How Retailers can rebound from the Corona crisis – 3) The breaktrough of online shopping as the new standard

By News, Retail

It is not the first time that the world has been shut down through the outbreak of a deadly virus. In 2003, SARS forced people in China to stay at home as well. It turned out to be the trigger for B2B start-up Alibaba to move into consumer markets. They launched consumer shopping website Taobao (similar to the Dutch “Marktplaats”). At the time, JD also was a small company with 12 electronics shops in Beijing.  Revenues plummeted due to SARS as all but one of the stores had to be closed. The founder, Richard Liu, took drastic measures and turned towards a primitive version of ecommerce. He advertised his goods in forums, had employees manually write down orders, send text messages when the order was ready and personally delivered them to customers close to the office. Ever since, both Alibaba and JD have rigorously focused on offering consumers access to products from home. Today they both rank amongst the world’s largest retailers.

Just like SARS, the Corona outbreak leads to a drastic change in consumer lifestyle & behaviour with a strong boost in e-commerce – this time on a global scale. This blog addresses the opportunities and challenges this implies for retailers, and how to respond both short-term and long-term. In short:

  • Corona accelerates the breakthrough of online shopping as ‘the new normal’
  • Retailers struggle to quickly scale up e-commerce due to staff shortages, limited stock availability and inflexible logistics operations
  • Key short-term opportunities include use of underutilized stores as ‘dark stores’, radically re-allocate the workforce and instantly optimize assortments
  • Longer term, “think digitally” to reset your business model profitably(offering, stores and capabilities)

E-commerce is flourishing: the accelerated breakthrough of online shopping as “the new normal
Due to the Corona outbreak, consumers stay at home and are looking to create safety and comfort for themselves and their families. Online shopping addresses these needs perfectly. China has seen the number of consumers shopping for online groceries almost double in February (source: South China Morning Post). In the Netherlands we see the same figures. In certain sectors online demand levels are already similar to the holiday season (Thuiswinkel.org). Drugstore and personal care products have grown between 50 and 100% in recent weeks. Items that make life more enjoyable, such as sports, DIY and garden items, show growth rates between 20% and 40%.

The massive switch to online is expected to (partly) be a sustainable consumer behaviour rather than just temporarily. In 2003, the SARS virus accelerated the breakthrough of digital telephony and Internet.  Similarly, the heritage of Corona will be lasting confidence in online shopping and drastically enhanced adoption. New target groups such as elderly people are discovering the convenience of online grocery shopping. Sectors where online is still in its infancy are accelerating by offering new digital services. Examples are numerous and include e-health apps to track corona-related complaints, online (home) education applications and fitness video streaming as an alternative to gyms.

This crisis is creating new consumer habits that will likely stick. This means a hard reset in consumer behaviour: online shopping becomes the new standard in many areas. Therefore, now is the time for retailers to really take a leap forward in e-commerce.

Growing pains
Scaling up an e-commerce operation is not easy and meeting customer needs can be particularly challenging these days. For instance, for many retailers delivery times in e-commerce fulfilment have increased from same or next day to multiple days or even weeks. Why is this happening?

  • Personnel shortage in warehouses and parcel depots: at present approximately 15% of own- and temporary staff have fallen out due to Corona measures. For manual operations, this often leads to a direct drop in productivity. Food retailers are getting priority for labour because of their vital function in the chain – affecting other retailers even harder
  • Low stock availability: Supply chains have been severely interrupted leading to long delays in inbound replenishment orders from a.o. the far east. In addition, consumer needs have changed instantly, making forecasts unreliable. Taken together, this has drastically deteriorated inventory availability levels for many retailers.
  • Inflexible logistic structure: existing DCs are often inflexible to switch between offline and online logistics due to fixed mechanization. In manually operated DCs it takes time to set up new picking locations with supporting IT. For many retailers, E-DCs are separate from retail DCs, resulting in additional inventory allocation and movement complexity.

Fasten your seatbelt: innovate around new customer needs 
How can retailers better deal with the abovementioned challenges? We list some immediate actions that are already successfully being pursued in the market now.

Turn stores into ‘Dark Stores
A ‘dark store’ essentially deploys an underutilized (or even closed) store as a picking and delivery point for e-commerce orders. By converting your stores into small e-commerce warehouses you open up your entire store network to online shoppers. Beside boosting product availability, this can offer a fast home-delivery alternative for instance via a bicycle courier. The effects can be significant: from improved customer satisfaction and additional revenues from an instant proposition, to lower pressure on central E-DC operations and improved working capital. Benefits that can last beyond the current crisis.

