NEW YORK, April 26, 2011 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Lessons for Retailers in Financial Services

http://www.reportlinker.com/p0484879/Lessons-for-Retailers-in-Financial-Services.html

Low profit margins in groceries have incentivized retailers to expand their non-food allocation. The FS industry offers attractive cross selling opportunities as retailers can leverage their extensive customer information to yield advantages in the financial services domain. This report explores the strategies that are essential for successfully crossing into the financial services space. Improve entry strategy through better understanding the advantages and disadvantages of affinity partnerships. Create an appropriate product range through understanding the need to build a reputation for excellence before expanding into new product arenas. Improve customer acquisition through an appreciation of the role of independent recognition and rewards schemes. Trust in personal banks has however remained robust throughout the downturn. Banks may have suffered as an industry collectively but many consumers have felt their relationships with their personal bank remain relatively unchanged. Few consumers lost money directly from bank collapses given the extensive government guarantees in place. Affinity partnerships between retailers and FS providers have become commonplace in providing retailers an easier route into the financial services domain. This normally takes the form of 'white labeling', where retailers offer their partner's financial products repackaged bearing the supermarket brand. Supermarkets and other popular retailers must ensure they have the reward systems in place to offer enough of an incentive for consumers to go through the hassle of moving their primary bank. The rewards present must be obvious and attractive, the majority of consumers will not take the time to move if the savings are only minor What are the barriers to entry for retailers looking at the FS sector? How has the recession changed consumers' attitudes to their banks? What advantages do retailers have compared to other institutions in entering the FS market? What are the pitfalls to avoid on entering this competitive market?

OVERVIEW

Catalyst

Summary

Methodology

INTRODUCTION

Insight: Significant barriers to entry exist for the FS industry

The growing commoditization of FS products should encourage would-be entrants

Insight: The banking crisis created an opportunity for new entrants but entry remains challenging

Trust in personal banks has however remained robust throughout the downturn

Insight: Retailers are looking to boost revenue through distributing FS products

Retailers have proven capable of overcoming many of the barriers to the FS industry through partnerships

Insight: Affinity partnerships offered retailers a low cost route to the FS market

Insight: In 2011 and beyond retailers will increasingly become the manufacturers of FS products

Potential upsides:

Potential downsides:

Key considerations for retailers targeting the FS sector

KEY LESSONS

Lesson 1: Retailers must be transparent about their partnerships or they risk sowing early seeds of distrust amongst consumers

Retailers must embrace their partnerships and present them to the consumer as being in their interest

Retailers need to avoid the unpleasant surprise and instead highlight the advantages of their partnerships

Retailers must promote values of honesty and professionalism if they are to target difficult silos of the FS market

Lesson 2: Acquisition of core banking services will be challenging and costly

Consumers are more trusting of banks to deal with complicated money matters

Lesson 3: Independent recognition is essential to retailers whose experience may be questioned by careful consumers

Retailers are beginning to gain experience and recognition in the FS market

Lesson 4: Creating an appropriate product range must be perfectly timed and well crafted

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Retailers must offer a product range to suit different tastes and needs

Retailers must be careful not to grow overconfident from early success and overstretch their reach

Lesson 5: Switching strategies must focus on the real benefits retailers have to offer

Convenience is a powerful attraction to consumers

Rewards and loyalty schemes are hugely important for incentivizing consumers to take a risk and switch providers

GLOBAL CASE STUDIES

Walmart: number one global retail power

Walmart: low cost quality FS services appeal to Walmart's value driven consumers

Walmart card and money services aim to deliver quality at value

Walmart has successfully targeted the unbanked

Savings and insurance products could offer quick wins for Walmart

Kruidvat: health and beauty player offers a range of FS products

Kruidvat is a leading Dutch retailer and maintains a partnership with traditional banks to provide its FS products

Kruidvat leverages its partnerships to offer an extensive range of FS products

Kruidvat's targets most of the major FS products through a convenience driven model

Seven & I Holdings: Convenient FS products offered through a unique ATM format

Seven & I Holdings is a global convenience store and a local bank

Seven & I Holdings' business strategy is evolving

ATMS and its prepaid store card forms the core Seven & I Holdings FS product

Seven & I Holdings' FS strategy has been focused on ATMs but is adapting to new needs

Spencer's: Fast growing indian retailer focuses on Rewards vouchers

Spencer's had earned recognition within the market for the success of its offering

High quality, lifestyle driven products will appeal to India's burgeoning middle class

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The financial services Megatrends framework

Datamonitor has identified 10 Megatrends in consumer behavior

A Megatrend framework is vital for financial services

There are 10 Megatrends that impact on the actions and attitudes of financial services customers

Methodology

Ask the analyst

Datamonitor consulting

Disclaimer

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Nicolas Bombourg
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