Given the succession of own-goals scored by traditional bankers over the years, it is surprising that the grocery multiples have taken so long to enter the financial services arena.
These ‘unsophisticated money-shopkeepers’ will make a major impact on the sector by simplifying finance for the layman-shopper, removing the mystique and over time they will educate their public in the appreciation of financial value-for-money, in a refreshingly transparent environment.
The grocery multiples have the capability of becoming money-shops where speed-of-transaction drives efficiency and cost reduction, reflected in competition-based lower prices. Apart from reaping the benefits of anti-banking media coverage, the multiples’ efficiencies and their ability to negotiate good wholesale terms will ensure that they can always compete on price with traditional banks.
This will be in marked contrast with traditional banking, with their opaque business offerings, where ‘slowness’ is regarded as a virtue, deadlines are measured in weeks rather than minutes, where secrecy prevails over openness and transparency, all at the customer’s expense, in a cosy club of like-minded practitioners, all intent on maintaining parity in the provision of financial services.
Thankfully, this year’s virtual collapse of the banking system coupled with unprecedented economic turmoil has violently de-stabilised the status quo, creating in the process one of the largest windows of opportunity ever made available to good money-shopkeepers…
Apart from the distraction of competing in an exciting new category with little real opposition, the multiples’ development of the financial services category will bring with it a fundamental change in their corporate culture. The renewed focus upon money and financial performance will not only help in presenting a competitive offer on shelf, but it will also cause the retailer to reassess all aspects of the supplier-retailer relationship in financial terms, to an unprecedented degree of detail. In practice, all members of the decision-making-unit will become more financially aware, measuring input-output in financial terms, constantly.
In other words, suppliers will need to become adept at demonstrating the financial impact of the brands on the customer's profitability…
More of this in September edition of Namnews
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