To set this up, a system must be installed that creates pick orders for store staff (linked with existing ERP and WMS systems). Store employees need to be trained as order pickers and a place is required where consumers or couriers can pick up orders safely. To manage this operation, it is essential to have dashboards with real-time availability information.

Re-allocate your workforce

Chinese retailers have been successfully redeploying store staff in a radically different way. Employees were used as online influencers to reach their customers. Communication platforms such as WeChat (Chinese variant of WhatsApp) and Ding Talk were used to help multiple customers simultaneously via live streams.

This setup was pursued earlier this year by a cosmetics company called Lin Qingxuan (>2.000 employees) in the Wuhan region where all stores were closed. Using store staff as online influencers, sales levels increased by 200% compared to the previous year (source: HBR). Other examples range from re-training store staff for logistics roles to expanding customer service teams.

In case of scarcity, the solution might be found at other companies. For example, Chinese tech supermarket HEMA resolved the need for temps through using employees of restaurant, hotel & cinema chains in China.

Optimize your assortment
When Corona set foot in the UK, Amazon immediately reprioritized and switched assortments online and in their DCs. Non-vital products such as spring clothing were exchanged with high-turnover products such as soap, detergents and household products. In this way, consumers were provided with essential products, while at the same time higher efficiency levels were achieved.

Beyond the crisisimprove the profitability of your business model to hit back
The big challenge in the long term is moving towards a radical digital proposition with a profitable business model. We see 3 main themes to move to an optimized omni-channel setup:

1)Re-think your e-commerce offering 
Some key questions that should be answered are:

  • Assortment: what new products or services does your target group need? What product (combinations) do you offer? How will you deal with Low-value products that are costly to deliver at home?
  • Reach: how do you reach your target group online? what is your company’s story?  what communication channels are most effective?
  • Proposition: from what order-amount is free shipping offered? what kind of service window do you offer your customers? Like Amazon and bol.com can a subscription-based proposition increase your customers loyalty?
  • Operations: a highly efficient and cost-effective fulfilment operation is an absolute pre-requisite to achieve business profitability. How can higher degrees of mechanization and automation help improve your operation? How can (partial) outsourcing and workforce flexibilization contribute to further cost optimization and service improvements?

2)Re-define the role of the store
As e-commerce continues to grow and demand shifts from offline to online, it will put more pressure on the profitability of traditional stores. In China, retailers have already made radical choices by cancelling offline campaigns & promotions and replacing them with digital marketing, chat programs and innovative O2O (online orientation and payment, offline pick-up) partnerships. Ultimately, stores are no longer just a place for inventories and transactions, but much more than this. Advice, experience, return, pick-up, introductions, consumption and promotion can be key elements of the (new) role of the store. What do your customers need and what will you offer? How will you generate value out of this offering and channel? What value can this provide for your brands and suppliers and how will they contribute (financially)?

3)Become truly digital
Retailers such as Amazon, JD.com and Alibaba have repeatedly shown the way towards a digital future. One of the most prominent capability that sets them apart is their extreme Technology focus. They deploy highly flexible systems, tooling and dashboarding that supports their way of working and ensures IT integration for seamless omni-channel experience.  Additionally, their customer propositions are highly personalized and constantly updated by deploying advanced analytics and algorithms. All is enabled by a very flat organisation to assure maximum flexibility and fast decision making.

The Coronavirus is a tremendous challenge for all retailers, but one thing is certain: online shopping will be “the new normal”. When successfully setup, this can make the difference in how successful a retailer is coming out of this Corona crisis. And it will be worth it once the next crisis arrives.

Contact
Jasper van Rijn
Partner at IG&H
E: jasper.vanrijn@igh.com T: +31653376760

Maarten Vaessen
Partner at IG&H
E: maarten.vaessen@igh.com T: +31653571666

Author: Evelien Kip (evelien.kip@igh.com)

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New trend? 3 reasons why you need a Chief Remote Officer

By News, Organizational transformation

No warm welcome at the reception, no extensive lunch and no energetic high five with that one special colleague. Offices are abandoned. World’s largest home working experiment has begun. Suddenly, coerced by coronavirus pandemic, employees and management have to find their way in digital collaboration. But how do you make sure that working remotely does not come at the cost of productivity? A plea for a Chief Remote Officer.

