Homemovers’ spending power stretches far beyond their move date

Retailers won’t survive if they are not investing in relevant customer interaction. Understanding customers and prospects, what they are doing and why they are doing it – so we can respond appropriately – has never been more important as a means to build firmer customer relationships.

Research recently revealed by Cognizant showed that UK shoppers can become indifferent to retailers if they receive irrelevant offers from them. Only 38% believe that retailers actually use their data effectively, while 51% say that the offers they receive do not offer value and 56% claiming the products are not relevant.

Retail marketers instinctively know that acting on consumer insight is essential, with many rightly obsessed with finding patterns of consumer behaviour to help inform and implement personalised marketing campaigns. This kind of analysis makes it possible to put customers and prospects into specific segments so they can then receive appropriate communications. This is a good first move and yet it lacks one essential element – context.

One of the best ways businesses can add context to their customer knowledge is to use life event data. Whether it is moving home, having a baby, going to university or retiring, all of these events have a massive impact on consumers’ lives – and on their purchasing behaviour too. Factual life event data is far more powerful than inferred data that is more commonly used in marketing as it enables brands to truly understand the motivations driving consumer activity rather than having to make assumptions.

Bringing context into marketing decision-making brings a new spin to CRM. Instead of Customer Relationship Marketing, a better definition in today’s data-rich, always-on and connected world is ‘Conversations that are Relevant and Measurable’. By understanding the motivation behind the behaviour, brands can move beyond tactical offers to deeper ongoing relationships where communications are not just about eliciting sales, but about giving consumers what they need according to a bigger picture of their life events. It’s looking beyond one transaction or online search and playing a longer game.

The opportunities that this approach offers retailers can be seen very clearly within the homemover market. It typically takes at least 18 months from start to finish for people to move, including 12 months post move when the main home improvement spend occurs. So identifying people during the homemover process offers the chance to reach people at a time when they are likely to make many more major purchases compared to normal. The purchasing power of homemovers equates to £12 billion annually across the UK – with those purchases being typically spread across at least 12 months.

In the graph below, we have mapped data from a number of major brands against our database of 99.6% of all UK homemovers – giving them insight into the relationship between customer behaviour and the homemover process. These Homemover Waves show when purchasing dips and spikes across several industry sectors as homemovers shift from putting their house on the market, through to moving in and beyond. So, for example, we know that furniture buying actually kicks in before people move, DIY happens at the point of moving in, electrical goods are bought a month or more afterwards and, presumably following the stress of the move, holidays become a big purchase between two to six months post-move.

For the retailers who have mapped their own data against our homemover data, this insight has proven invaluable. For a start, they can identify what proportion of their customers are homemovers. For some brands the proportion can be massive – with, for example, 20% of bed buyers and 35% of consumer electrical buyers being homemovers. By understanding the size of the opportunity that homemovers provides them they can allocate budget accordingly.

The next step is to then track their database against homemover data so that they can identify which of their customers are moving at any given time, and then send them communications that are relevant to where they are in the homemoving process

Homemover data can be used across a wide variety of digital and traditional channels including direct mail, email, programmatic advertising and social media, so brands can reach homemovers not only with the right message at the right time, but using the right channel.

In our experience homemovers consistently outperform other retail consumers, remaining at the top of the pile for at least 12 months. So why aren’t all retailers creating homemover marketing strategies yet? One of the biggest barriers is the fact that they are not sure who should own the activity – Digital? CRM? Marketing? – making it difficult to secure budget. However, for those retailers who have woken up to the opportunity, it is often viewed as their secret weapon – an untapped opportunity that, once turned on, keeps flowing. As marketing teams increasingly shift towards ecommerce and digital channels, though, more retailers are likely to wake up to the power of the Homemover Wave.

