Transacting Value: Obama Calls for Sweeping Financial Changes

[Posted by Ed Kountz]

 

On the regulatory front, another ominous sign for the financial services industry, with likely impact on e-Business strategists. President Obama today proposed a massive overhaul of the nation’s fiancial system, as an essential regulatory cornerstone for the future and to ensure that the factors underpinning the economic crisis are not repeated.

His changes would create a new consumer protection watchdog to prevent credit and financial practices deemed abusive, and increase the strength of the Federal Reserve with monitoring and oversight responisibiltiies to include new areas of the financial system. New simplicity requirements for consumer loan products would be among the changes enforced.

While increasing the powers of the Fed, the President’s plan would eliminate the Office of Thrift Supervision in favor of a new system. That new system would have broader powers, and would serve as the ueber-regulator for institutions, eliminating accountability gaps the president said led to the current crisis. 

Under Obama’s plan, the Federal Reserve would gain power to supervise holding companies and large financial institutions considered so big that their failure could undermine the nation’s financial system. But even as it gained new powers, the Fed would lose some banking authority to the new Consumer Financial Protection Agency.

Obama’s proposal would require the Federal Reserve, which now can independently use emergency powers to bail out failing banks, to first obtain Treasury Department approval before extending credit to institutions in “unusual and exigent circumstances.”

The specific areas of impact on eBusiness marketers will become clearer in the coming months, as dialogue on the new structure advances. But there is sure to be impact in key areas, as marketing and customer support efforts adapt to whatever stricter structrure emerges. What is clear now is, that, while cost-efficiencies can still be wrung out of the process of online migration and right-channeling, bigger picture is of the need to adapt products and brand positioning to the actual needs of customers, adding value in ways that are more personal and relelvant, and less-grounded in the products-first mentality of the past few years.

Observations after the Microsoft Travel Marketing Summit

[Posted by Diane Clarkson]

On June 10 - 12, I had the opportunity to attend the Microsoft Travel Marketing Summit along with 40 marketing executives from across the travel industry. It was a summit in the best sense of the word:  a forum of open and frank conversation about the challenges and opportunities within the travel industry today.

Here are a few points raised in conversations and panels that I thought were particularly interesting:

• Travel marketers understand the importance of social media to travelers. At the same time, the appropriate strategy can be elusive. Travel marketers are wary that for every success story, there are untold stories of social marketing efforts that didn't hit the mark. I have often written that now is the time to experiment and found it interesting that several companies reported their experimentation led to growing pains in understanding where social media sits internally: PR, marketing, operations. Many marketers reported their early social media efforts have led to internal joint ownership and collaboration processes grounded in legal and compliance guidelines.

• The question of brand versus performance advertising attracted many lively conversations. As John Peebles from Avis observed, to a large extent it is up to the customer if an ad is brand or response advertising. Attribution continues to be a challenge, further complicated by the influence of social media. I encourage our travel clients to read "Redefining Attribution in a Social Computing Era" by my colleague Emily Riley.

• Loyalty remains front of mind among travel marketers. As Forrester has reported, there has been a 19% decline in brand loyal travelers between 2006 and 2008. Loyalty programs are

  ubiquitous. Travelers belong to multiple programs and reset the playing field every time points are redeemed. Premier customer service will be an increasingly important component to a successful loyalty strategy.

Marketers echoed the findings we've had a Forrester: some people are not traveling and those who are are spending less. But there was no hand-wringing at last week's Summit. But there are opportunities; most simply, to do things better. As Randy Wooten of Micorsoft stated in his presentation, an economic meltdown is a terrible thing to waste.

Quick take on UK online retail from a US perspective

  By Zia Daniell Wigder

I just returned from a short trip to London where I had a chance to speak with a series of different UK-based online retailers. Most conversations included at least some discussion of how the economic climate was affecting the market, both within the US and the UK. When it comes to international expansion, the consensus seemed to be that the current economic environment was driving globalization rather than slowing it down. A few observations from my conversations:

Cross-border interest is growing, with most online retailers taking a first step through international shipping. While the UK remains by far the largest eCommerce market in Europe and the average UK consumer spends 50% more online than the next highest spenders (the Spanish and the Swiss), many UK online retailers are looking to other European markets for long-term growth opportunities. Both multichannel retailers in the UK and online pureplays are expanding through international shipping: last November, for example, Marks & Spencer launched international shipping to three European countries as well as the US, Canada and Australia. Apparel merchant Next ships to the EU countries of Central and Eastern Europe as well as most Western European destinations, while online pureplay Play.com ships free to over 25 European countries (although notably, the company does not ship electronics of any kind internationally). Indeed, the relative ease and low cost of shipments within the EU and to other European countries has prompted UK-based online retailers to expand their international horizons ahead of many of their US-based counterparts.

Increased localization remains an opportunity there, as well. While many online retailers in the UK are shipping internationally, few have launched translated, localized sites for other European markets. The companies at the top of the list of leading online retailers in the UK tend to include several US-based companies with international sites (Amazon, Apple, Dell) but very few UK-based ones (Argos has a site for Ireland, for example, while Epson operates sites for a handful of European countries). Like those in the US that have started to ship internationally, online retailers in the UK that are taking this first step toward globalization are missing an opportunity to provide local-language content. Not only can this step help retailers attract and convert international visitors on their sites, but it helps pave the way for more robust international offerings going forward. For more information on this topic, read our recently published report on the Translation and Localization of Retail Web Sites.

UK online retailers are eyeing the US market. It's not just the other European markets that are of interest to online retailers within the UK. There was a great deal of interest in the Boden model: the company entered the US in 2002 and by 2008, was getting one-third of its revenues from the US market. What was of particular interest to retailers was the fact that Boden did not have any type of warehousing or customer care facility in the US until last year – all fulfillment was done from the UK. Figleaves, too, with its 15-20% of revenues from the US is often cited as a role model for successful US expansion. The ability to leverage existing content – including user-generated content – across borders without extensive translation makes the US market particularly attractive to UK online retailers. Boden, for example, includes user reviews from both countries and has elected partial translation of terminology for the US site: its “Holiday Shop” shifts to a “Vacation Shop” on the US version, yet other terms used for navigation such as "Trousers" remain in the original British English, as do product descriptions.