We believe that the circumstances ask for a new role: a Chief Remote Officer. Like the CEO, COO or CFO, the Chief Remote Officer will be essential in creating the best possible outcome for the organization during these challenging times. We have identified at least three aspects to be part of the duties of your already indispensable colleague:

#1 The Chief Remote Officer fosters productivity
World’s largest home working experiment offers an infinite amount of opportunities, but it can also be challenging. It is, of course, important to remain connected with your colleagues. But conference calls can be quite exhausting. Therefore, it may be difficult to provide enough room for everyone to share his or her opinion during this situation. How do you make sure that virtual meetings are as productive as possible? And how do you make sure that everyone, while discussing the content, stays on the same energy level? The Chief Remote Officer helps to foster productivity by introducing energizers and work methods to experiment with.

#2 The Chief Remote Officer connects colleagues
It is important, especially now, to connect with the people around us, even if it is only digitally. Ask yourself the question: who do you send an invitation for a virtual coffee to ask how they really feel? In the Organization Transformation team, we find it important that successes are celebrated, and that productivity and motivation are being rewarded. Showing appreciation helps to remain connected. For example, surprise that one special colleague by sending a compliment card. Our Chief Remote Officer has already designed one for you. Let us know which compliment cards we can send your way.

#3 The Chief Remote Officer strengthens employability
Alongside fostering productivity and connecting colleagues, the Chief Remote Officer also explores how to strengthen employability within the organization. This ensures that employees can work from home in optimal conditions. As employer, you are responsible for a healthy workplace, whether employees work at the office or from home. The Chief Remote Officer gives advice on, for example, how to create an ergonomic home workplace. He or she also provides tips on how to stay physically, mentally and socially healthy during, and after, your workday. Above all, the Chief Remote Officer contributes to your happiness by making working from home more efficient and enjoyable.

The Chief Remote Officer is aware of how employees experience working from home and advises management on the matter, taking into account the human side as well. The Chief Remote Officer helps to strengthen connections among peers, but also between employees and supervisors.

Would you like to talk about working in a digital environment within your organization or use the momentum to get a head start? We are more than ready to help you explore new opportunities! On our website we will share more blogs, hand-outs and other materials related to efficiently working from home.

Banking blog series | 2) Support measures: from promise to proof

By Banking, News

In this blog, we want to provide practical tips about ways in which banks can successfully fulfil their societal role during this corona crisis.  

Entrepreneurs are in acute need
As expected, the demand from SMEs for support measures offered by the government and payment holidays offered by banks is high. At the end of March, about 40.000 self-employed and thousands of entrepreneurs (bars, restaurants and retail) applied for these measures. This massive amount of applications will probably increase further due to the extension of the corona measures until April 28. Current estimates are that up to 85% of all SMEs need support by its bank.  This requires fast handling. Only then, entrepreneurs in need – due to their direct loss of income – can continue to fulfil their obligations, such as paying their rent. 

We see different approaches in the way banks offer these payment holidays to their clientsAs ABN AMRO chooses for opt-out, ING and Rabobank offer their clients opt-in arrangementsThis means that ABN AMRO automatically includes all clients, unless they state that they do not want to make use of this arrangementOn the contrary, clients of ING and Rabobank need to apply for these payment holidays themselves when they want to participate. Each approach impacts the client and organisation differently.  

This acute need of measures makes it necessary for banks to design their operational processes in such a way they can start processing these tens of thousands of applications. Furthermore, this requires close cooperation with other parties, like the government and RVO. In short: a massive operation! 

tips to fulfil your promise 
Our experience has taught us that it’s important to already think two or three steps ahead, while taking these direct support measures that are needed during this corona crisis. This is, among others, demonstrated during the current contribution of IG&H to the National Coordination Centre for Patient Evacuation (read more here) 

In this article we will focus on practical tips1) people first2) fact-based decision making3) forward looking 

1) People first
Peoples vitality really is the most important condition to keep the bank up and running and to engage non-stop with clients in acute need. Especially for them, the support of banks is of the utmost importance! We see that clients in Retail, Leisure and Transport sectors are in most desperate need of this supportThese clients will remember the way the bank stands with them during this crisis, for a long time. The enormous amount of applications requires a short-term disciplined approach using ‘command and control’ style to accelerate.