Source: Twentyci

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On this week in history

On this week in history (25th September to 1st October inclusive) as follows;

  • 1066 – Norman invaders land in England
  • 1888 – The Central News Agency in London receives a letter signed ‘Jack the Ripper’ about the current spate of horrific prostitute murders
  • 1897 – Britain’s first motor bus service starts in Bradford
  • 1903 – Women get the vote in the Connecticut state elections
  • 1907 – New Zealand becomes a Dominion
  • 1932 – Catalonia in Spain becomes autonomous; it has its own parliament, language and flag
  • 1949 – Mao Tse-tung formally becomes chairman of the Peoples Republic of China
  • 1960 – Europe’s first ‘moving pavement’, the travellator, is opened at Bank Underground Station in London
  • 1968 – Just one day after the end of theatre censorship, 13 naked actors faced a London audience as the rock musical ‘Hair’ opened
  • 1969 – The sound barrier is broken by Concorde 001 for the first time during a test flight in France
  • 1974 – The Watergate trial begins
  • 1976 – A ‘broke’ Britain asked the International Monetary Fund (IMF) for a £2.1 billion loan
  • 1984 – Britain and China agree that Hong Kong will revert to Chinese rule when the lease expires in 1997
  • 1986 – In Wales a British police constable is jailed for biting off part of a colleague’s ear during a rugby match
  • 1987 – john M Poindexter officially resigns from the US Navy over the Iran-Contra scandal

And some notable birthdays include;

  • 1547 – Miguel de Cervantes, Spanish playwright best known for his novel Don Quixote
  • 1573 – Caravaggio, Italian baroque painter
  • 1722 – Samuel Adams, American revolutionary
  • 1847 – Annie Beasant, English social reformer and theosophist who promoted birth control
  • 1862 – Louis Botha, South African Prime Minister
  • 1888 – T S Eliot, American born poet and playwright
  • 1924 – Jimmy Carter, American president and peanut farmer
  • 1924 – Truman Capote, American novelist and short story writer
  • 1934 – Brigitte Bardot, French actress and international sex symbol
  • 1935 – Julie Andrews, British film and stage actress
  • 1935 – Johnny Mathis, American ballad singer
  • 1935 – Jerry Lee Lewis, American rock ‘n’ roll star
  • 1945 – Bryan Ferry, British pop singer with the group Roxy Music
  • 1947 – Marc Bolan, Lead singer of British pop group T-Rex
  • 1948 – Olivia Newton-John, Australian singer and film actress

House prices in England and Wales down fractionally by 0.2% in August

House price growth in England and Wales fell marginally in August by 0.2%, which left the average England and Wales house price at £297,398, up 2.1% year on year, the latest index shows.

The data from the Your Move index also shows that sales increased by 5% month on month and are up 6% year on year on a seasonally adjusted basis.

All regions in England and Wales have continued to record annual price growth led by the East of England with a 5.5% rise to a new peak of £325,616 while London has lowest rate of regional house price growth at 0.7%.

An analysis in the index report shows that annual increases peaked in February 2016 at 9.1%, with both London and the South East boosting the national house price inflation figure by over 2%.

The data also shows that the in the South West prices are up 3.9% annually, up 3.5% in the East Midlands and up 3.9% in the North West. Wales has seen an annual rise of 1.8%, the North East a rise of 1.2% and Yorkshire and Humber an increase of 1%.

In the East of England region price growth has been led by Southend-on-Sea, up 11%, Luton up 9.2%, Bedfordshire up 9.1% and Peterborough up 8.6%. No authority in the region has seen prices fall for eight months.

Elsewhere, Poole recorded price growth of 12.9%, Blaenau Gwent was up 12.8%), Pembrokeshire up 10.3% and Rutland up 16.3%, while the biggest fall on an annual basis is in Carmarthenshire with prices down 7.2% over the year.

 House prices in London fell by an average of 1.4% in July, leaving the average price in the capital at £591,459. Over the year, though, prices are still up by £4,134 or 0.7% compared to July 2016. In July some 21 of the 33 London boroughs saw price falls, however 20 boroughs have increased over the year.

Much of the fall in London’s price in the last month is down to the most expensive boroughs. In Kensington and Chelsea, the most expensive borough, prices fell by 3.4% to £1,823,659, in the City of Westminster, the second most expensive, prices were down 6.8% month on month and 9.8% year on year, the biggest annual fall, to £1,347,536.

Just two of the cheapest third of boroughs have seen prices fall in the last year. In Greenwich price were down 3.9% and Enfield down 0.9%. By contrast Croydon, up 5.4% annually, and Lewisham up 6.7%, both saw new peak average prices in the month. Looking at transactions, sales in the three months from May to July 2017 were up 7% on the same period last year.

‘We’re seeing a balanced market this year. Regions like the East of England are closing the gap on the traditionally stronger performers like the South East as first time buyers drive growth in search of more affordable housing,’ said Oliver Blake, managing director of Your Move and Reeds Rains estate agents.

