the forecast 2009

8/14/2019 The Forecast 2009

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The Forecast

www.customer-strategy.co.uk/csfeatures

2009


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worse than 1990-93.The collapse in Sterling will help

exporters margins but at the sametime trash importers margins. Andgiven the global demand picturevolume growth will be constrained.

The wealth o the average Britwill drop by a third in 2009. His or her

income in real terms will be at i theyare still in work. They will also raisetheir savings rate due to ear anduncertainty. This will take about 30Bn o consumer spending. The Govern-ment will be borrowing 140 Bn. This isthe right thing to do to avoid a depres-sion but it will not stop the recession.

So in pictorial terms it looks like thegure opposite. The chart is orecast-ing a U shaped recession. What doesall this mean i you are responsible ora business unit, or a team o customeracing employees?

Value drives market shareGrowth will be at the expense o others.It will be all about taking share byhaving a superior value proposition.

Now more than ever the qualityo leadership will matter. There is

a tendency or the Board to go intopurdah because they think they mustcome up with the solution . So justwhen their presence is required by theemployees , they are absent. The act

The wealth o theaverage Brit will drop by a third in2009. His or her

income in real terms will be at i they are still in work.They will also raisetheir savings ratedue to ear and uncertainty. This

will take about 30 billion o consumer spending. Thegovernment is borrowing 140 billion which should avoid depression but not a deep recession

Roger Mart in-Fagg 02

I n a word it is grim. Here is why.Most Western Banks are practicallyinsolvent. This is because o the lossin value o houses and commercial prop-erty. I a bank has lent more than 90%o the value in the past two years thenthey will be charging their capital basewith that loss. This reduces their ability

to lend. For every 1 o provisions, theability to lend is reduced by 10.The rate o credit creation was

running at 14% a year until August2008, then it began to all. Now it isbarely growing at 3.8% year on year.This why the Bank o England hasdropped interest rates to 2%. HoweverLIBOR, the rate at which banks lendto each other is likely to remain atbetween 3 and 4 %. And it isnt pricewhich is the problem, its the lack ocapital. We need money supply to growabove 7% or a growing economy.

Customer wealth to drop by a thirdNext year real GDP is likely to shrink by2%, and unemployment will be closeto three million by 2010. Most businesswill need to get their break-evenpoint down by about 10 % through a

combination o price increases ( yeseven in a recession) and head-countreductions. Retail sales volumes willbe negative, and value growth will bebetween one and two percent. This is

Leading economist Roger Martin-Fagg gives his take on theeconomic prospects or 2009 and sees good prospects or

organisations that get their customer strategies spot on

Customer strategyin 2009 its allabout market share


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We are entering a tough year which will requireorganisations todrive innovativecustomer serviceThere will be losers,

but they will releaseresources or thevalue creators.History shows that really good businesses makehealthy returns in a

shrinking economy

Roger Mart in-Fagg 03

U-shaped recession

Average LIBOR interest rate

-6

84 85 86 87 88 89 90 91 92 93 94 95 0296 0397 0498 0599 06 0900 07 1001 08 11

-5-4

-3-2-10123456789

101112

29

11 8 13.5 5.5 6.5 5 4 4.5 611 15 10 6.5 7.25 6 3.75 5.25 4.58 15 5.5 6 6.75 4.5 4.75 5.75 4

17 25 51 44 (36) 11 18

UK REAL M4 GROWTH - ANNUAL % CHANGE *

UK GROSS DOMESTIC PRODUCT - AVERAGE ESTIMATE ANNUAL % CHANGE

UK VOLUME OF RETAIL SALES - ANNUAL % CHANGE

NORMAL M4 DEFLATED BY THE RPI EXCLUDING MORTGAGE INTEREST PAYMENTS

QUARTERLY PERIODS WHEN STOCKS WERE REDUCED % change in FT all share index *

and listen to the answers, thenchoose the best option. In a reces-sion leaders tend to go le t brain andbecome ruthlessly analytical, whenwhat is required is a right brain, intui-tive response to the customer andhow they view value. To slash pricesis classic le t brain behaviour.

So we are entering a very toughyear which will require organisationsto drive innovative customer service

to succeed. There will be losers, butthey will release resources or thesuperior value creators. History showsthat really good businesses make goodreturns in a shrinking economy.

Roger Martin-Fagg is recognised as oneo the world's leading economists and

thinkers. He is leading economist and

director at Henley Management College

is that this recession is di erent romprevious ones and cooperative deci-sion making is the only way successcan come through. This mean Leadershave to share with the ollowers thesituation and ask or possible solutionsand then make a judgement call. Thecollective wisdom will always besuperior to the wisdom o one. The bigquestion will be how can we improveour value proposition The toxic

assumption will be by reducing priceAnd there are many alternatives,

but leaders will need to get amongsttheir employees to nd out what theyare, they need to ask the questions


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Frank Kirwan04

T he good news - and there isntmuch o that - is that in ationis dropping as energy andcommodity prices all and interestrate cuts reduce mortgage payments.This process still has some way togo - and in ation may actually turnnegative or a ew months.

The bad news is that output is

also alling. All the major componentso spending, with the exception ogovernment, are contracting. Consum-ers expenditure, investment spending,inventory building and exports are alldetracting rom demand in the UK andUS right now. These processes alsohave some way to go as unemploymentrises, household incomes contract anduncertainty undermines con dence.

The UK government hasannounced a major stimulus package.In the absence o similar packagesrom most o its trading partners,however, much o the stimulus willleak through imports, stimulatingthe French and German economies asmuch as that o the UK.

The nal piece o bad news isthat the world may be at a geo-political in ection point, triggered by

unprecedented instability in energy-producing countries, the unknownimplications o Russias resurgence,the continuing rise o India and China,threats to major shipping lanes andother actors. The world o 2015may look very di erent rom the UShegemony o the last 50 years.

It is di icult to see how things willquickly get better. While output may

cease to contract which is very di er-ent rom a recovery in 2010, there isa real danger in lation will rise again,

driven by the huge injections o liquid-ity required by bailouts and stimuluspackages. Independent central bankswith mandates to control in lation arelikely to react by raising interest rates,dampening any recovery in the process.

Should that happen, many govern-ments will have little urther capabilityto stimulate their economies. The debt

and tax consequences o the 2008-9stimulus packages will pre-empturther tax cuts or increases in publicspending. There is a real danger thatthe second stage o this crisis will becharacterised by stag ation stagnantoutput and rising in ation.

Downturn set to be deeper andlongerSome undamental political andeconomic issues are also likely to bebrought into stark relie in the comingyears, with potentially serious e ectson the recovery either through thesupply o credit, through industrialaction, or through political con ict.Possible riction points include whethera sector as critical to society as bankingcan be privately-owned, and wouldpublic ownership, and consequent allo-

cation o capital, be better at promotingstability and economic growth?

How can the international nancialsector be regulated to balance risk tosociety and return to capitalists? Cana shrunken private sector, whose ownpension provision alls well short owhat is required, continue to undindex-linked, nal-salary public-sectorpensions?

For all the reasons set out here,it is di cult to avoid the conclusionthat the depth and duration o this

downturn are likely to be greaterthan generally appreciated. This iscurrently both a crisis o liquidity,where companies struggle to ndenough cash or credit to pay the bills,and solvency, where assets exceedliabilities i both are marked to market.Public policy can address liquidity,and reduce the possibility o viablebusinesses ailing due to lack o credit,much more readily than solvency.

Tackling the solvency crisis ismore di cult because prices o manycategories o assets are uncertainto an unprecedented degree. This isparticularly the case with propertyand property-related nancialinstruments. In many cases, there aresimply no buyers and prices cannotbe established. Marking to market isimpossible in such circumstances.

In addition, no-one is clear whoholds the dud assets. This uncertaintyundermines con dence and tradecontracts , the current shrinking othe interbank market being the primeexample. It is likely that the true scaleo insolvency has yet to emerge.

Crises lots o crisesThere are calls or governments topurchase the dud assets, therebyremoving the uncertainty and putting aloor on prices. But many governmentshave already guaranteed liabilities arin excess o their national incomes, sotheir scope to do more is limited. Themarkets have thus ar not explicitlychallenged governments ability to payi these guarantees ever have to behonoured. Should markets turn moresceptical, there might well be liquidity,

solvency and currency crises simulta-neously, particularly involving thosecurrencies, such as sterling, which arenot part o a major currency bloc.

Government scope to stimulate theeconomy urther through monetarypolicy is limited. While central bankseverywhere are reducing interestrates in an attempt to encourageconsumer and investment spending,

and to reduce the likelihood o debtde aults and insolvency, the scope todo so gets smaller as rates get closer

Frank Kirwan rom the University o EdinburghManagement School sees a long and bumpyroad ahead as in true Orwellian ashion somecustomers will become more equal than others

Some customers moreequal than others


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Frank Kirwan05

For a start, compa-nies need to re-ex-amine how customervalue is assessed.The old metrics maywell be misleading

as the recessionradically changesthe distribution odisposable income.As interest rates onsavings all and stockmarkets and pensionunds tumble, oldercustomer segments,which have beendisproportionatelypro table or somerms, may see theirpurchasing powerreduced dramatically.

Dont recruit new customers indis-criminately. A largerpercentage o thoseavailable will havebeen shed by yourcompetitors, who willbe working hardestto keep their bestprospects. Bewareo picking up theirdiscards.

Focus more o themarket ing spend ongenerating customerre errals. Customersalready on the booksare the best prospects

in terms o propensityto purchase and costto acquire. Divertsome o the conven-tional advertisingbudget to re erralgeneration?