2) Fact-based decision making
In order to process the massive amount of applications in a short period of time, banks need to act fastUsing resources efficiently demands an approach based on data and facts instead of gut feelingCreating a smart, data-driven assessment process helps tanalyze customer needs and assess liquidity forecastsThis makes it possible to estimate risks and prioritize them, which speeds up the process. Also, clients classified as high risks for payment difficulties, can be contacted pro-actively. Moreover, data can help to detect fraud in the enormous pile of applications, even though you surely assume your clients act in accordance with their best intention during this crisis.   

3) Forward looking
During times of crisis, immediate action as well as forward looking to future-proof solutions is required. Banks can play an important role in supporting their clients to establish a sustainable business model that can withstand these kinds of shocksBanks can realize this by assisting clients with smart solutions, for example a stress test app, which provides clients with real-time insights in their liquidity position and financial resilience. This way, banks can build sustainable business models and a sustainable relationship with its client. An impactful promise fulfilled!  

If you want to know more about these practical tips, we are willing to think along with you! 

In our next blog we will discuss how to shift from crisis management to forward looking for when this crisis ends 

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: +31620352438 

Authors:
Bas de Jong (bas.dejong@igh.com); Laura Hendriks (laura.hendriks@igh.com); Juliette Vernooij (juliette.vernooij@igh.com ; Annelies Stemfoort (annelies.stemfoort@igh.com 

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Ways to remain connected with your employees during the Coronavirus outbreak

By News, Organizational transformation

The Coronavirus outbreak has a firm grasp on organisations. Now that people are working from home, as an employer you may feel that you are losing connection with your employees. Working remotely can be challenging as it requires a certain level of self-discipline. Also, it can be difficult for employees to still feel involved with the organisation which may be detrimental for their productivity. How can you, as an employer, improve productivity and maintain strong relationships with your employees? 

 Working from home requires employees to adopt new behaviour and a shift to a new way of working. As the Organisational Transformation team at IG&H, we approach behavioural change from the perspective of the ABC-model. The ABC-model found its origin in cognitive behavioural therapy. The model helps to analyse and influence behaviour. In this model, A stands for antecedents; anything that triggers behaviour, B stands for behaviour and beliefs and C stands for consequences. According to the ABC-model, focusing on antecedents and/or consequences is pivotal to changing the behaviour of people. In fact, behavioural change can be accelerated even more by focusing on positive consequences.

Knowing this, as an employer you can focus on antecedents to make sure that your employees can function optimally while working from home. For example, by facilitating an ergonomic workplace (e.g. providing desk chairs or additional computer screens). Additionally, they can reward employees for positive behaviour. This can be done by giving compliments or sending thank you cards when employees set an example by combining hard work with their private life.

Besides creating the right preconditions and rewarding good behaviour with positive consequences, we have some additional practical tips to stay connected with your employees:

  1. Stay in contact frequently: it is of utter importance to stay in contact frequently with your employees and to make sure they have the feeling of being involved. Communicating frequently through online meetings and digital stand-ups, helps to assure that you are connected to your employees and to know what they are up to. This can be established by using Microsoft Teams, Zoom, Skype and Google Hangout.
  2. Be available: make sure to be available when your employees need you. It is easy to drop by when you are in office, but for some employees it may be difficult to break down the digital barrier. Encourage employees to reach out when they have questions. It can be helpful to host digital one-to-one conversations with employees.
  3. Address needs: especially during these unprecedented times it is important to address the needs of your employees. Ask employees whether they feel enough support from the organisation and whether they feel involved. There are plenty of digital options to facilitate this, for example through online surveys and feedback forms.

Would you like to learn more about digital collaboration? How to make working from home more efficient and fun for you and your colleagues? Or would you like to get more information on the requirements for setting up a home office? Please read the first part of our Online Best Practices.

Would you like to talk about working in a digital environment or use the unprecedented times to get a head start? We would like to help you explore new opportunities!

 

 

IG&H is involved in setting up and running the National Coordination Centre for Patient Evacuation (LCPS)

By Announcement, Healthcare, News

Due to the crisis, the workload of patient care across the Netherlands needs to be spread as effectively as possible. We are proud to announce that we have been asked to help with this very challenging, but also important task by the Ministry of Health and the Dutch Network for Emergency Care (LNAZ). This means we will set up and coordinate the National Coordination Centre for Patient Evacuation. The Team, led by Bas Leerink and Bart ter Horst has succeeded in making the system operational in 5 days.

More information about this can be found here: www.lcps.nu

How Retailers can rebound from the Corona crisis | 2) Fight now to take advantage later

By News, Retail

Five imperatives for retailers as they battle the Corona crisis, addressing most immediate challenges that simultaneously strengthen their future position.

