BERLIN (Reuters) – German business morale rose by far more than expected in February, hitting its highest level since October as the industrial sector powered along Europe’s largest economy despite lockdown restrictions, a survey showed on Monday.
The Ifo institute said its business climate index increased to 92.4 from an upwardly revised 90.3 in January. A Reuters poll of analysts had pointed to a February reading of 90.5. The reading surpassed even in the highest forecast in the poll.
“The German economy is robust despite the lockdown mainly because of the strong industrial economy,” Ifo President Clemens Fuest said in a statement.
The stronger-than-expected Ifo reading showed businesses are looking beyond the short-term effect of lockdown measures.
Once a role model for fighting the COVID-19 pandemic, Germany has struggled with a second wave. Chancellor Angela Merkel and state premiers have agreed to extend restrictions to curb the spread of the coronavirus until March 7.
The government last month slashed its GDP growth forecast to 3% this year, a sharp revision from last autumn’s estimate of 4.4%. This means the economy probably won’t reach its pre-pandemic level before mid-2022.
But Ifo economist Klaus Wohlrabe told Reuters companies have revised up production plans significantly and export expectations for industry have also risen.
“The order books are well filled,” he added.
Other sentiment indicators have also been promising.
The ZEW economic research institute said last Tuesday investor morale in Germany rose beyond even the most optimistic forecast in February on expectations consumption will take off in the coming months.
Earlier this month, industrial conglomerate Thyssenkrupp raised its full-year outlook for the first time in nearly four years, and CEO Martina Merz said “we’re noticing signs of an economic recovery”.
Last Thursday, German carmaker Daimler AG said it expects significant improvements in sales and operating profit in 2021.
(Writing by Paul Carrel; Editing by Maria Sheahan)
Vodafone’s Czech subsidiary held talks on cooperating with utility CEZ
PRAGUE (Reuters) – Vodafone’s Czech subsidiary said on Monday it had held talks with state-controlled energy utility CEZ regarding strategic cooperation, but not on selling the unit as reported by a Czech newspaper.
Financial daily Hospodarske Noviny reported on Monday that CEZ, central Europe’s largest listed energy group, was interested in buying Vodafone’s Czech business. Talks over a price for the market’s number three operator have been ongoing since the summer months last year, the paper said.
“We confirmed to Hospodarske Noviny that there have been talks with CEZ on different options of strategic cooperation. We did not confirm, however, that it is about selling the whole Vodafone (in the country),” Vodafone’s local spokesman Ondrej Lustinec said.
CEZ declined to comment on the report, and Vodafone did not give further details on the nature of the cooperation being discussed.
CEZ, which is 70% owned by the state, already has a smaller mobile operatation with 130,000 clients, leasing network capacity from O2 Czech Republic.
Hospodarske Noviny said Vodafone’s local operations could be valued in the low tens of billions of crowns in the event of a sale.
Vodafone Czech Republic has around 4 million customers and reported a net profit of 1.46 billion crowns ($68.08 million) in its fiscal year to March 2020.
($1 = 21.4460 Czech crowns)
(Reporting by Robert Muller and Jason Hovet, editing by Louise Heavens, Kirsten Donovan)
Think Local: The Marketing Trend of The Pandemic
By Sarah Bryers, Head of Experiential, TMW UNLIMITED’s
The term ‘localism’ may not have been used as widely as ‘social distancing,’ ‘new normal’ or ‘you’re on mute’ but, for marketers at least, it may be among the most enduring changes that we have seen since Covid. In the immediate term, the move towards localism, particularly in retail, is undeniable. 64% of the UK population have said they are now more inclined to shop locally, according to research data from our insight partners, Walnut Unlimited. This is reflected in the sales data too, with independent local retailers seeing a 69% increase in sales in 2020.
Two primary reasons for this trend, the first of which will be self-evident to most of us. The restrictions on travel have meant that people are leaving their homes less and, when they do, they are less likely to travel far. The other factor though, points to a potentially deeper change in the population, and this is where brands need to be most attuned.