Actively manage(deter?) unpro tableexisting customers,but note the caveaton historic pro t-ability above. Pricesuch customers outat renewal where thepurchase is an annualone, such as insur-ance. Downgradeservice to them i thiscan be done withoutdamage to the brand.Force them ontoautomated channels.Be acquisition-ready. Acquire thewalking wounded,but beware o

straying outsideyour own industryand expertise. Someo your competitorswill ail, or makedistressed sales o

part o their opera-tions. I you havehusbanded yourcash and managedyour operationsefciently, there willbe scope to capturethese customers,whether througha traditional M&Aroute or throughadept marketing ascustomers de ectrom a ailing rival.But be ore embark-ing on M&A, rstsatis y yoursel thatmarketing is not be amore e ective wayo acquiring suchcustomers.

Customer Service Strategies: What to do now

to zero, which they are already nearing.Interest rates cannot go negative. Whilecentral banks are reducing rates, the sheerscale o bond issuance implied by statebailouts and budgets will tend to pushinterest rates up. There may be urtherdecoupling o o cial rom market rates asa result, with the latter being signi cantlyhigher. So, given all the challenges, howcan businesses respond? Heres a ive pointplan:1. The obvious immediate step is to

minimise debtors and maximise cash.Investment in creditor and debtor management is likely to be well repaid.

2. Make the cost base as variable as possible. Where labour costs are a largeproportion o the total, exploit thescope or pro t-related remunerationto the ull. Use part-time and casual labour wherever possible, introduce

sabbaticals and unpaid leave.3. Start charging or the things that have

hitherto been ree, or where charges have been waived; it all bolsters cash.

4. Examine the basis o how your product is diferentiated rom the competitors.The middle-ground (neither bargainbasement nor luxury) is the most likely battleground in a downturn so dont be caught there with a me too ofering.

5. Dont cut R&D or product development; i nothing else, its cheaper to und as interest rates all. There is someevidence, albeit rom milder down-turns, that rms able to maintain suchinvestments see greater increases inmarket share and pro tability in therst years o recovery than their morerisk-averse, or cash-constrained, rivals.

There will be an upturn. There alwayshas been. But this one may take longer

to emerge and may be more muted. Theimportant thing is to be amongst thosele t standing when it does.

Dont recruit new customers indiscriminately. A larger percentage o those available will have been shed by your competitors, who will be working hardest to keep their best prospects.Beware o picking up their discards

Frank Kirwan is a highlyrespected economist and

commentator rom theUniversity o Edinburgh

Management School andis a omer business leaderin his own right


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David Smith06

The UK consumer is acedwith evolving changes andtrends that have ar reaching

consequences or every businesssegment today. The changes andtrends occurring are not randomevents but have their origins in acomplex interplay o ever advancingtechnological progress, deep seatedsocial changes and economic events.

In the summer o 1997 the UKgenerated enough GDP to cover itsoutstanding amount o consumerdebt. Ten years later UK consumer debttotalled 1,345 billion, signalling adecisive societal shi t towards instantgrati cation and de erred paymentthat in October 2008 culminated ina 1.44 trillion hole. With the risein debt uelled spending came anincrease in personal insolvencies thatin 1997 amounted to some 24,000 ayear. By 2006 this had increased to107,000 with estimates or the endo 2008 made at the beginning o theyear around 130,000 . Furthermoreit is estimated that about one millionBritons have problem unsecureddebts that total 25bn - an averageo 25,000 each . The credit crisis anddeclining house values across the U.K

have the potential to alter the attitudethat has seen these debts mount.

I think there is a mood o auster-ity, Vince Cable, nance spokesmanor the Liberal Democrat party, said in arecent speech, talking about society asa whole as well as the banking system.A reaction against greed, excess,waste, tax cheating and sel sh,sel -indulgent behavior. Indeed, there

is evidence that Britain is tackling itsdebt problems now that the creditcrisis is impacting the real economy.

Over hal (55 per cent) o UK adultsare taking action to clear their debtaccording to a Lloyds TSB report. 32 percent have increased the amount theypay o each month, with a urther 19per cent ocusing on paying o more otheir debt borrowed on higher interestrates, such as store cards.

With unemployment set to rise upto 2.7 million by late 2010 and credit

remaining expensive it is ar romassured that these recent consumeractions will insulate against thee ects o recession. I consumer con -dence is anything to judge, it wouldappear that the economic situationwill impact U.K consumers strongly.A Gf NOP survey charting an indexmeasuring ears or personalnancial wellbeing over the next12 months in July shows the publicmood to be at the lowest point since1994. However the eelings about thegeneral economic situation aced inthe UK are the lowest ever seen .

The new realityThe new nancial reality is leadingmany consumers to the internet inan attempt to save money or at thevery least limit expenditure. This is

the rst real economic downturn tohave occurred during the Internetage, and Hitwise data provides someascinating insights into how peopleare reacting, commented Robin Goad,Research Director or Hitwise in theUK. As you would expect, people areusing the Internet to nd cheapergoods and services, but also to ndin ormation on everything rom the

reasons behind the credit crunch tomoney saving DIY tips .

A look at the data shows UK

internet visits to retail price compari-son sites increased by 20 per centbetween July 2007 and 2008 ollowinga two year period o declining visits.Likewise, summer sales searchesincreased three old this yearcompared with last, while consumerssearching or discount vouchers haveled to a 130 per cent increase in tra cto specialist voucher websites.

The data also reveals that inter-

net searches or ethical consumerproducts such as air trade and organichave remained static over the last12 months, perhaps indicating pricesensitivity on premium products.However searches or pragmaticmoney saving items have risen termssuch as lo t insulation and under oorheating have more than doubled overthe last 12 months. Similarly, UK Inter-

net tra c to the websites o gas andelectricity providers has also doubledover the same period, as consumershunt to nd the best deal.

The use o the internet or morecomplex consumption and interactionwill be well underway by the end o2011. This is when Gartner believe 80percent o active Internet users (andFortune 500 enterprises) will havea second li e, but not necessarily inSecond Li e . Datamonitor similarlypredicts 27.1 million Britons will be usingsocial networking by 2012, almost atrebling o todays usage igure .

New technologies are not onlyallowing people a di erent way totrack nancial outgoings and searchor discounted rates but are acilitat-ing deep seated social change. AYellow Pages survey o 2003 ound

that 85 per cent o respondentsnationwide elt that the UKs 9-5culture was in decline. Almost 90 percent agreed that the UK li estyle hadbecome increasingly 24/7 over the lastve years and 86 per cent elt that thisgave them the exibility to do whatthey want, when they want .

Blend rather than balance

The 24/7 society is thus characterisednot so much by a work/li e balance buta work/li e blend. Inability to escape

David Smith, chie executive Global Futures andForesight sets the scene or a sector by sector guideto the challenges being aced and the customerstrategies that need to be taken up by organisations

Industry sectors an overview


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David Smith07

work, essentially through a combina-tion o one or more new age communi-cation mediums is leading to increasingstress. Over 50 per cent o workingBritons believe their job is becomingincreasingly stress ul and this is setto increase already worrying gures.Work-related stress accounts or over athird o all new incidences o ill health,and in 2006/07, a total o 13.8 millionworking days were lost to work-related

stress, depression and anxiety accord-ing to Pro essor Smith o the School oPsychology at Cardi University.

The social e ects o eeling timepressured and stressed are by nomeans con ned to the o ce. Theaverage Brit gets just over six-and-a-hal hours o sleep every night, about30 minutes short o the recommendedamount. 26 per cent o people struggle

to sleep because o work place stress.The e ects o this shouldnt be under-estimated; hal say their lack o sleephas an e ect on the quality o their

Sta appearance 7.8 7.9 7.6 7.5 7.8 8.1 7.3 7.6 7.5 7.2 7.1 7.4Help ulness o sta 7.8 7.9 7.6 7.6 7.7 7.8 7.3 7.4 7.2 6.9 6.8 6.8Friendliness o sta 7.8 8.0 7.6 7.7 7.7 7.8 7.3 7.5 7.2 7.1 7.0 6.8Competence o sta 7.6 7.8 7.4 7.6 7.6 7.6 7.1 7.3 7.2 6.7 6.7 6.6Treated like a valued customer 7.3 7.7 7.2 7.3 7.4 7.1 6.7 6.7 6.5 6.4 6.2 5.9Pro essionalism 76.5 78.4 74.9 75.4 76.1 76.4 71.2 72.9 70.9 67.8 66.4 66.5Reputation 8.0 8.0 7.9 7.8 7.9 7.6 7.4 6.8 7.0 7.1 6.7 6.0Price /cost 7.9 7.3 7.7 7.4 6.8 6.8 7.3 6.5 6.7 6.6 5.5 5.6Product/service quali ty 8.0 7.8 7.9 7.6 7.6 7.3 7.3 7.0 6.8 7.0 6.6 6.0Billing 8.0 7.7 7.8 7.6 7.5 7.1 7.5 7.1 7.2 7.0 6.3 6.1Quality & Efciency 79.4 76.6 78.5 75.7 74.4 72.8 73.2 68.2 68.7 69.4 62.4 59.8Continuity o sta 7.4 7.7 7.2 7.1 7.4 7.3 6.7 7.0 6.9 6.2 6.2 6.3Product/service range 8.2 7.8 8.0 7.8 7.9 7.6 7.5 7.2 7.1 7.4 6.7 6.4In ormation/advice 7.7 7.7 7.6 7.6 7.6 7.4 7.3 7.2 7.0 6.8 6.5 6.4