It has been two weeks since the Corona outbreak has derailed the Netherlands through unprecedented measures to limit the spread. The Dutch government uses a ‘flatten the curve’ approach to fight the virus. Measures like social distancing, working from home and closure of restaurants are starting to have a stabilizing effect on the outbreak according to RIVM. Meanwhile, these measures are shaking up retail like never before.

The virus has major implications for every retailer. Both different immediate actions and preparation to rebound must be undertaken. We listed five immediate imperatives for retailers in their battle against Corona, that simultaneously strengthen their future position.

1) Use data to re-establish critical business performance

The Corona virus creates uncertainty. Uncertainty about the speed at which the virus spreads, about regulations that might be imposed, and about how long the current situation will last. For retailers, a key immediate challenge is how to deal with uncertainty in demand patterns. Customers show different and sometimes irrational behaviour. They are buying online instead of in stores due to contamination fear, they are hoarding in supermarkets out of fear for a total lock down and they are buying products to cook, sport and entertain themselves at home, since restaurants and sport clubs are closed.

In the meantime, retailers have switched to crisis mode and focus mainly on business continuity, trying to re-establish control. Decisions (e.g. around inventory) have to be made fast and are sometimes made based on business intuition or rule of thumb, rather than data driven. However, especially in these times it is of immediate importance to step up fact-based decision making. Step one is to establish access and structure to all available data (from the massive number of sources most retailers have) and turn this into sound business intelligence and relevant insight. With the level of uncertainty higher than ever, new well-structured insights are the only way to re-establish control. For retailers who do not yet have their data management and business intelligence capabilities in place, this is the time to rapidly set it up. A crash team can improve predictability of changing demand patterns step-by-step, even within few weeks. Such a team should include data science & IT and closely collaborate with buying & merchandising, and channels. Rapid roll-out of real time dashboards can facilitate decision making within critical retail processes such as online customer engagement, promotion management, supply chain planning and store merchandising.

2) Deepen customer understanding to rebound to the new reality

ING bank investigated the changes in Dutch card transactions. Their research shows a decrease in the number of transactions with 24% on March 20th this year, compared to a similar day last year. Toy stores, supermarkets and DIY see an uplift in the number of transactions (+10%; +5%; +2%), where all other retail segments show a decline, including restaurants & bars and clothing stores (-81%; -72%). This emphasizes that customer behaviour is radically changing, possibly structurally. Retailers must develop insight in demand changes to understand the new reality. Not having a grip on customer needs hurts everywhere in the business, from customer contact to product availability and prioritization of projects. For some changes, like the increase of online shopping, it is likely they will last not only during the crisis but also long after. However, other changes in demand will stay erratic and are dependent on the developments and measures the virus will bring us. In preparing for the rebound, retailers must not only respond to these customer demand changes but even outpace competitors in adjusting to the new reality. Time to find new growth opportunities.

The key to customer insight is understanding customer behaviour and identifying disruptive shifts in the customer journey. With customer insight comes the possibility to segment and develop tailored solutions. Think for example of a differentiated service for elderly people, where it is possible for them to chat or call with staff to place orders, instead of placing them online. At the same time, it helps control buying behaviour of your customers towards targeted outcomes. For example, a supermarket in Denmark came up with a pricing trick to stop the hoarding of hand sanitizers by pricing the second bottle of sanitizer 25 times as high as the first one.

To adjust the supply chain to the new normal, developing predictive analytics based on customer demand patterns is key. Since demand is erratic, only point of sale data is not a good parameter for future demand. Instead, predictive analytics reflecting new demand patterns are needed to adequately adjust buying plans, intake orders, stock management policies and allocation rules. Intensive cooperation between store planners, replenishment planners, category managers and purchasers, together with these data and analytics, makes it possible to prepare for the rebound.

3) Scale e-commerce by leveraging store network and investment in logistics capacity

Changes in demand as well as governmental measures have major implications on the utilization of retailer infrastructures. Food retailers suffer from an overburden of their distribution centres and reach their logistical as well as their technical maximum capacity for e-commerce. Conversely, various non-food retailers are closing their stores to protect their staff and customers’ health or because of a dramatic decline of traffic. Both situations ask for creativity and flexibility in the deployment of existing infrastructures.