As a result, the impact of the pandemic – and all of the challenges that it has entailed – has enhanced the sense of community among consumers, and this is manifesting in the way people shop, meaning now more than ever, being able to centre brand strategy on understanding human is crucial to delivering marketing strategies that cut through the noise.
Localise your message
The importance of activating national campaigns locally has long been an underestimated element of the marketing mix. According to internal research across our client-base at TMW Unlimited, we discovered that 66% of purchases are affected by some form of local activity. Effective local marketing which takes national campaigns and finds ways to tailor messaging to a smaller audience has always given brands the opportunity to increase their cut through, response rates and inspire more brand affinit
Engage your retail network
Understanding the local market is a skill that only the local network can deliver authentically. Providing the tools to deliver national messaging to a local audience is important to harness local communities, as well as mobilising and upskilling the network into action. For franchises who are used to managing their own marketing, it is up to brands to drive the focus and allow them to speak to the community. For brand-owned stores with more centralised marketing, this could require a more significant adjustment, a movement towards system where messaging is more devolved.
Manage your message, be true to your brand
Given the PR disasters some brands have faced from local markets going off messaging, companies will no doubt be reluctant. it’s crucial to offer guidelines when adapting communications to a particular location’s audience to ensure that it does not dilute the importance of maintaining an established brand identity. Everything still needs to embody the tone and purpose that consumers would see in national marketing. Allowing local elements of the brand some autonomy but within the parameters. With proper training and education to let local operators know the importance of maintaining one brand, as well as having vigilant systems in place to check and assure compliance, companies will be able to have the best of both worlds: authentic, tailored messaging under one cohesive brand.
According to Paul Wolstenholme, Regional Marketing Manager for Lexus, they have seen success in this area by putting marketing training at the forefront of their strategy: “We routinely check outputs across all channels to ensure guidelines are met, with measures in place to prompt swift correction if standards are not met, but fundamentally it starts with working with retail centres so that they understand why consistent branding and messaging delivers greater returns – both for the brand in general and for sales at a localised level.” This has paid off in the relationship between the brand and its retailers, with Lexus having the most satisfied dealers out of all manufacturers in the UK.
When it comes to talking about how a brand fits into the local community, little steps can go a long way. Brands that take steps to genuinely help their community with local initiatives are likely to prosper in the long run. Even more so if their consumers get a say in how. Waitrose’s Community Matters scheme, in which they give a chance to vote on which local community projects receive support is a great example of a brand entrenching itself and its customers in the local community. A warning though: companies should be wary of slipping into cliché. With more purpose-conscious consumers comes better detectors for tones that ring hollow which won’t get a lot of cut-through.
Know your customers, hyperlocally
To make informed choices about bespoke marketing on a local level, it is crucial that a brand truly understands its audience in each location. Using insight tools that employ the right combination of sales data, demographic insight and any other information marketers can get their hands on means it is now possible to accurately discern exactly who it is they are communicating with and where they are. The key then is to aggregate and unpack the information available to come up with actionable insights that are easy to understand and implement at a local level. Done well, this can be a powerful tool in a brand’s armoury to take them beyond a more generic approach.
Matt Clark, Senior Dealer Coach for Ford, told us that they that the brand was bearing the fruits of investing in local insight tools: “Zone mangers and retailers are now able to see where opportunities are within their territory, whilst comparing local sales performance to a national index. Using both household and industry profiling has enabled us to create audience types and develop impactful messaging, leading to higher conversion rates across the network.”
Create local experiences
If the pandemic has shown anything it’s that brick-and-mortar retailers, will need to function differently. In-store purchasing is becoming an increasingly secondary function to browsing and click-and-collect, and brands need to create experiences for customers to set themselves apart. This could provide a fantastic opportunity to leverage the brands understanding of local audiences. They’ll need to deliver events to attract people to their store and curate an experience that delivers a more personal relationship between a brand, its consumers and the community it sits within.