Ease o doing business 7.9 7.9 7.9 7.7 7.6 7.3 7.6 6.9 7.3 6.6 6.4 6.0Tangibles 7.9 7.8 7.8 7.5 7.9 7.8 7.4 7.1 7.1 7.3 6.9 6.9Ease o doing business 78.7 77.7 77.3 76.0 76.8 74.6 73.1 70.9 70.5 68.5 65.3 63.8Handling o enquir ies 7.6 7.6 7.4 7.5 7.5 7.2 7.1 6.9 6.8 6.5 6.4 6.2Being kept in ormed 7.5 7.5 7.4 7.4 7.3 7.2 7.1 6.7 6.7 6.5 6.2 5.9The outcome o the complaint 5.5 4.5 5.4 4.2 5.4 4.5 5.1 4.1 4.1 4.8 4.3 3.8Handling o the complaint 5.0 4.1 5.1 3.8 5.2 3.9 4.8 3.8 3.9 3.8 3.6 3.2Problem solving 75.5 75.5 74.1 74.3 73.7 71.7 70.6 68.2 67.6 64.6 63.2 60.2Speed o service 7.4 7.7 7.3 7.5 7.3 7.1 7.0 6.6 6.9 6.4 6.3 5.9On time deliver y/solution 7.6 7.7 7.6 7.5 7.5 7.1 7.2 6.7 6.8 6.6 6.4 5.9Timeliness 74.1 77.0 73.7 75.1 73.8 70.9 70.9 66.2 68.6 64.7 63.7 58.7CSI 77.4 77.3 76.1 75.5 75.4 73.9 72.0 70.2 69.7 67.5 64.4 62.6Retention 8.4 7.8 8.4 7.4 7.6 7.6 7.7 8.0 7.4 7.0 6.4 7.1Recommendation 8.1 7.6 8.0 7.3 7.6 6.9 7.2 7.0 6.9 6.5 5.8 5.7Repurchase 8.4 7.5 8.3 7.1 7.6 6.8 7.5 7.2 7.0 6.3 5.5 5.8Loyalty index 82.7 76.5 82.2 72.8 76.0 71.1 74.5 74.7 71.1 66.3 59.4 61.4Complaints index 71.7 67.0 69.9 66.0 72.7 62.4 68.2 61.2 62.4 59.4 61.1 57.1

R e t a i l

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S e r v i c e s

R e t a i l - o o d

F i n a n c e

- i n s u r a n c e

A u t o m o t i v e

F i n a n c e

- b a n k s

L e i s u r e &

t o u r i s m

G o v e r n m e n t

T r a n s p o r t

T e l e c o m s

U t i l i t i e s

L o c a l

g o v e r n m e n t

UK CSI Overview

work, with 53 per cent o those sayingthey nd it hard to concentrate on their job. 48 per cent o people have littleor no motivation and 35 per cent eelirritable and moody. More than 39 percent o people argue with their partnerbecause they are so tired . The e ectsor companies stemming rom this onechange alone are multi old. Consumerswith less time, less attention span andpotentially reduced rationality do not

behave as economic models woulddictate.Compounding these socialconsumer trends is one that businesshas yet to pay due attention to but onethat will increasingly shape the U.Kconsumer. A minimum o twelve Britishtowns and cities will have no singleethnic group in a majority within thenext 30 years. Leicester will becomethe rst super-diverse city in 2020,

then Birmingham in 2024, ollowed bySlough and Luton. .Leicester has seen the proportion o

its white population decrease rom 70.1

per cent in 1991 to 59.5 per cent today. By2016 the white population will make up52.2 per cent o the population, alling to44.5 per cent by 2026.

Britain is becoming increasinglydiverse, not just as a whole but within theimmigrant population itsel . Individualcities are experiencing di erent rates,rom di ering regions and together thiscreates a complex challenge or thoseresponsible or success ully managing

the countrys changing population. It alsocreates a challenge or those responsibleor tailoring goods and services, not onlyin their targeting o the customer, butalso the means o communicating withthat segment or person.

David Smith is chie

executive o the highly

regarded Global Futures

and Foresight group. Heis the author o all the

ollowing industry sectorguides in The Forecast


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industry. A Strategic Insight reportsuggests that as investors seekgreater transparency, the mutualunds industry looks set to bene t.Despite lower sales and a ight tosa ety in the near-term, the globalnancial crisis is an opportunity orthe many bene ts o mutual unds -including transparency, liquidity anddiversi cation - to become even moreaccepted worldwide, says the report.

Impending recession complicatesmatters but the need or new nancialproducts and o renewed growth circa2010 will give impetus to the sector.

The bigger issue is how theyundamentally reconnect with people.Research (November 2007) under-taken by Fujitsu Services into theexperiences o retail nancial servicescustomers across Europe suggests

points to potential starting points.The issue o technical support isunsurprisingly important to manyconsumers. 65 per cent said that theynow pre er online, with ace-to- acecontact in a branch (53 per cent) a closesecond. Call centre contact over thephone was third choice at 43per cent. Indeed automatedservices were ound toactually inspire loyalty - 37per cent o all respondentssaid that a good

Financia l Serv ices 08

A s the industry segmentwidely blamed or the creditcrisis and impending reces-sion, the nancial services sector isundergoing creative destruction on

an almost industry wide scale. Thequick- re sales or else destructiono several prominent US institutionshave reshaped the global nanciallandscape. The lack o trust alreadyembedded in U.K consumers relat-ing to security o in ormation andadditional charges levied by banks isbeing compounded.

Research rom a September 2008

survey by Mintel nds that (whilst astill low) 25 per cent o adults say theytrust NS&I, only an average o 16 percent trust high street banks. Comingat a time when banks and insurancecompanies are struggling to adapt tosuccess ully incorporate new ormso technology, the increasing declinein trust represents the single biggestlong term challenge or players thatemerge rom the crunch in the nan-cial services industry. How to assure,build and restore trust requires sucha multi aceted approach rom bothindividual companies and regulatorsthat the length required to do this willprobably last years.

Indeed an October 2008 poll showsthat UK consumers have little aithin the ability o banks and retailers tolook a ter con dential in ormation.

90 per cent say they dont think thepersonal data held by companies iscompletely secure. The poll, by insurerRSA, also ound that 46 per centbelieve banks and retailers are notdoing enough to protect personal data.

In addition, people are becomingincreasingly worried about their data,with 56 per cent o respondents moreconcerned now about identity raud

and the security o their personalin ormation than they were six monthsago. Dissatis action with the current

banking system is a major reasonbehind the rise o social lending rmslike Zopa. Zopa aims to sidestep bankswith its social lending internet-enabled peer-to-peer borrowing

scheme that o ers better interest ratesthan would be ound at a bank. Zopaassesses credit scores, lenders makeo ers and borrowers size up the ratesand enter into legally binding contracts,eBay-like, with their lenders.

Between 2005 and October 2008it acilitated loans worth some 27million between some 200,000 users.At a time when bread and butter

banking is repeatedly predicted tobecome more prominent, it is vital thatbanks concerned appropriate newmethods o lending. To highlight thisneed is the growth o Zopa during thecredit crisis - Zopa says that between July and September an average o3,700 borrowers joined per month,compared to 2,500 a month in theprevious quarter and that lenders are joining at a rate o 500 a month, well uprom previous standards o 300. In theU.S, peer-to-peer lending through sitessuch as Prosper, Loanio and LendingClub are orecast to top $5 billion a yearby 2010, up rom $282 million in 2006.

It would be easy to be pessimisticabout the uture o nancial servicesgiven the rise o new orms o serviceand the current shakedownand subsequent govern-

ment interventions.Indeed there willbe winners in the

Regaining customer trust the new imperative asthe sector turns to customer retention strategies

Financial Services

sponsored by


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There is evidencethat bank nationalisations will restore sometrust. Mintel concludes that UK consumers

eel moresecure putting their money ingovernment runby banks

Pro essionalism 76.5 82.0 86.9 78.0 76.1 76.6 77.3 76.6 75.6 76.5 75.6Quali ty & Efciency 72.8 80.0 73.1 77.3 76.4 72.9 72.7 72.9 72.7 71.7 70.6Ease o doing business 74.6 80.5 77.0 76.9 76.1 75.4 75.1 75.0 74.6 74.1 72.9Problem solving 71.7 79.9 75.2 72.7 73.5 73.5 71.5 72.8 70.8 71.3 70.2Timeliness 70.9 80.7 73.8 69.1 73.2 69.9 71.8 71.4 71.4 69.8 70.9CSI 73.9 80.8 76.0 75.8 75.4 74.3 74.3 74.2 73.4 73.2 72.6Loyalty index 71.1 75.9 74.0 78.2 73.9 69.4 73.5 71.1 69.8 68.9 68.1

F i n a n c e -

b a n k s

f r s t d i r e c t

R B S

N a t i o n w i d e

A l l i a n c e &

L e i c e s t e r

B a n k o

S c o t l a n d

L l o y d s T S B

H S B C H a l i a x

N a t w e s t

B a r c l a y s

Financia l Serv ices 09

consumer project, undertaken byAegon, highlights advice conceptsthat appeal to consumers.

Helping customers to help them-selves through impartial in ormation isone area that should be looked at - possi-bly through a created role o inancialguru: an independent expert providingholistic and personalised advice, whois not solely selling products. Otheradvice includes the introduction o

drop in centres where the providero ers services or people with speci icproblems and a personal shopper whosimpli ies the choices available.