Most non-food retailers face (a period of) further underutilized store infrastructure. To stay relevant to customers, focus shifts from offline to online sales. Not an easy task when stores used to be the main channel. If retailers succeed in having customers find their way to their website and shop online, they face a next challenge in scaling their logistics. A solution in this case might be to use the store network as customer fulfilment centres, so called ‘dark stores’. This relieves the existing logistics network. Alternatively, retailers can be creative and think about helping others. As does fashion giant H&M, who is offering up its supply chain to help hospitals reduce their medical supply shortages, by producing protective medical equipment. Moreover, food retailers reaching their maximum capacities for e-commerce, should try to leverage their store network to provide immediate capacity relief.

In parallel, this is the moment to develop a plan how to scale-up structurally and mature a true omni-channel proposition. Whilst today’s e-commerce hyper growth is driven by Corona regulations, it will likely turn out to be a structural accelerator of shifting demand from offline to online. This provides new growth opportunities for which online pure players are at pole position, just as SARS boosted Alibaba in 2003. Capturing these opportunities requires swift action (a topic we will discuss in our next blogpost). This can involve immediate decisions to prepare investment in mechanisation and capacity, in omni-channel IT integration and where possible leverage suppliers in the network.

4) Turn Corona crisis way of working into structurally more efficiency and responsiveness

Due to the Corona outbreak related governmental measures, people are working from home as much as possible. This requires virtual team collaboration with distributed team members, which was new to many of us. Meanwhile, a lot of retailers are already used to digital collaboration tools such as Microsoft Teams to work together from a distance. It starts to demonstrate core retail processes can be operated with greater efficiency, by fewer and less long meetings with only the minimum amount of people involved.

As a result, we see some immediate implications for retailers. Most retailers by now have re-prioritized and shortened the often very long list of projects that hostage the organization. Now it is time to establish a separate digital project innovation workstream, focused on a very small set of active projects. Think of 5 to 10 for the entire business. As there is an immediate need to deliver these projects within days or weeks rather than months or years, a digital factory has to be established. A combination of low-code software and data analytics is very well suited to cut through these project lead-times and deliver business relief quickly.

Moreover, in running the day to day business, we see an opportunity to use the Corona crisis to overcome traditional HQ functional silo’s and make a structural shift to virtual teams. Through digital collaboration, operating with suppliers in a well-integrated way (and directly on board) is finally possible as well. Making this work requires new dashboards to be created instantly whilst establishing a (new) well-working workflow for core processes like assortment changes, promotion processes and supply-chain planning and replenishment.

5) Last but not least, put people first and keep communicating

With Corona still not at its peak, the health situation of staff is a growing concern. Most obvious, it is important to facilitate frontline staff who are constantly in contact with a lot of different customers, and to optimally protect them against the contamination hazard. Next to that, pressure is high on staff working in the supply chain, with absenteeism expected to increase over the near term. Even at headquarters, where employee tasks seem to be more easily executed from home, concerns are high; if not about one’s own safety then about the safety of others. Day-by-day new insights arise, making it an uncertain time for all of us which should not be underestimated.

A lot of retailers are already taking actions to protect, inform and involve their people. Only if necessary, people work from the office where teams are mostly being split up in several work shifts to prevent spreading of the virus between them. Furthermore, CEO’s provide daily communication about the most recent developments and decisions made. Finally, in a growing number of cases, non-food shops are voluntarily closed to protect their staff. At some retailers, we see rigorous and detailed staff contingency planning to ensure continuity of all aspects of the business. All examples of difficult decisions or time investments to make, but ones that will not be forgotten.

Putting people first is the right thing to do, now more than ever. Customers will remember decisions companies make during this crisis and the effort they put in to deliver goods and services to the best of their possibilities. Being seen to put people first and communicate frequently will create a positive relationship between companies and their customers as well their employees, with long-lasting benefits after the crisis.

Interested in the implications of above imperatives in your organization? Please let us know!

 

Robert Spieker
Partner at IG&H
E: robert.spieker@igh.com T: +31622791962

Maarten Vaessen
Partner at IG&H
E: maarten.vaessen@igh.com T: +31653571666

Author:  Myrthe van Hoek (myrthe.vanhoek@igh.com)

 

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Banks take societal role

By Banking, News

From crisis to opportunity
Even though the Corona crisis brings along huge challenges, it also offers the opportunity for banks to act in accordance with their purpose and take a societal role. This way, lost confidence of clients can be regainedAnd in addition, client loyalty can be increased by truly listening to clients’ needs and concernsBy combining fast decision making and execution power, banks can – especially now –  differentiate and position themselves as the partner in good and in bad times. The question remains: how? 