Ultimately, each brand and each location will need to interact with its local community in its own distinct way. Assuming that one size fits all has never been an efficient approaching to marketing but brands who don’t have a strategy in place will now feel the consequences more than ever. The world has changed in many ways and what people now expect from the companies they buy from is different as well. As ever, those who move first to innovate and deliver for their customers are likely to fullest effects, whilst those who are slow to adapt will face an uphill battle to catch up. Above the line messaging is as important as ever, but it is vital that it integrates with a local strategy too.
Three Predictions for the City of London in 2021
By Bob Santella, Chief Executive Officer, IPC
If CIOs in the City of London were asked at the beginning of 2020 about their biggest concerns for the coming year, they likely would have answered: regulation, followed closely by operational efficiency improvements and the challenges of adopting new technologies. These issues undoubtedly remain important for 2021, but the post-pandemic city now has very different priorities. These three in particular stand out:
Remote working is here to stay
While most firms adapted quickly to the new working environment, ad hoc solutions must be transitioned to permanent arrangements. Given the challenges involved in reorganising office space, plus the sheer logistical constraints associated with scheduling facility access, there will be many employees who will simply have to stay in their current remote working environments for an extended period of time.
In order to foster collaborative working environments that maintain required standards of security over the long term, firms will need to invest in more collaboration tools. Currently, virtual conferencing software allows for limited forms of collaboration, such as screen sharing. The City of London will need more, and better, ways of creating shared online workspaces for employees – for instance, virtual whiteboards. Development and cultivation of client relationships will also require new and innovative ways of hosting fully participatory events online, above and beyond the passive consumption of online webinars and content.
The City will fully embrace the cloud
Speaking of collaborative technologies, cloud adoption and the use of “software as a service” can facilitate better scalability and resilience, not only from a technology perspective, but also in terms of the ability to quickly connect to new markets for price discovery and execution.
The ability to leverage cloud technology, and a cloud-based community of market participants, is a key differentiator for any firm. With cloud deployments of in-house systems, firms can rapidly scale up resources to support high volumes and throughput without impacting their latencies and can then scale down these resources when they are no longer needed. This effectively creates unlimited headroom for any trading system, at a variable cost — a concept previously unimaginable. Cloud-based providers of services such as market data and exchange connectivity have been able to offer their clients rapid access to new markets, with no new technology deployment required beyond configuration. This is essential at a time when technology teams are working remotely and under constrained circumstances, and deployment windows are minimal and high-risk.
Lastly, participants in cloud-based networked communities can easily connect directly to each other. Given the demonstrable benefits experienced during the crisis by those already on the cloud, it’s clear that acceleration of cloud adoption will be high on the technology spending agenda for many firms.
Technologies such as artificial intelligence and machine learning (AI/ML), as well as Distributed Ledger Technology (DLT), will also play a more significant part in our financial market’s infrastructure going forward.
AI and ML platforms are informing better decision-making in often volatile, fast-moving markets by analysing huge amounts of data and information in a matter of seconds. The ability to augment the judgment of human beings, and to better react to volatile market conditions, is critical under current conditions.
For example, market surveillance is a mammoth undertaking for most firms. Data comes from many sources and exists in many formats: trading systems, chat transcripts and voice recordings. This is where the use of AI/ML techniques can have a transformative impact. AI-driven Natural Language Processing enables voice data to be automatically transcribed and digitised, and then processed in a standard format alongside other electronic communications. Firms can also supplement and make more effective use of their supervision and surveillance teams and allocate their time to higher value activities.
Meanwhile, DLT sits at the core of these systems. DLT integration into existing infrastructure is going to be a crucial requirement for firms wishing to benefit from these massive efficiency improvements. It’s not just about integration, though – to fully leverage the wider capabilities offered by DLT, such as real-time settlement, firms need to start thinking now about the wider changes to their infrastructure that will be required to support increased digitisation.
In summary, as we look to 2021 budgets and beyond, technology investment will need to be deployed in the three above areas by firms wishing to maintain a competitive edge. Remote work, cloud computing and next-generation technologies like AI and DLT support the growing demand for automation in the City of London. CIOs will look to these technologies as drivers of operational efficiency, a means of better managing organisational risk, and as solutions for reducing dependency on large office environments.
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