There is evidence that the recentbank nationalisation will restorea certain degree o trust. Mintelconcludes that British consumers eelmore secure putting their money intoinstitutions backed by the Govern-

ment rather than privately-run banks.Together with improved regulatorystandards, better knowledge o and useo technology and an attempt to satis yconsumers wishes, this should enablethe industry to restore some essentialconsumer trust and con dence.

Pro essionalism 76.5 83.1 86.9 78.1 78.2 76.7 74.4 77.2 76.8 75.0 73.1Qualit y & Efciency 75.7 85.8 79.3 79.2 77.8 77.5 76.8 75.9 76.9 73.8 73.6Ease o doing business 76.0 84.9 81.4 78.8 76.6 78.1 77.2 77.2 76.2 74.8 71.5Problem solving 74.3 85.5 74.9 78.8 76.7 76.7 77.2 75.3 76.4 72.6 69.8Timeliness 75.1 84.6 78.2 78.8 76.8 77.2 77.0 77.5 76.4 70.5 71.9CSI 75.5 84.7 78.8 78.7 77.4 77.3 76.7 76.5 76.5 73.9 72.3

Loyalty index 72.8 84.8 77.8 77.3 76.5 76.8 73.2 72.8 73.1 77.7 68.1

F i n a n c e -

i n s u r a n c e

S a g a

T e s c o P e r s o n a l

F i n a n c e

C h u r c h i l l

Z u r i c h A A

E s u r e

D i r e c t L i n e

A X A

P o s t O c e

A d m i r a l

experience o automated services wasmost important, with less than hal thatnumber (18 per cent) citing security opersonal details as the primary actor.

While customers placed value ormoney (43 per cent) and customerservice (41 per cent) at the top o theirwish lists in characteristics o a bank,industry providers were ound tobelieve that the range o products and the number o products that the

customer has with one provider hasthe biggest impact on their customersloyalty. Consumers strongly disagree;indeed the range o products scored astheir joint lowest priority (importantor 11 per cent o respondents). Under-standing the core needs and wants othe customer is essential i providersare to regain the trust o consumerswho have ever increasing options avail-

able thanks to the spread o technology.Internet use is o ten used inresearching products, and this anarea where nancial services couldo er advice that would enabletailored products and services whilstalso regaining trust. An 18 month

Finance - Insurance

Finance - Banks

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Q&A Gary Schwar tz 10

Q The nancial services sector is in turmoil Gary. Whatdo you think are the key challenges the sector aces in2009 in terms o its customer strategies?

A The key challenges or the nancial services sectorare maintaining customer relationships in aclimate in which constrained lending stan-dards and lower savings interest rates makeit more di cult to acquire new customers.The net e ect is that as customers leave, itbecomes more di cult to replace them.

That makes investment in customerretention strategies paramount or 2009. Thekey to this is in understanding why customers

leave both on an individual and aggregatebasis. One can create a compelling ROI modelbased on seeking customer complaints. I mention seekingcomplaints because research by TARP shows that only 2%o people proactively complain to a company whos providedpoor service. Instead they reduce spend or close accounts,while telling their riends, amily and colleagues.

I a large segment o a customer base is dissatis ed, we canmonetise the value o keeping their business and comparethat to the cost o a eedback management program thatalerts the details o dissatis ed customers into the businessso that they can be recaptured and saved. The ROI can besigni cant. A relatively small spend can bring a large return.Q Latest Forrester research suggests UK banks receivethe lowest customer advocacy scores in Europe. How canthe sector begin to regain the trust o its customers?A Trust begins with proper setting o expectations andthen meeting or exceeding those expectations. Bankswork hard to set customer expectations, but in order toproperly measure the success o those initiatives they needto ask their customers whether theyve succeeded. I they

havent, then they need to act on customer complaints, atan operational level with each disa ected customer, andat a systematic level when aggregate customer opinionindicates that they need to modi y processes.

The trust comes rom communicating back to custom-ers that theyve heard and are acting on the eedback.Research by Gartner indicates that while as many as 95%o companies collect eedback rom customers, only 10%act on that eedback while merely 5% bother to tell theircustomers that theyve done anything with that eedback.

Becoming part o that elite 5% is the opportunity orFinancial Services providers to di erentiate themselves onthe basis o service quality and trust relationships.

Q Where does the FSAs Treating Customers Fairlycompliance initiative t into all o this?A The TCF initiative mandates that nancial services insti-

tutions create a process to manage customer complaints andthat they can demonstrate that they ollow theprocess. It encourages FS providers to considerin a programmatic way how they treat theircustomers and to consider retention as animportant strategic business issue. I recentlyattended a meeting at a well-known high streetbank at which a member o the retail boardstated that or the rst time theyre consider-ing customer retention at board level. TCF,

combined with the current economic climate,must have had an impact on that thinking.Q In terms o retention and acquisition strategieswhere do you think customer service will be positionedas a key di erentiator?A Lets take a look at car insurance. The industry hasconditioned us to demand the best price possible orinsurance. Comparison sites abound, and we all rememberthe amous Quote me happy ad campaign rom NorwichUnion. Two things about that:

First, the happiness stops on the initial quote. Ive neverreceived a renewal quote that was competitive with a quoterom a new insurer. So insurers arent conditioning us to belong term customers. That cant be good or business.

Second, theres extremely little i any di erentiationon the basis o service. I think this is the opportunityor insurers going orward. A personal story last year Irenewed with my current insurer or the rst time in years.They were more expensive, so why that decision?

Simple it was based on product/service di erentiation.My wi e and I have young children, and my insurer was the

only one who allowed speci ication o a 4-door car as a cour-tesy car while our car was in or repairs. We hope not to evenneed that eature!! But it was the singular reason I chose topay more. Fortunately, their customer service is also excellent.

The opportunity to di erentiate on service exists whenan insurer solicits eedback a ter, or example, a customersclaim.

I they can learn about a poor experience with theclaims department or the repair, they have more time to xthe problem and the customers attitude be ore renewal.

And i they do so, theyll have a much better customerexperience upon which to re ect be ore they leave or thenext company that quotes them happy.

Q&A special Gary Schwartz, ConfrmitThe key challenge or the nancial services sector is maintaining customerrelationships in a climate where it is more difcult to acquire new customers

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Q&A Gary Schwar tz 11

Q Whats your take on the recent Gartner and Aberdeenresearch into customer eedback in the sector?Gartner reported in November that Feedback Manage-ment technologies will be the top investment made in2009 to improve the customer experience (please seeattached press release). Aberdeens research indicatesthat in a year in which overall IT spend will decrease,spend on Feedback Management technologies willincrease. In act, Aberdeen demonstrates that thosecompanies who are best in class with regard to imple-mentation o eedback management strategies nd a

26% increase in customer satis action. More importantly,they are 26 times more likely to increase customer reten-tion as compared to those classi ed as laggards

The research indicates that enterprises take very seri-ously the concept that actionable customer eedback canmake a signi cant impact on business prospects and meritspend even in a down economy. Further, they indicate thatcustomer retention is the ocus or this potentially verydi erent economic climate.Q Looking into your crystal ball Gary where do you

think nancial services and its customer strategies willbe a year rom now?A From the FSA website: By the end o December 2008,all rms are expected to be able to demonstrate to usand to themselves that they are consistently treatingtheir customers airly and delivering against all the TCFoutcomes relevant to their business.

This section provides materials, which will help rmsto think about what they need to do to meet the Decemberdeadline. They will have to:1. Demonstrate that senior management have instilled a

culture within the rm whereby they understand what the air treatment o customers means; where they expect their staf to achieve this at all times; and where (arelatively small number o ) errors are promptly ound by rms, put right and learned rom;

2. Be appropriately and accurately measuring per ormanceagainst all customer airness issues materially relevant totheir business, and be acting on the results;

3. Be demonstrating through those measures that they are delivering air outcomes; and

4. Have no serious ailings whether seenthrough management in ormation (MI)or known to us directly including inareas o particular regulatory interest previously publicised by the FSA.

In our experience many nancial servicesproviders are using eedback managementtechnology to assist them in meeting thestandards set by the FSA. I they can success ullydemonstrate that they adhere to these standards

they will nd an increased trust relationship betweenthemselves and their customers, and more enduringcustomer relationships. I'm optimistic.

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Uti l i t ies 12

A verage monthly energybills have risen by 110per cent since 2003/04.Furthermore the domestic sector

was responsible or 27 percent o UKcarbon dioxide emissions in 2005whilst energy demand in the sectorgrew 17.5 percent rom 1990 to 2003.

Within this time rame climatechange has become a major concern,solidi ed by the Stern Report, andby the government commitment toa 60 per cent (possibly rising to 80per cent) cut in greenhouse gases by

the middle o the century. A BBC pollshows that 70 per cent o UK consum-ers believe that major steps must betaken very soon to avert catastrophewhilst only 3 per cent believe that noaction is necessary.

The interplay between economicsand the environment has at times beena contentious one. Price sensitivityhas been shown to be an issue in retailpatterns to a degree it could be arguedthat the economic downturn is indeedhaving a clear impact on ethical choices.This interplay will undoubtedly shapepublic thought with regards to theuture o utility provision.

The overall sentiment has beentowards nuclear and renewables inrecent years. In 2005, 58 per cento the public wanted a reduction innuclear generating capacity, yet the

gure had dropped to 38 per cent by2007. Concern or the environmentis one obvious actor in the shi t, asis concerns over the continuity oenergy supplies. 66 per cent cited thisas a concern, ostensibly ollowing thegeo-politicisation o gas by Russia incon icts with its neighbours.

