focus on a handful of mega-projects.

The deal includes ownership interests in 14 producing fields operated primarily by Shell as well as interests in the associated infrastructure. Exxon could also receive about $300 million in contingent payments based on a potential for increase in commodity prices.

Exxon’s share of production from these fields was about 38,000 barrels of oil equivalent per day in 2019, the company said.

Exxon said it would retain its non-operated share in upstream assets in the southern part of the North Sea as well as its interest in the Shell Esso gas and liquids (SEGAL) infrastructure, which supplies ethane to the company’s Fife ethylene plant.

HitecVision, in partnership with Eni, had bought Exxon’s Norwegian North Sea assets for $4.5 billion in 2019.

Initially, Exxon hoped to raise more than $2 billion from the sale, which was planned for late 2019. In June 2020 sources told Reuters that the portfolio was more likely to fetch $1 to $1.5 billion given the oil price weakness last year.

(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)

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JPMorgan’s blockchain payments test is literally out of this world

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JPMorgan's blockchain payments test is literally out of this world 2

By Anna Irrera

LONDON (Reuters) – Stuck in space with bills to pay? Don’t worry, the satellites could take care of it.

JPMorgan Chase & Co has recently tested blockchain payments between satellites orbiting the earth, executives at the bank told Reuters, showing that digital devices could use the technology behind virtual currencies for transactions.

The so-called Internet of Things (IoT), where devices connect to one another, is most associated with consumer electronics, including smart speakers like Amazon Echo and Google Home, and banks want to be ready to process payments when these smart devices start doing transactions autonomously.Umar Farooq, the CEO of JPMorgan’s blockchain business Onyx, thought space was a cool place to try it out.

“The idea was to explore IoT payments in a fully decentralised way,” Farooq said. “Nowhere is more decentralised and detached from earth than space.”

“Secondly we are nerdy and it was a much more fun way to test IoT,” he said.

To run the space experiment, the bank’s blockchain team did not send its own satellites into space, but worked with Danish company GOMspace, which allows third parties to run software on its satellites.

Farooq said the satellite test showed blockchain networks could power transactions between every day objects.

The test also showed it could be possible to create a marketplace where satellites send each other data in exchange for payments, as more private companies launch their own devices into space, Tyrone Lobban, head of blockchain launch, at Onyx said.

Back on earth, examples of IoT payments that could become a reality sooner include a smart fridge ordering and paying for milk on an ecommerce site, or a self-driving car paying for gas Farooq said.

Blockchain, which first emerged as the software underpinning cryptocurrencies, is a shared digital ledger of transactions. Financial companies have invested millions of dollars to find uses for the technology hoping it can reduce costs and simplify more complex IT processes, such as securities settlement or international payments.

But so far, blockchain has yet to have widespread impact in financial services.

JPMorgan has been one of the most active banks in blockchain, announcing it had created its own distributed ledger called Quorum in 2016, which was sold to blockchain company Consensys last year. The bank also developed a digital coin called JPM Coin and in 2020 created Onyx.

Onyx has more than 100 employees and its blockchain applications are close to generating revenues for the bank, it said.

Among the division’s applications is Liink, a payments information network involving more than 400 banks, a project to replace paper checks and IoT experiments, Farooq said.

(Reporting by Anna Irrera. Editing by Jane Merriman)

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Garment workers in Thailand receive full compensation after wages expose

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Garment workers in Thailand receive full compensation after wages expose 3

By Nanchanok Wongsamuth

BANGKOK (Thomson Reuters Foundation) – Garment workers in Thailand who were illegally underpaid while making products for major brands have received all the wages owed to them after theme park operator and film producer Universal Studios agreed to pay the outstanding amount.

Universal Studios, owned by media giant Comcast Corp’s NBCUniversal, agreed to give $20,000 to a group of Myanmar workers on Wednesday – following three other global brands in making payments to settle the 3.5 million baht ($116,550) owed in unpaid wages.

“We take this matter very seriously and this is not in line with our core values,” a NBCUniversal spokeswoman said.

A Thomson Reuters Foundation investigation in September 2019 found dozens of migrants from Myanmar working at several factories in the western region of Mae Sot were paid less than the daily minimum wage of 310 Thai baht ($10.32).

A group of 26 workers at one of the factories raided in 2019 by officials sued the owner – Kanlayanee Ruengrit – in August last year for failing to pay the 3.5 million baht owed to them.

Interviews with workers by local and global rights groups found that her factory was making goods for several major brands from Universal Studios to Britain’s largest supermarket Tesco.

The workers later received a payment of about 2.88 million baht from Kanlayanee and three brands that said Kanlayanee’s factory had been subcontracted by their suppliers or partners without permission – Disney, Starbucks and Tesco.

The money from Universal Studios will be paid to MAP Foundation, which has supported the workers and been in discussion with the companies, and will distribute the funds directly to the workers.

“Since the former licensee has failed to respond to multiple requests to pay the affected Thai factory workers, we are making a goodwill donation to MAP Foundation … to distribute funds directly to the workers,” the NBCUniversal spokeswoman said.

Suchart Trakoonhutip, a coordinator at MAP Foundation, said the payment marked the first time that underpaid workers in Mae Sot had received the full amount owed to them in a wage dispute.

The Mae Sot case sets an example for other brands to follow in terms of taking responsibility, but workers should not have to rely on the goodwill of companies in order to receive money they have earned, said Ilona Kelly, a coordinator at pressure group Clean Clothes Campaign.

“The industry urgently needs binding agreements to hold brands to account, the lack of which has become even more notable during COVID-19 as millions of workers are now owed wages and severance pay,” she added.

“Without (government) legislation, the happy ending of the Kanlayanee story will continue to be as unobtainable as a fairytale ending for most workers.”

One of the Kanlayanee workers, who now works part-time on a farm, told the Thomson Reuters Foundation that he plans to send the additional money to his sick father in Myanmar.

“I feel happy and proud that I will soon receive the full amount of money I am owed,” said the worker, who spoke on condition of anonymity due to the sensitivity of the matter.

($1 = 30.0300 baht)

(Reporting by Nanchanok Wongsamuth @nanchanokw; Editing by Michael Taylor. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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