Banks take responsibility
The Corona virus has impacted the Dutch economy enormously within a short period of time. Big events are being cancelled, ‘social distancing’ is already the word of the year and both small, medium and large enterprises are forced to close their doors. As a consequence, many organisations are worried about their financial situation, also because most issued loans were based on growth, not taking this crisis into account.  

Immediately after the start of this crisis, many Dutch banks have acted upon their societal responsibility. Good JobBanks offer a great variety of support measures, such as extension of credit standards and deferral of interest and instalments, to support clients through these difficult timesBank employees are working overtime to answer questions of clients experiencing liquidity problems due to the Corona virus. While banks were part of the problem during the credit crisisthey are now playing a crucial role in the solution, thanks to strong capitalization and liquidity buffers. 

A challenging promise
While banks are well positioned to support entrepreneurs due to their strong capital position, mass demand of SMmight lead to huge operational challenges. Banks already find themselves in need of capacity for large compliance projects, like KYC and CDD, wherefore managing this crisis and the expected mass demand for deferral interest and instalments will only increase this need. All in all, this might lead to huge operational pressure. 

Making impact, now and in the future
During this crisis period, the operational execution and adaptability of banks are being testedFirst of all, the banks need to demonstrate to what degree they are able to support entrepreneurs efficiently. Secondlythis shows the ability of a bank to offer a solution for this crisis and at the same time keep the daily-operations up and running. For banks to actually position themselves as a partner in good and in bad times, it is necessary to deploy people, data and technologyMature use of digitalization and data-driven processes are crucial to efficiently handle applications. Doing this, banks are able to decrease their operational pressure and increase the delivered client valueThis way, banks can deliver their promise to support clients in need, today and in the future! 

In the following blog we will discuss the pre-conditions for successful crisis management.  

 Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: +31620352438 

Authors
Bas de Jong (bas.dejong@igh.com); Laura Hendriks (laura.hendriks@igh.com); Marijn Schneider (marijn.schneider@igh.com) 

 

IG&H starts series of blogs for banks in the Corona crisis
The banking industry takes societal role in the Corona crisis! In a series of blogs we will explain the lessons Corona teaches us and the opportunities this crisis gives us as the banking industry. The notion that the corona virus is impacting every bank, is a given. The virus puts huge pressure on the industry resulting in a great amount of questions and uncertainties. What is the effect of this crisis for our clients and employees? What can we do to make sure we can scale up after this crisis? What will the market look like after the crisis and how can we continue business like before the crisis? This first blog focuses on the impact of the Corona virus for commercial clients. 

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3 points of focus for teams during the corona crisis

By News

What seemed to be (relatively) limited to Asia until a few weeks ago has now grown into a global crisis. While most of us are working from home in the Netherlands, some countries are already in full lockdown. Although necessary also quite impactful for teams. So how do you not only take care of your own health during this period, but also of that of your team colleagues?

The World Health Organization (WHO) has used the same definition for ‘health’ since 1948: “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” What is striking in this definition is that, in addition to paying attention to the physical aspect of health, the mental and social aspect are also important. Especially in this period, where the main focus is on doing everything possible to stay physically healthy, we should therefore also pay attention to each other on a mental and social level

Think, for example, of team colleagues with children, who are currently having a hard time mentally. No matter how much you love your children, no child is fun 24 hours a day, 7 days a week. Or think of colleagues who live alone and now spend their days without company, outside of any digital contacts. How can we help each other as a team in these times to stay physically, mentally and socially healthy (and thereby productive)?

Physically
One of the biggest physical risks of working all day behind your laptop is that you get shoulder and back problems. These can even become long-term complaints that lead to absenteeism. So keep your colleagues sharp on enough exercise. Our tip? Share photos or videos of ideas for exercises with each other or even better, exercise together virtually. Oh yes, and upgrading your workplace from the kitchen table is also a good idea!

Mentally
Especially for parents who work at home or people with sick relatives, the current situation can lead to many responsibilities at the same time, that they all want to do well. In addition, the potential impact of the corona crisis also creates additional mental pressure for everyone. Our tip? As a team you can check in together daily via video calls, ask how everyone is doing and try to take over things from people temporarily, where necessary and possible.

Socially
What this period also teaches is how normal social interactions are and how abnormal it feels to not be able to have a cup of coffee with a colleague. Certain colleagues who live alone now run the risk of feeling lonely. Our tip? Continue to stay in contact as a team, for example by planning virtual lunches, drinks and cups of coffee that are not just about work (content).