At the same time many morepeople than be ore (42 per cent)

believe nuclear is a sa e source oenergy. However, the one consumerconcern running counter to this is cost

based. Be ore the credit crunch hadevolved into a direct threat to the realeconomy 44 per cent said they werentprepared to pay a single penny more

or green energy in the same KPMGsurvey. Green, and increasinglynuclear, are broadly supported but notnecessarily at any cost.

Constant price rises that saw energybills increase by 32 per cent in 2006alone and 38 per cent in 2008 have nodoubt reduced any public acceptance oany urther rises associated with cleanenergy. That is not to say that the

consumer is powerless however;as in many other markets, theinternet is being used to savemoney. 51 per cent o house-holds say that they havechanged their utility supplierat least once, making savingso some 1.7 billion. uSwitchestimates that anotherchange in supplier could revealurther savings in the regiono 1 billion. It also reveals thatcost savings are not the sole reasonbehind consumers switching providers- 9 per cent said they switched becauseo poor customer service with theirutility provider. Indeed, poor customerservice is a widely reported problemwithin the industry.

A September 2008 survey byWhich? ound that ve o the big six

energy companies posted customersatis action scores below 50 percent. Two primary reasons concernmistakes with billing and poorchannels through which to contactsta . Indeed, data gathered bymoneysupermarket ound that 17 percent o people in the UK have receiveda utility bill with an error on it in thelast three months, and that only 50

per cent check their bills as directdebit becomes increasingly popular.

Medium term uture orecasts all

The sector will ace growing pressure to reduceits prices likely to be resisted - while customersatis action is running at an all time low

Utilities

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Uti l i t ies 13

Pro essionalism 76.5 72.7 86.9 70.0 68.5 67.5 64.0 60.8Quality & Efciency 62.4 69.0 67.2 64.0 65.5 64.3 59.1 55.9Ease o doing business 65.3 71.8 70.0 69.0 67.5 67.2 62.5 58.4Problem solving 63.2 69.8 68.5 71.2 65.1 66.2 59.6 56.3Timeliness 63.7 69.9 67.4 72.2 66.2 65.7 60.6 57.8CSI 64.4 70.7 68.9 68.5 66.9 66.2 61.4 57.9Loyalty index 59.4 68.5 65.8 69.2 61.1 62.4 55.3 50.0

U t i l i t i e s

S c o t t i s h a n d

S o u t h e r n E n e r g y

E D F E n e r g y

N o r t h e r n

I r e l a n d E l e c t r i c i t y

S c o t t i s h

P o w e r

E . O N

B r i t i s h G a s

n p o w e r / R W E

Utilities

There seems to be a worrying degreeo apathy among consumers to reduceenergy consumption, despite dailyheadlines about rising uel bills, saysSimon Harvey o Ernst & Young.

A YouGov poll conducted on behalo Ernst & Young echoes his senti-ment. 50 per cent o British consum-ers were ound to be unprepared toreduce their energy consumption,even i their bill was to go up by 200

or more over a year. The poll alsorevealed that just over two-thirdso consumers arent prepared to payanything more or their energy bills tocombat climate change.

Such sentiment will almostcertainly have to change to avoidurther contraction in consumerspending, or at an extreme, to avoiduel poverty- the heat or eat scenario.

The latest o cial gures show that3.5 million households in the UKwere in uel poverty in 2006, butthat gure is thought to have risen toaround 5 million.

Further increases in uel povertylook inevitable given the mediumterm increases orecast and reducedconsumer spending. It is unlikelygiven the government's commit-ment to green energy that consumersentiment will trump the market andits high prices indeed consumerswill increasingly have to adapt theirbehaviour to meet the market.

indicate rising prices throughout theutilities sector. Water bills will increaseeven aster than expected over thenext ve years due to the credit crunchraising borrowing costs or companiesneeding to raise the 27bn o invest-ment they need. The projected rise inenergy bills is the real concern though.

At a time when consumer energyprices are already rising, a newreport rom Ernst & Young - Costing

the earth? - has estimated that thetypical UK domestic energy bill willneed to increase by an additional 20per cent, and probably more, to payor the cost o meeting the EUs 2020emissions targets.

This will lead to a total annual costo 5.3bn to UK consumers in 2020.The 20 per cent rise is the minimumadditional contribution each domestic

household will have to make throughtheir energy bill, to und the 100bnplus capital investment required or theUK to meet emissions reduction andrenewable energy targets or 2020.

Indeed consumers ace a triado increased utility bills. Long termrising uel and oil prices, the costso climate change mitigation, andin addition, investment required tobecome more energy e cient - orexample by insulating the home.However, the average consumer doesnot appear to realise that this addi-tional cost is going to hit their wallets.

Further increases in uel poverty look inevitablegiven the mediumterm orecasts and reduced consumer spending. It is

unlikely that giventhe governement's commitment togreen energy that that consumer sentiment will trump the market

and its high prices

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It is likely that the recent alls in crude oil prices will be mirrored by downward pricemovements in the gas and electricity markets as the recession bites harder

Q&A special Mike Porter, Vertex

Q&A Mike Porter 14

Q What do you think are the key customer strategy chal-lenges or 2009 and beyond acing the energy sector Mike?A Its likely that the recent alls in crude oil prices will be

mirrored by downward price movements in the gas andelectricity markets as the recession bites.Energy suppliers will come under increasingpolitical and media pressure to pass reduc-tions on, so I think that the main ocus orbusinesses will centre on the twin issues ocustomer acquisition and retention.

This will inevitably mean that the qualityo customer service provision will matter morethan ever be ore i an energy business is to

sa eguard its existing consumer base whileattracting and retaining new customers.Q What are the key customer strategy challenges or 2009and beyond or the water sector?A I think that the overriding priority or water companies isto tell a better story to their customers about the quality andvalue or money o the service they provide. A ter all, theaverage UK consumer pays just 90p per day or clean andwaste water supply and service. I think customers and themedia - would think this was good value or money i onlythe sector delivered their message across in a better way.

This should be part o a more holistic shi t that watercompanies need to take. They need to learn rom othermarkets about how to better engage proactively with theircustomers. This could improve the chance that uture priceincreases to pay or service improvements receives a morepositive response rom customers.

Q The energy sector has been accused o being quick toincrease prices to consumers and slow to decrease them.Do you think that this criticism is air?A The position adopted by the Energy Retail Association

that lower prices lag behind alls in energy wholesalecosts because o orward purchasing is a plausible one,but its an argument that cuts little ice with consumers orthe media. Why? Its an issue o trust and perception; ewenergy companies have been really success ul in buildingcustomer loyalty and advocacy, so there is little goodwill inthe bank to draw on. Neither is there much transparencyaround costs or di erent customer segments, particularlythe premium that Pre-Payment customers have to pay ortheir energy. Yet it is much easier to contrast this with the

current high pro tability o energy suppliers. Make an e ortto establish greater customer loyalty and advocacy, and itcould be easier or suppliers to de ect criticism in this area.

Q What will be the impact o smart metering on theenergy sector?A I you accept that the advent o smart metering will

ultimately assist customers to make better choices aboutenergy usage, it will trans orm the businessmodel o all energy suppliers. Driven by theneed to replace margin, its likely to be the spurthat sees them evolve into broader energyservices businesses selling a mix o productsthat use energy more e ciently. As impor-tantly, the switch to smart metering acrossthe next eleven years almost certainly meansthat energy companies will need to replace

obsolete internal billing systems as customersare migrated to new meters that are moreexible in terms o tari support and a wider port olio ogoods and services.Q With the water companies still in e ect in a monopolysituation, what can they do in terms o creativity andinnovation in their customer strategies?A They should look beyond their sector to discover howother markets and other businesses have embracedcreativity and innovation to maximise customer advocacy.As Ive already mentioned, the UKs water service is a realbargain yet the vast majority o customers have absolutelyno recognition o this act. I you probe a little deeper, watercustomers really arent that demanding; what they wantis predictability o service. When they call their waterprovider, its usually about either their bill, or i theyvemoved, or some issue to do with their supply. They wanttheir call answered promptly, and they want their queryresolved in one call wherever possible.Q What single winning strategy should organisations inthe utility sector implement to gain competitive customer

advantage in 2009?A Front line customer service agents should be given thetools, techniques, technology, and the empowerment toensure that they can e ectively deliver the level o servicethat consumers experience and expect rom virtuallyevery other market sector they engage with.

The quality o data and the operating systems deployedby many utilities businesses remains poor, and its o tenyears i not decades out o date when compared to otherindustries. The reality is that customers notice this di er-

ence, and they already think that theyre paying enough orthis not to be the case. Theres a real opportunity or pioneersin the sector to grasp this and move things orward.

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Transport

16

U nsurprisingly, given thevolatile price o oil thatpeaked at historical levelsduring the summer, one o the major

challenges or public transport orconsumers is cost. One e ect o highoil prices a icting airlines as well asmotorists, analysts pointed to therelatively cheap and environmentallyriendly option o the train. However,two major consumer gripes, surround-ing overcrowding and above in ationprice increases are set to intensi y.

In the past decade passenger

numbers have grown by 45 per centand the amount o reight carried bytrains has grown by 60 per cent. Butconstraints on the capacity o thenetwork have meant that the numbero trains has risen by only about 20per cent. In October the NationalAudit O ce warned that overcrowd-ing on Londons services is going toget worse despite increases in ticketprices, at least in the medium term.A new 10billion capacity-boostingprogramme , comprising an extra1,300 carriages and longer plat ormsis set or completion around 2014.

