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The Digital Future: A Game Plan for Consumer Packaged Goods

August 25, 2014 Comments off

The Digital Future: A Game Plan for Consumer Packaged Goods
Source: Boston Consulting Group

“The best way to predict the future is to create it,” Peter Drucker observed. The digital revolution puts the ability to do just that within the reach of almost any company.

Consumers are already there. Aided by digital innovators ranging from behemoth Amazon to start-ups such as Blue Apron and Dollar Shave Club, consumers are rapidly changing—and, in their eyes, improving—the way that they live. They are embracing technologies, devices, and services that make everyday tasks such as shopping, cooking, and even commuting quicker, easier, more fun, and more efficient. They order online, they get suggestions and reminders on their smartphones, and they marry disparate services such as menu planning, ordering, and delivery in ways that even the service providers had not anticipated.

Consumers relish digital innovation for the simple reason that it makes their lives better, which is why digital technologies have disrupted industry after industry—media, travel, and retail, to name a few. Digital technologies empower change driven by consumer demand. Consumer packaged goods (CPG) stand directly in their path.

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Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

August 20, 2014 Comments off

Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data
Source: Federal Reserve Bank of Boston

We measure consumers’ use of cash by harmonizing payment diary surveys from seven countries. The seven diary surveys were conducted in 2009 (Canada), 2010 (Australia), 2011 (Austria, France, Germany, and the Netherlands), and 2012 (the United States). Our paper finds cross-country differences — for example, the level of cash use differs across countries. Cash has not disappeared as a payment instrument, especially for low-value transactions. We also find that the use of cash is strongly correlated with transaction size, demographics, and point-of-sale characteristics such as merchant card acceptance and venue.

2014 Retail Credit Card Survey data

August 19, 2014 Comments off

2014 Retail Credit Card Survey data
Source: CreditCards.com

Higher APRs, more use-anywhere cards and fancier, tiered rewards are now prominent features of retail store credit card programs, according to the 2014 CreditCards.com Retail Credit Card Survey.

The chart below provides details of the 61 retail credit cards issued by the 36 largest retailers in the U.S. that offer cards. Both the retailers’ store-only cards and their general use (co-branded) cards are included.

UK — Internet Access – Households and Individuals 2014

August 11, 2014 Comments off

Internet Access – Households and Individuals 2014
Source: Office for National Statistics

Key Points

  • In 2014, 38 million adults (76%) in Great Britain accessed the Internet every day, 21 million more than in 2006, when directly comparable records began.
  • Access to the Internet using a mobile phone more than doubled between 2010 and 2014, from 24% to 58%.
  • In 2014, 74% of all adults bought goods or services online, up from 53% in 2008. Clothes (49%) were the most popular online purchase in 2014.
  • Of all adults in Great Britain, 67% are aware of Internet storage space services, but the take up of these services to store data is much lower at 35%.
  • In Great Britain, 22 million households (84%) had Internet access in 2014, up from 57% in 2006.
  • Fixed broadband Internet connections were used by 91% of households.

 

Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform

August 5, 2014 Comments off

Sales Tax Holidays: An Ineffective Alternative to Real Sales Tax Reform
Source: Institute on Taxation and Economic Policy

Sales taxes are an important revenue source, comprising close to half of all state revenues in 2013. But sales taxes are also inherently regressive because the lower a family’s income, the more of its income the family must spend on things subject to the tax. Lawmakers in many states have enacted “sales tax holidays” (at least 16 states will hold them in 2014), providing a temporary break on paying the tax on purchases of clothing, computers and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, in fact their benefits are minimal. This policy brief examines the many problems associated with using sales tax holidays as a tax reduction device and concludes that they have more political than policy benefits.

Majority of Parents Say They Will Increase Back-to-School Spending This Year and Most Plan to Shop in a Physical Store, Accenture Survey Finds

July 30, 2014 Comments off

Majority of Parents Say They Will Increase Back-to-School Spending This Year and Most Plan to Shop in a Physical Store, Accenture Survey Finds
Source: Accenture

A majority of parents plan to spend more on their children’s back-to-school shopping this year, driven by rising costs or necessity rather than greater spending power, according to a survey released today by Accenture (NYSE:ACN). The Accenture Back-to-School Shopping Survey, which polled U.S. parents of children entering kindergarten through college, shows that nearly all (89 percent) plan to do most of their back-to-school shopping in a physical store, though many will still use online to browse and search – “webrooming.”

According to the survey, two-thirds of parents (67 percent) plan to spend between $100 and $500 and 41 percent plan to spend $500 or more for back-to-school shopping this year. Compared to last year, just over half (52 percent) of the parents said they will spend more on back-to-school shopping than last year, 37 percent plan to spend the same and only 11 percent expect to spend less. One-third (33 percent) of parents spending more plan to increase their spending by $250 or more. Among the reasons given for the spending increase, 71 percent cited higher prices and 56 percent cited increased school requirements. Nearly one in five parents (19 percent) said they will spend more in order to help their children “keep up with their friends.”

The survey results demonstrate the growing importance of the seamless shopping experience. For example, nearly eight out of 10 (79 percent) plan to participate in “webrooming” – browsing online and then going to a store to make their purchase. The top reasons respondents cited for webrooming were: to check if an item is in stock before going to a store to make a purchase (47 percent); to touch and feel the product before buying (43 percent); to avoid shipping costs (43 percent); and to ask the store to match a better price found online (33 percent).

China’s digital transformation

July 29, 2014 Comments off

China’s digital transformation
Source: McKinsey & Company

As individual companies adopt web technologies, they gain the ability to streamline everything from product development and supply-chain management to sales, marketing, and customer interactions. For China’s small enterprises, greater digitization provides an opportunity to boost their labor productivity, collaborate in new ways, and expand their reach via e-commerce. In fact, new applications of the Internet could account for up to 22 percent of China’s labor-productivity growth by 2025.

Yet the Internet is not merely a tool for automation and efficiency; it also expands markets rapidly. Greater adoption of web technologies in China could lead to the introduction of entirely new products and services if government and industry take the right steps to maximize the potential (exhibit). A new report from the McKinsey Global Institute (MGI), China’s digital transformation: The Internet’s impact on productivity and growth, projects that new Internet applications could fuel some 7 to 22 percent of China’s incremental GDP growth through 2025, depending on the rate of adoption. That translates into 4 trillion to 14 trillion renminbi in annual GDP in 2025.

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