In the coming period we will publish more blogs from the Organisational Transformation team of IG&H with concrete tips to maintain your health and productivity as a team. Do you have ideas for themes for a next blog or have you tried one of our tips? We would appreciate it if you share this with us!

Please note: the most important thing remains to follow the guidelines of the government!

IG&H Mortgage Update | Insights from Q4 2019 and an annual review of 2019

By Banking, Mortgage Update, News

Utrecht, March 5, 2020 – New figures from Kadaster (The Netherlands’ Cadastre, Land Registry and Mapping Agency) show that growth in the mortgage market continued in the fourth quarter of 2019. This is mainly caused by the mortgage revenue increase among people taking out refinancing and additional loans. In the fourth quarter of 2019, the number of mortgages issued to this group grew by 26.1% compared to the preceding quarter. Over the whole of 2019, the mortgage market rose to a record high of €128 billion.

Download the Mortgage Update (in dutch)

“This surprisingly strong growth is caused by a rise in the number of mortgages as well as a mortgage loan increase,” says IG&H Consultancy’s Joppe Smit. In 2019, the average mortgage loan increased by 6.5%, reaching € 326,000 – its highest point since 2006. Compared to 2018, the number of mortgages increased by 13.4% to 392,000 mortgages taken out. This growth is mainly caused by an increase in the number of mortgages among people taking out refinancing and additional loans (+35.9% compared to 2018).

First-time homeowners lag behind
The mortgage revenue among first-time homeowners fell by 1.4% in the fourth quarter. Compared to the third quarter of 2019, the number of mortgages taken out by first-time homeowners fell by 3.2%. The average mortgage loan among first-time homeowners, however, increased by 1.9% to €276,000, while it dropped among existing homeowners and those taking out refinancing and additional loans. “The number of mortgages only fell among first-time homeowners, and the average mortgage loan only increased among the same group,” says Joppe Smit. “This illustrates the difficult position they’re in.”

The majority of those taking out a mortgage is still made up of existing homeowners – with a market share of nearly 46%. However, those taking out refinancing and additional loans come increasingly closer with a market share of nearly 36%. Compared to the third quarter of 2019, the number of mortgages taken out, in particular, rose significantly (+26.1%) among those taking out refinancing and additional loans. Among existing homeowners, growth is less significant (+6.9%) compared to the third quarter of 2019.

Growth of Aegon’s and Munt’s market shares
In the fourth quarter of 2019, banks lost a market share (-4.7 percentage points) among all groups of people taking out mortgages. Investment funds enabling non-bank lending benefited from this decline and grew their market share (+4 percentage points). “What’s notable is that the market share of the top 3 banks dropped to 48.9%, hitting the lowest level since 2016,” says Joppe Smit.

This quarter, there were several noteworthy shifts in the top 10 providers. Aegon and Munt moved up 3 spots, taking the 5th and 6th spot. MUNT Hypotheken increased by 2.2%, marking the highest increase in the market. As a result, it has strengthened its position in the top 10 of mortgage lenders. The biggest losers in the market were Florius (-1.9%) and Volksbank (-1.2%), which dropped to the 7th and 9th spots, respectively.

We hope you enjoy reading the Mortgage Update and welcome your response!

Sincerely,

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: 0031 6 2035 2438

IG&H Mortgage Update
Authors & data analysis:
Annelies Stemfoort (annelies.stemfoort@igh.com), Brenno Baas (brenno.baas@igh.com)

Corrected Kadaster figures
Due to shortcomings in data provided previously, Kadaster corrected and then re-provided figures over the whole of 2019. The figures included in this Mortgage Update are based on the new figures. After consultation, we also corrected one mortgage lender’s production figures, as these didn’t include a significant part of the production – even after Kadaster’s correction.

 

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Download: The Digital Transformation Journey

By News, Technology

Download: The Digital Transformation Journey

In this playbook we explain the journey an organization and its employees go through when they start to work with new platform technology.

Digitalization develops at an unprecedented speed. Yet quite a few organizations are unequipped to respond to it. A real issue, as digitalization is no longer a choice –it’s a necessity for every company that wishes to survive. The problem is, many organizations lack insight into the number and quality of their applications –they are flying blind! Budgets are largely spent on maintaining outdated IT systems, rather than invested in applications which facilitate innovation and differentiation.