Until then consumers can expectanything up to a 42 per cent rise inticket prices. By law train companiescan raise regulated ares by in ationplus one per cent, based on the RPI in July, which was 5.3per cent this year.

They also have a two per cent leewayto increase some ares by more sosome tickets could go up by more thaneight per cent. Fares on Southeastern,which serves London could even see

rises o around 10 per cent in 2009.Rises in non-regulated ares have

been hovering around the six to sevenper cent mark on average in previous

years, according to the National AuditO ce. Rising prices, overcrowdingand delays conspire to what CommonsPublic Accounts Committee chairmanEdward Leigh says is still too o tenan unpleasant experience. Evenso it is an experience that does notcome cheap - a survey o train pricesacross Europe ound the cost o atypical long-distance rail journey

in Britain worked out at 55p a mile,compared with 17p a mile in Franceand Germany, 16p a mile in Spain and just 11p a mile in Italy. FurthermoreBritons spend 15 per cent o dispos-able income on transport. O that, 3.8per cent is on ares. Both fgures areroughly double the average o the

quartet o continental European coun-tries a orementioned. These statisticsare mirrored in consumer opinion; 86per cent believe that public transportcosts are either High or Very High.

This doesnt mean that consumerswill or can avoid train travel and otherorms o public transport, particularlyin the cities and when other optionsare more expensive still. For examplea YouGov poll, commissioned by

National Express, shows that 60 percent o people who drive or use a carare considering using public transportowing to high uel prices at the pump.

The fgure might be higher still i itwasnt or perceived danger in usingtransport services. According to theDepartment o Transport, 11.5 percent more journeys would be made bypublic (instead o private) transport i

people elt sa er. Investment in publictransport has indeed been high,which has massively increased thenumber o public transport options.

Subsidising buses, has or example,resulted in the U.K being home to aquarter o all the buses in Europe with105,000. They are however reckoned

Above in ation price rises will have to be counteredwith improved services, less overcrowding andcustomer ocus

Transp rt


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Transport

17

to be 35 per cent less productive than20 years ago because o limited use.Indeed Britain spends 2.5bn o publicmoney on bus services, but excludingLondon, councils have little say inwhat or how services are provided.Bus operators are ree to set the ares,routes and vehicle. Analysts believethis needs to change i we are to getvalue or money in return or publicinvestment and provide the stability,

reliability and a ordability that isneeded to turn around decades odeclining bus use.

National Express orecasts that by2020 travel within the UK is orecast toincrease by a urther 19 per cent. Theneed or the majority o this to be viapublic transport is pressing when oneconsiders the Climate Change Bill; theU.K is committed to CO2 reduction o 20

per cent below 1990 levels by 2010 anda 60 per cent reduction by 2050.Even though road transport

accounts or about 84 per cent oCO2 emissions rom transport, airtravel has attracted ar more mediaattention. By 2020 aviation will becontributing 10 per cent o the UKscarbon dioxide emissions, whilst

expansion plans have been mootedor Londons Stansted, Heathrow andCity airports. Current EUROCONTROLlong-term growth orecasts thatthe number o ights per year in UKairspace could increase by between50 per cent and 90 per cent by 2025,indicating heightened consumer andcommercial demand. As much public-ity as it attracts however, the issue ocarbon is overwhelmingly one o road

transportation.Second generation bio uels might

help reduce the impact o automotivesmajority share o Co2 emissions butwith ever increasing road congestion,the consumer will become ever morereceptive to public transport shouldit meet certain criteria. A ordability,punctuality and an adequate provisiono services are needed to ensure this.

Signs o this emerging do exist;the UK transport system is graduallyintroducing new technologies orexample. Although transport ICTexpenditure is low in comparison toother public sector areas, the rate oincrease is high. Total ICT expenditureis orecast at 10 per cent per annum,reaching 1.2bn by 2009/10.

Pro essionalism 76.5 81.4 86.9 78.8 74.8 73.4 74.3 72.6 64.2 67.0 64.3Quality & Efciency 68.7 79.0 78.1 74.0 75.8 74.2 75.5 68.1 66.3 60.4 61.4Ease o doing business 70.5 79.9 80.0 77.7 77.1 74.5 74.1 71.7 65.5 65.4 64.1Problem solving 67.6 76.2 78.4 74.0 77.3 73.5 69.9 68.5 61.5 62.6 60.8Timeliness 68.6 78.2 80.4 75.2 74.6 73.4 72.3 70.9 64.7 63.7 60.3CSI 69.7 79.4 79.2 76.4 75.7 73.9 73.8 70.7 64.7 64.5 62.8Loyalty index 71.1 81.3 81.4 75.7 77.1 78.9 76.5 70.4 66.2 65.9 63.7

T r a n s p o r t

V i r g i n A t l a n t i c

E u r o t u n n e l

B r i t i s h A i r w a y s

B r i t t a n y

F e r r i e s

N a t i o n a l

E x p r e s s

E a s y j e t

V i r g i n T r a i n s

R y a n a i r

F i r s t G r o u p -

r a i l c o m p a n i e s

S t a g e c o a c h

Transport

A survey o train

prices across Europe ound thecost o a typical long-distance rail journey in the UK worked out at 55pa mile. compared with 17p a milein France and Germany, 16p amile in Spain and just 11p a mile inItaly


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Retai l

18

The lack o consumer spending power will urtherdecimate the sector with online growthbeneftting rom low cost and green credentials

R tail

U K consumer spending powerhas allen substantially due toa large rise in the cost o living,research by Ernst & Young suggests.

Results rom the Annual Discretion-ary Income Study reveal the averagehousehold is 15 per cent worse o thanit was fve years ago. A ter householdbills and tax, it ound the typical amilyhad less than 20 per cent o its grossincome remaining - compared with 28per cent in 2003. In monetary termsthis equates to 772.79, comparedwith 909.84 in 2003. With necessi-

ties such as transport, housing andutilities all largely fxed to a certainpoint in their cost, retail is emergingas a victim o the en orced cutbacks inspending. Signs o impaired consumerspending appeared be ore thefnancial turmoil o the late summer.For example department store chain John Lewis announced that saleswere down 8.3 per cent during theweek to 28 June compared with thesame week last year, with home andelectrical goods seeing the largest alls.At the same time Marks and Spencersimilarly reported a 5.3 per cent dropin like- or-like UK sales in the priorthree months. Indeed Stuart Rosebelieves consumer spendingwill remain pressured or twoyears. Electrical FMCG DSG,owner o Currys, Dixons

and PC World or examplereported its like- or-like saleswere down seven per cent inthe 24 weeks to 18 October withcomputer sales alling 11 per cent.

Recession is ar rom systemichowever, as evidence is emergingo price sensitivity in the ood retailsector that is driving increased tra cat discount stores. Overall the amount

o ood and drink bought in super-markets and other stores ell 0.1 percent in the three months rom June to

September compared with the sameperiod last year.

However Aldi has registered 20 percent growth and Lidl and Netto have

also reported promising fgures, withalmost a third o Britons changing todiscount stores. The shi t towardsthri t is urther illustrated in thosethat havent traded down in terms olocation, a new G K NOP survey ound42 per cent have changed to buyingsupermarket own brands rather thanbranded goods. Premium sectorswithin the grocery market are also

showing signs o slowdown.The UK has the third largest marketor organic ood and drink in Europewith total sales worth 1.9bn in 2007.Sales are expected to slow to 5 percent growth this year, well ahead othe industry average o 1-2 per centbut ar below the 30 per cent growthregistered in previous years.

Well established changes are setto deepen, in particular, the role othe internet is set to expand. Theaccentuation o this which is to beexpected during recessionary times

does not bode well or companies whostill largely rely on a physical pres-ence. Retailers in the U.K expect 22.4per cent o turnover by 2012-15 to bevia internet sales. Even i purchasesremain predominantly in-store,especially with uture technologicaladditions, the contribution o theinternet shouldnt be dismissed. 45.3per cent o consumers are thought tocarry out pre-purchase research using

the Internet and this is expected to riseto 71.3 per cent by 2012-15.

The number o internet shoppers isunsurprisingly at an all time high withonline spending growing at its astestrate or six years. In 2007, online spend-ing by consumers on retail purchasestotalled 14.7 billion, an increase o35 per cent. Importantly this growthrate was almost 10 times higher than

that experienced by the total UK retailmarket at this time, indicating increas-ing consumer awareness o price andconvenience o ered online.

Analysts orecast strong onlinegrowth is set to continue reaching44.9 billion by 2012. The breakdowno online activity is also telling; theelectricals and ood and grocerysegments made up just under hal oall online retail spending in 2007, withelectricals accounting or a majority25.1 per cent share. However, with aaster online growth rate in 2007


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Reta i l

19

orms o packaging provided or conve-nience purposes i it would beneftthe environment. The poll o Internetrespondents rom 48 nations showedthat waste ul ood packaging is amongthe astest-growing environmentalconcerns or shoppers worldwide withmost consumers willing to cut back.

A study by Mintel backs Nielsensfndings urther. British consumers,it says, are more interested in seeing

recycling in ormation on ood labelsthan at, sugar and calorie in orma-tion. 84 per cent o respondentssaying they are now looking atrecycling details.

With the economy souring andthe habit o shopping on the internetalready ingrained in price consciousconsumers, the internet may have aneven more central role to play in uture

retail. Recession may well ensure pricebecoming more important than ever.For that reason alone and or the envi-ronmental consciousness increasinglyestablished in the public, packagingand other environmental issues willcontinue to shape the industry as goinggreen benefts the bottom line.

