Fintech on Friday: E-commerce trailblazers provide examples of how to deal with unforeseen disruption
As the scale and severity of Covid-19 continues to spread, business leaders find themselves grappling with a range of business continuity issues – and questioning the speed and effectiveness of their digital transformation programmes.
To forecast how accelerated innovation could shape the wealth management industry, Aon examined how some leading firms in the e-commerce space that service high net worth and mass affluent clients respond and thrive when faced with unforeseen disruption.
Solving genuine customer problems with data
Amazon was shaped by its founder’s 14 Leadership Principles. Customer obsession, its first pillar and the principal foundation of its business model, is how Amazon developed and maintains its status, even in challenging times. “If you’re competitor-focused, you have to wait until there is a competitor doing something,” says its founder Jeff Bezos. “Being customer-focused allows you to be more pioneering.”
Starting with the customer first and working backwards is a mantra shared across Amazon – and used to ensure total customer focus. Typically, this includes putting together a PR FAQ [Press Release Frequently Asked Questions] document. This contains information that would be pertinent to a press release – should the idea be successful – and a set of frequently asked questions.
The PR FAQ document encourages Amazon to think about issues from the customer’s point of view and explains to other teams in the organisation what pain-point their solution will solve. Idea generation, such as which features to introduce or scale up, is encouraged in every part of the business. These are quantified, reviewed and tested in the context of historic data and future projections.
Artificial Intelligence (AI) is increasingly used too – from product recommendations, to pricing, to sales forecasts. The tools blend existing data with forward-looking information, like search data for things people look for but are unable to find on the site; automate processes to minimise customers’ pain points; and crucially, where possible, enable self-service.
In financial services, technology and AI has the power to revolutionise productivity and the client experience. To solve client problems with data, wealth managers must be more structured in how they use data and get better at capturing client preferences. Even if a wealth manager’s client base is uniform, clients’ goals, needs and interests will evolve as their lives change, so using data to anticipate the forces that shape their decision-making is the best way to identify developing opportunities.
Build, buy, borrow
Businesses which need to develop their service proposition can approach innovation by adopting one of the three Bs – they can either build the proposition out through long-term investment, borrow it from another provider, or they can buy the content and integrate it into their own operations. In reality, most firms choose a hybrid strategy, combining different elements to enhance their proposition and appeal.
Dubai Duty Free (DDF) is one of the largest luxury retail and travel operators in the world, offering more than 120,000 lines of merchandise and processing 74,000 transactions a day. Unlike many other bricks and mortar operators, who have struggled to remain relevant and competitive, it has grown exponentially, due in large part to its partnerships and strategic collaborations.
“For every 100 people who go through Dubai airport, 29 of them buy something – and then of those people, 63 per cent go on to buy something a second time,” says Bernard Creed, Dubai Duty Free senior vice president. “Data and analytics is 100 per cent king in the client experience and we use it to drive our innovation. So, we’ve built a model that suggests what drives these purchases.”
According to Mr Creed, people typically wait around their departure gate and miss out on products, services or experiences that may make their journey much more enjoyable. DDF’s role is therefore to anticipate this behaviour and promote what it thinks travellers will be interested in without overstepping boundaries.
“We reach out to frequent travellers about specific product launches or new partnerships with vendors,” explains Mr Creed. “We offer travel exclusives – products that travellers can’t get anywhere else and also partner with brands like Ctrip – the Expedia of China – to reach consumers before they even leave their home.”
“We have indirect partnerships with the likes of Emirates Airlines and found that targeting passengers through strategic brands is more effective for us… It allows us to leverage something they’re doing well.” Mr Creed credits Emirates’ strong loyalty programme with bringing a significant share of transaction traffic through the airport: “It creates a lot of efficiencies for us and offers customers greater choice as they can redeem their air miles in our shops for products.”
Evolving wealth management propositions
A similar evolution in product and proposition development is happening in wealth management. Firms understand that having a range of products and services that appeal to different types of HNW clients is critical to keeping existing clients engaged, as well as attracting new ones.
The effects of the pandemic, already be observed in client behaviours, will continue to evolve. As more interactions are conducted online and more personal data becomes available, information and technology will compel business models to evolve.
To get ahead, firms should now be thinking about the best ways that products, processes and partnerships can complement each other. They should also be using this unique opportunity to experiment, to connect with clients on a new level, and to build longer term connections that will endure in the ‘new normal’.
Jenny Kvaskova, Client Insight, Aon
