Wednesday 18 November 2009

Supermarkets underestimating problems of breaking into the banking market?

How about bankers underestimating Supermarkets?
Today's contributors to the traditional banking backlash against supermarkets might consider the following:

  • Major multiples don't do 'underestimating problems'
  • Shopkeepers operate in an output-focused, numbers-based, 'no-nonsence', customer-orientated environment
  • They aim at sharing cost-savings and value with repeat-visit, life-time-value shoppers
    Their loyalty schemes give them more usable customer-insight than a bank would be trusted to handle
  • They constantly strive to enrich the shopping experience
  • They operate systems that can turn 50,000 lines 25 times a year, with 95+% onshelf availability
  • They play the money markets with daily takings and 30+ day's credit from suppliers, some earning upwards of £200m per annum in the process
  • They start with a gross margin of 25% and still make 5% net
  • They come with none of the traditional banker 'trust-baggage'
  • They are fully staffed during the 'lunch-hour'……

Traditional banks don't seem to appreciate that the game has changed, changed utterly…underestimating the threat posed by new players that learn fast, and don't take prisoners…..!

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