Pro essionali sm 76.5 86.9 86.9 77.2 75.8 74.7 74.4 72.6 71.6 70.3 71.6Qualit y & Efciency 78.5 83.4 84.0 81.9 77.1 78.4 79.6 76.8 81.1 80.1 70.9Ease o doing business 77.3 85.8 86.1 79.0 78.3 77.2 73.8 76.6 73.1 74.3 70.4Problem solving 74.1 83.4 85.0 75.8 74.7 72.7 77.8 72.0 72.5 73.9 69.7Timeliness 73.7 83.6 81.8 75.4 73.2 71.6 75.2 72.9 71.8 72.7 67.1CSI 76.1 85.2 84.6 78.4 76.3 75.7 75.4 74.5 74.1 74.1 70.6Loyalty index 82.2 89.4 91.6 84.3 81.5 82.9 83.0 80.3 86.2 83.7 74.8

R e t a i l - o o d

W a i t r o s e

M a r k s &

S p e n c e r

A S D A

S a i n s b u r y s

M o r r i s o n s

A l d i T e s c o

L i d l I c e l a n d

C o - o p

Pro essionalism 76.5 88.6 86.9 84.6 83.4 79.3 76.0 78.9 75.6 77.9 75.3Quality & Efciency 79.4 88.0 84.8 84.2 82.7 79.1 82.1 76.5 81.6 78.0 80.0Ease o doing business 78.7 89.2 86.0 85.5 83.0 82.8 77.5 79.6 78.8 78.9 78.7Problem solving 75.5 87.3 84.0 83.8 80.1 80.6 76.8 77.2 76.3 74.7 75.1Timeliness 74.1 88.1 80.8 82.1 79.6 80.7 76.1 74.6 73.3 74.5 74.0

CSI 77.4 88.4 85.3 84.4 82.5 80.4 77.9 77.9 77.6 77.5 77.0Loyalty index 82.7 92.1 88.1 90.6 87.1 81.6 86.1 89.9 86.1 83.0 82.1

R e t a i l -

n o n - o o d

J o h n L e w i s

L l o y d s

P h a r m a c y

B o o t s

M a r k s &

S p e n c e r

H M V

S u p e r d r u g I k e a

D e b e n h a m s

A r g o s

Retail - Non Food

Retail - Food

D o r o t h y P e r k i n s / T o p S h o p /

E v a n s / M i s s S e l r i d g e

and much lower maturity, the ood andgrocery sector is on course to succeedelectricals as the top seller, with ashare o 29 per cent o all online salesin 2012 compared to 22 per cent orelectrical. Online sales will quadrupleto 162bn by 2020.

Part o the increase in spend isundoubtedly associated with valueavailable on online goods. Averageonline savings average 13 per cent on

grocery items, 21 per cent on servicesand 15 per cent on travel and leisureactivities. It is estimated that UKconsumers could save as much as13bn annually by shopping online which equates to a 500 saving perhousehold. The advent o recession isalready witnessing increasing hits onprice comparison sites and is likely toaccelerate this trend in the short term.

Despite the overwhelming in uenceeconomic and technological trendsare imparting upon the industry, theenvironment is another actor thatretailers should increasingly consider.According to a Nielsen Global FoodPackaging survey, nearly one in twoglobal consumers would give up all

Well establshed changes are set to continue, inparticular the roleo the internet is set to expand.The accelerating trend in this timeo recession does not bode well or companies whostill rely largely on aphysical presence


22/36

Leisure & Tourism

20

A s the world ages, amilystructures change, andrising individual a uencecreates an increasing demand or

personalisation, the expectations anduse o tourism are changing at a rapidrate. Overseas travel grew rom 25million tourists in 1950 to 803 millionin 2005, and by 2030 it is estimatedthat there will be 1.9 billion interna-tional travellers spending US $2 tril-lion. US $5 billion will be spent everyday by tourists, with US$2 billionbeing spent in Europe and US$1.5

billion in Asia. Cost and consumersincreasing desire or new experienceswill shi t tourism consumption evereastward, and by 2030 no part o theglobe will remain untouched.

One o the largest consumer-ledchanges will be the ageing o Britishsociety. By 2030, almost 50 per cento the worlds population will be over50, and this cohort will hold 75 percent o the UKs wealth. The contin-ued rise o international tourismcombined with increasing percent-ages o baby boomer held wealthprovides immense challenges andopportunities to those in the industry.

Major technological, logistical andin rastructural adaptations will needto be incorporated in order to handlethis demographic shi t. The industrywill also need to adjust its mediums o

communication in order to e ectivelyengage these consumers. Anotherconsideration is the restructuringo amilies rom being horizontal tovertical, with Brits having ewerchildren, but also being more inclinedto go on multigenerational holidays.Destinations will need to be able toaccommodate all ages i they are toretain broad appeal.

In the adoption o 24/7 culture theboundaries between play and workhave become increasingly blurred.

I this trend accentuates urther, alikely outcome is or people to takemore breaks o shorter duration, asthey juggle demanding work and

schedules. I improvements in trans-portation evolve swi tly, this maylittle alter present tourism patternson its own, but i the social trendoutpaces the rate o technology thereis the potential or a realignment othe industry, with local and regionalmarkets set to beneft assuming theiro ering is in line with demand.

According to the World o Travel

study conducted in 2006, tourismwill shi t to being more experience-driven, with a desire to do ratherthan have which will coincide withthe doubling o consumers ying. Theexperience economy will ragment thetravel and tourism industry, accen-tuating some o its niche segments.Emotional and cultural experiences,such as quality time with amily, or anauthentic experience with di erentcultures will be the new luxury.

As a result, travel companies willneed to reinvent their luxury packagesto being less product-driven and moreocused on the particular desires andpassions o the individual. Providingtrips ull o what money cant buy,that not only ulfls customers on adeeper level but also bypasses thestresses o modern travel, will be a

new niche or luxury travel.Eco-tourism is an increasingly main-

stream example o a hither-to nichesegment that has experienced majorgrowth. Increased media coverage oclimate change and the loss o pristinehabitats worldwide are major catalystsin this market. 5 percent o consumerswill head or sustainable destinationsby 2024, and many will go to places that

protect or beneft the environment.However British travellers are our

times more price sensitive than they

were a year ago, and despite ethicaltourism being ashionable, manyconsumers unashamedly seek outthe lowest prices and cheapest deals.With greater choice come greaterexpectations not only o being able toexpress individual belie s and morals,but also o being able to fnd moreconvenience at a better price.

Another developing segment ismedical tourism, which has seen a

rapid increase due to high medi-cal costs and/or lengthy waitingtimes in core Western markets.Over 50,000 people spending 161million travelled abroad last yearor medical treatments.

In the United States alone it ispredicted that the number o medicaltourists will rise rom750,000 last year to

6 million by 2010,and will reach 10million by 2012.The revenue romthis core marketalone will bring inUS$21 billion annually inour years time. EasternEurope and especiallyAsia will beneft the mostrom medical tourism, withAsia having a compoundannual growth rate o 17.6per cent rom 2007-2012. Thisconsumption o health carewill radically altertourist markets asholiday time iso ten inbuilt intothe package tohelp the patient

recuperate.The

eastward shi to travel andtourism hasmany implica-tions. Consum-ers will desire

Ageing population presents challenges andopportunities with growth in eco-tourism andcustomer demand or personalisation

L is r & T rism


23/36

Leisure & Tourism

21

to travel to places that up until recentlywould not have been considered asdestinations, particularly in the east.This eastward shi t has the potential tonot only create new destinations, but toalso engender cultural clashes. In 1995,long-haul travel accounted or 18 percent o all international trips. By 2020,it will be 24 per cent.

Owing to cultural complexity anddi erences, Western consumers will

increasingly fnd that they may nolonger be the target market at desti-nations. By 2020, China will provideover 100 million outbound tourists.The reorientation o airline travel tothe east could result in a reorganisa-tion in the balance o aviation power,resulting in un oreseen implicationsor hubs such as London, and conse-quently or Western travellers.

The UNs World Tourism Organisa-tion, or UNTWO, summarises thechallenges lying ahead or the industry.Given tourisms importance in theglobal challenges o climate changeand poverty reduction it says, there is aneed to urgently adopt a range o poli-cies which encourages truly sustain-able tourism that re ects a quadruplebottom line o environment, social,economic and climate responsiveness.

Fitting these priorities with thoseo the consumer and their wish orpersonalization, new experiencesand a low cost will determine thewinners and losers in the industry inthe 21st century.

Pro essionalism 76.5 83.6 86.9 83.1 81.7 81.4 77.6 75.8 73.9 74.6 76.4Qualit y & Ef ciency 73.2 82.9 81.6 80.5 81.7 76.2 81 75.3 79.7 72.5 72.6Ease o doing business 73.1 82.2 82.6 82.1 80.3 81.6 76.3 77.5 74.8 78.3 74.3Problem solving 70.6 83.3 80.5 79.8 79.2 80.7 75.1 72.7 75.9 74.4 72.9Timeliness 70.9 82.1 82.1 79.4 79.3 80 76 75.2 75.4 75.4 71.0CSI 72.0 82.9 82.1 81.4 80.8 80 77.9 76 75.9 75.1 74.0Loyalty index 74.5 86.1 83.0 82.8 85.2 78.9 83.9 78.1 77.3 71.2 75.2

L e i s u r e a n d

t o u r i s m

P r e m i e r I n n

H i l t o n M a r r i o t t

y o u r l o c a l

r e s t a u r a n t

S t a r b u c k s

T o b y C a r v e r y

C o s t a C o

ff e e

T r a v e l o d g e

D a v i d L l o y d

L o c a l h e a l t h /

f t n e s s c l u b

Leisure & Tourism

Travel companies will have toreinvent their luxury packages tobeing less product-driven and moreocused on theparticular desires and passions o the individual.Providing trips ull o 'what money can't buy' ul lling customers on adeeper level will bea new niche


24/36

Government

22

W hen Tony Blair le t o ce,60 per cent o votersdid not trust politicians,whilst an October 2008 study puts the

fgure at a startling 97 per cent. Thehollowing out o trust runs concur-rently with a decline in voter turnoutwith a Mori poll suggesting only 39per cent o 18 to 24-year-olds votedin the general election o 2001. Theissue o how to reconnect with votershas drawn heavily on the concept oe-democracy, or e-government.

