Actionable Insights From APT's Retail Practice

How to Make the Most of the Mobile Landscape

October 25th, 2011 | Posted by retailblogadmin in Uncategorized - (Comments Off on How to Make the Most of the Mobile Landscape)

This past month, American Banker noted that many banks have found their online and mobile banking services are not providing a great user experience. The banks discussed have begun experimenting with different features and different pricing options for those features. As the article outlines, 8 of the top banks in the US are each spending approximately $100 million on these new web and mobile offerings.

New web and mobile services are great opportunities to improve customer satisfaction and retention and could even provide opportunities to increase fee revenue. Most web offerings currently allow for little more than routine tasks, but many banks are realizing that customers are looking for new types of tools and additional flexibility in how they manage their accounts. In light of this, banks are considering innovative features, such as: (more…)

Fiery Backlash from Debit Card Fees

October 15th, 2011 | Posted by Will Weidman in Financial Services | Uncategorized - (Comments Off on Fiery Backlash from Debit Card Fees)

Last Thursday, Bank of America announced it will begin charging a $5 monthly fee for debit card users with a basic checking account.  Many banks are still looking for ways to make up lost revenue due to the Durbin Amendment, which slashed debit card interchange fees.

This announcement was immediately followed by significant backlash. The Washington Post reported that “Bank of America got pummeled by investors and its customers Friday” and “saw its stock fall more than 2 percent in late-morning trading.”

We wrote about this topic two months ago, expressing that banks should follow the lead of Wells Fargo and Chase – testing new debit card strategies before implementing them.  While the initial press and stock price reaction may not have long term consequences, there is a real risk that these fees will drive customers away and ultimately hurt profitability.  This is why we argued that banks should try these new approaches first in a limited risk way to make sure it will work before rolling it out across the network.

Fee hikes are always difficult decisions to make.  Spread revenue is very low right now, and regulation is squeezing fee income.  But it is hard to anticipate the reaction to a new strategy and understand all of its potential consequences.  Despite the difficult environment, banks should be patient and test new ideas first to make the best decisions possible.

Large Stores Looking for Roommates: Must bring in profits

October 6th, 2011 | Posted by Jatin Atre in Retail | Uncategorized - (Comments Off on Large Stores Looking for Roommates: Must bring in profits)

Retailers have been keen proponents of always building it bigger. Many chains now have more than 100,000 square feet of selling space. In an ailing economy, these large stores face a double-whammy by having all that space: (1) to merchandise without appearing sparsely stocked, they have to carry a lot of low turnover inventory, and (2) large square footage destroys a key comparative metric that Wall Street values – sales per square foot.

Many large stores are looking to sublease some of this space. Stores are considering a variety of possible roommates: store-in-store, kiosks, outright leasing to other retailers. As stores consider these options, they should analyze three key questions: (more…)

The Writing is on the Wall: Some Customers Shift to Exclusively Mobile Banking

October 4th, 2011 | Posted by CLepine in Financial Services | Uncategorized - (Comments Off on The Writing is on the Wall: Some Customers Shift to Exclusively Mobile Banking)

Market research firms comScore and Nielsen report that, in 2011, the number of customers using mobile banking rose 54% over last year to 30 million. comScore also explains that in a recent study of ~1,000 customers, only 10% report accessing their financial accounts by visiting a brick and mortar branch.

As part of this shift, exclusively online banks, for instance ING Direct and Ally Bank , have seen growth over the past year, a result due in part to increased use of smartphones, streamlined data plans, and a backlash against higher fees at traditional banks. Because of their lower overhead costs, these online banks are able to offer expanded services, like a surcharge free ATM network, accounts with higher checking and savings yields, and lower fees.

Traditional banks need to be proactive in order to be competitive with exclusively online banks, rather than scrambling to react to it after it’s already in place. (more…)

The New Details of Retail: Data

October 3rd, 2011 | Posted by Guru Raj in Retail | Uncategorized - (Comments Off on The New Details of Retail: Data)

Retail and consumer companies are rife with stories about highly fastidious founders.  A colleague recounted how he witnessed the head of a major chain of hotels getting on his hands and knees to personally check if the drip pans under the refrigerators were clean.  Similarly, Sam Walton was famous for flying a prop-plane from store to store, and along the way, touching down wherever he saw a promising empty lot for a new store.

Today, leaders need to look beyond physical sites, store managers, and DCs and apply that same discipline to other aspects of their business.  The foundation for good decision-making is data. (more…)