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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