Indeed, the government has prom-

ised Universal access to high quality,public service content through appro-priate mechanisms or a convergeddigital age. Even so, research hasindicated that only 10.8 per cent o allMPs use social networking sites.

Furthermore the May 2008 datashows that 32.4 per cent o social

networking sites were provided byMPs in marginal seats, yet only 13.6per cent o all seats can be classifedas such. Co-author Dr Lilleker states

that Only a ew MPs are using theirsocial networking site as a strategiccommunication tool to enter intotwo-way dialogue with constituentson local issues o interest such as posto ce closures, and it is no surprisethat it is these sites which have mosttra c. The authors also pointed outthat whilst a close election might seeincreased use o such sites, they are

unlikely to eclipse politicians personalwebsites as the hours needed tomaintain social networks are numer-ous and cannot really be delegated.

Nevertheless, analysts at Gartnerbelieve that social networks willcomplement and in some instancesreplace some government unctions.

Social networks to become more in uentialwith increasing citizen power through greatertransparency and in ormation sharing

P blic S ct rGovernmental divisions and boundar-ies are blurring at every level which isdriving the uptake o social comput-ing as a means o sharing in ormation.

Horizontal business processessuch as fnancial management, HRand procurement are subject toincreased sharing across agenciesand even jurisdictions, resulting in aloss o ownership or control on behalo government agencies and in some

cases, the government itsel .Instead they are becoming clients

to other organisations leading toincreased adoption o social mediaaccording to Gartner. The utureo government is a very di erentgovernment and, in some cases, nogovernment at all, says Mr Di Maio, vpat Gartner. He cites government initia-tives such as Diplopedia, a wiki created

by the US State Department to supportcollaboration across intelligence andoreign a airs agencies, as well asexternal startups such as time banksthat through volunteering providean array o social services. Howeverin restoring public trust more must bedone than using these mediums well.

Pro essionalism 76.5 89.5 86.9 76.7 75.0 72.6 74.6 70.6 64.2 64.6Qualit y & Efciency 68.2 86.7 77.1 73.4 67.4 69.5 67.9 66.0 59.9 54.8Ease o doing business 70.9 86.7 77.2 74.9 74.9 75.1 69.3 69.0 61.7 60.2Problem solving 68.2 85.5 74.9 73.9 73.0 73.0 67.1 64.5 57.5 58.8Timeliness 66.2 83.9 70.6 71.2 77.4 74.9 61.4 63.2 56.9 57.3CSI 70.2 87.3 76.1 74.5 73.9 73.3 69.7 67.6 61.2 60.0Loyalty index 74.7 91.0 81.8 77.9 81.6 78.3 77.3 69.6 57.4 63.0

G o v e r n m e n t

A m b u l a n c e

S e r v i c e

G P s u r g e r y /

h e a l t h c e n t r e

P o s t O c e

I d e n t i t y &

P a s s p o r t S e r v i c e

D V L A

N H S / h o s p i t a l

s e r v i c e

R o y a l M a i l /

P a r c e l o r c e

J o b c e n t r e

H M R C

( I n l a n d R e v e n u e )

Pro essionalism 76.5 88.0 86.9 61.9Quality & Efciency 59.8 89.5 65.8 54.4Ease o doing business 63.8 87.4 68.1 59.9Problem solving 60.2 88.4 63.9 56.4Timeliness 58.7 89.9 61.9 54.7CSI 62.6 88.3 67.8 58.0Loyalty index 61.4 94.4 66.7 56.8

L o c a l

g o v e r n m e n t

L o c a l f r e

s e r v i c e

L o c a l p o l i c e

s e r v i c e

L o c a l c o u n c i l

Public Sector (continued)

Public Sector


25/36

Government

23

government and residents is in morecouncils having blogs. CivicSur is thename o a campaign by Nor olk CountyCouncil that is attempting to get coun-cillors blogging - a move increasinglyused throughout the country.

Increasing volumes o onlinebureaucratic contact are clearlywelcomed by the public. Over 80 percent o employers have fled theirend-o -year returns online says H HM

Revenue & Customs- an increase oaround 10 per cent comparedto the 2007 fgure.

This does not howeverindicate the extent o thegovernments ostensibledesire or e-government.The Prime Ministers plancentres on the creation o amassive programme o data

sharing between govern-ment departments. Thecollated volumes oin ormation allows thegovernment to create anotionally personalisedservice or public-service users.

Jill Kirby o the Centreor Policy Studies saysthat the underpinningphilosophy o the strategyis that there is no need tobreak down the monolithicstructures o Whitehall-managed public servicesbecause in ormation technol-ogy will provide the substituteor personal contact.

The governments In orma-tion Sharing Vision Statement 18

Results rom the CitizenshipSurvey that concluded in March 2008reveal that in the last year just 38per cent o respondents elt able toin uence decisions in their local area.Only 1 per cent more were involved insome kind o civic participation.

Despite, or perhaps because o this,more councils are becoming activelyengaged in developing online commu-nity techniques within councils own

web services. For example, Redbridgehas used online polls and interactiveorums to track eedback on posto ce closures. The e ect on the publichasnt as yet been quantifed, but anyexpansion o medium such as web 2.0through which people can have theirsay is surely a benefcial one.

Councils are indeed increasinglyusing social media to engage with

hitherto unreached age cohorts.Durham County Council or examplerecently used Facebook in an attemptto get residents not to use their carsor a day. The Do it di erent day waspart o a collaborative initiative withChannel Four.

Likewise Essex County Councilused Facebook to lobby or supportin its campaign against Post O ceclosures. The council created groupFighting or Essexs Post O cesallowed residents and others opposedto post o ce closure to register theirdiscontent ollowing the Post O cesannounced plans to close 31 branchesthroughout the county.

Further evidence o an emergingtwo way dialogue between local

months ago, said it is important thatpeople are confdent that their personaldata is kept sa e and secure. Followingthe loss o 25 million records by HMRevenue & Customers, such confdenceappears in short supply. Surveyssuggest that only 22 per cent o peopleare happy with the prospect o the datarecording whilst a mere 11 per centtrust the data will be kept confdential.

In act, serious aws in the

reliability o the technology and itsimplementation have all but moth-balled the prospect o e-voting in theUK. Serious concerns persist aboutthe security and transparency oe-voting systems and their vulner-

ability to organised raud.Government must clearly pick

the correct technology or thesituation and not use it or its

own sake i at every level,trust is to be restored anda two way dialogueestablished with the

population.


26/36

Automotive

24

T he automotive sector is a majorpart o the British economy,employing some 600,000people in over 69,000 businesses. 33

million vehicles are on the roads as o June 2008, signi ying the reliance onpersonal transportation o the Britisheconomy. Two actors point to higherownership rates in the uture. The frstis a growing population; the O ce orNational Statistics (ONS) estimates afgure o 71 million by 2031. The secondis an increasing rate o ownership per1,000 people; in 2002 it stood at 515

vehicles per 1,000 people and this isorecast to rise to 685 per 1,000. Thereare however fve variables that mayalter this consumer behaviour roadcongestion, environmental issues,rising running costs and the provisiono public transport. The last is theimpact o recession.

Commuting times have doubled inthe last ive years, with 20 per cent o all journey times now spent at a standstill.The rustration o gridlock has led to theUK having the worlds second highestrate o road rage (a ter South A rica),with 80 per cent o drivers havingexperienced road rage in some orm.Right-wing think-tank Policy Exchange,estimates tra ic congestion is costingthe UK economy 20 billion a year.

A Department or Transport reportsuggests this fgure may climb to 22

billion by 2025. O setting these lossesis obviously advantageous to both theconsumer and government requiringeither a radical re-think on toll roadsor example; over 50 per cent believe anational system o road user chargingwould make them use their cars less.

A huge shi t to public transport orelse a rapidly expanded road networkare other possible solutions. Consider-

ation and success ul implementationo any o these solutions is however,unlikely to evolve quickly enough to

deal with the immediate problem. Inthe short to medium term, conges-tion may there ore be a disliked yetunavoidable eature or consumers.

However the high contribution oroad transport, stationary or other-wise, to the UKs carbon emission totalhas lead to government intervention.Around 22 per cent o the UKs CO2emissions come rom transport, with13 per cent o these rom private cars.Gordon Brown has suggested thatpunitive taxation will help ensure thatby 2020 all new cars sold in Britain will

be electric, or hybrid vehicles produc-ing less than 100 grams o carbondioxide per kilometre.

To this end the Depart-ment or Transport hasannounced a 100mpackage to boost themarket or electricvehicles.

Sector under intense pressure through customers nolonger buying new cars and using public transport trend towards hybrid and electric vehicles

A t m tivConsumer sentiment it would appearis largely supportive o such actions,with data showing 41 per cent o

the forecast 2009

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