‘The rise in transactions in August and strong regional performance highlights a monthly slowdown of prices in the capital. However, on an annual basis, London’s boroughs, particularly those in the south east, are continuing to show steady growth,’ he added.

Source: PropertyWire

First time buyers and home owners could face increased mortgage costs this year

Over two million first time buyers have bought a home with a mortgage since interest rates fell to an historic low of 0.5% in March 2009 but experts are warning that could come to an end as a rise in rates is becoming increasingly likely.

The Bank of England has hinted that a rise might happen sooner than expected, possibly before the end of the year. Another potential influencing factor is that Sterling has increased against the US Dollar since prospect of a rate rise has increased.

The increased likelihood of an interest rate rise sooner rather than later came after remarks from a member of the Bank’s rate setting monetary policy committee (MPC), who had previously been regarded as one of the most wary of a rate rise.

‘Until recently, I thought the appropriate response of monetary policy was to be patient, given modest growth and subdued underlying inflationary pressure. But the evolution of the data is increasingly suggesting that we are approaching the moment when the bank rate may need to rise,’ said Gertjan Vlieghe, an external member of the MPC. He also hinted that any change in rates might eventually be greater than the quarter point cut introduced after the European Union referendum.

Last week, while the MPC voted to keep rates at 0.2%%, it indicated that a rise was coming, although there was scepticism from some economists about the rationale behind any rise. However, it is expected that the US will see rates increased this week which could put further pressure on the MPC next month.

Economists at Barclays expect a rate rise as soon as November. ‘We believe the MPC is ready to take the risk of a hike, even faced with disappointing data, as it has boxed itself into a corner,’ the bank said.

‘Although the Bank of England hasn’t raised rates this time around, the message is clear that consumers should be aware this might happen sooner than expected. When rates do eventually rise, it will be first time over two million people have experienced this as a mortgage holder, and more rises are likely follow,’ said Shaun Church, director at Mortgage Broker Private Finance.

‘However, while today’s rock bottom mortgage rates can’t last forever, further base rate rises are likely to be gradual and mortgage rates won’t necessarily rise at the same rate. Healthy competition between lenders should ensure that mortgage pricing remains low for some time yet. Home owners therefore have plenty of time prepare for a slight increase in pricing in the coming years,’ he pointed out.

According to Ishaan Malhi, chief executive officer of online mortgage broker Trussle, anyone with a mortgage should be thinking ahead. ‘With the Bank of England once again choosing to hold interest rates at 0.25%, anyone with a mortgage should be thinking about how they can take advantage of the situation,’ he said.

‘Borrowers should check what level of interest they’re paying on their mortgage and whether they could save money by switching to one of the more competitive deals on the market. Switching mortgage can now be done on a mobile in a matter of minutes and could shave hundreds of pounds off the average household’s monthly outgoings,’ he explained.

He also pointed out that low interest rates offer the potential opportunity for home owners to overpay on their mortgage, increasing equity in their home and bringing down their debt. ‘It’s easier than ever to stay on top of your mortgage, and the rewards for proactively managing it can far outweigh savings made by switching energy or internet provider,’ he added.

Leading finance platform, Freedom Finance, is also urging owners to review their finances after revealing a future interest rate rise could add more than £750 to the average annual mortgage bill.
Freedom Finance reviewed its consumer database to provide a snapshot of the nation’s mortgage finance from July, which showed the average family has a £130,000 mortgage on a 19 year term. A 1% rise on a lending rate of 2% would equate to an extra £756 a year.

Andrew Fisher, managing director of Freedom Finance, believes that consumers should do their sums now and understand the impact even a small increase in interest rates could have on their monthly mortgage payments.

‘Once families are armed with the right information they are in a much stronger position to take action to ensure they’re on the best rate for their circumstances and aren’t spending money unnecessarily. It’s easy to feel helpless when encouraging financial news has been so thin on the ground for such a long time. As a country we’ve become use to financial restraint,’ he said.

‘While it’s unlikely that we’d see an increase of 1% in one month, it’s perfectly conceivable that in the space of only a few months many people in the UK will have to factor in a substantial extra cost,’ he explained.

‘For some that will mean the annual summer holiday has to wait for another year, for others it might mean having to reduce how much they save. Some people are having to balance such a tight budget that the impact could be greater still,’ he added.

Trading standards secure £1m confiscation order against rogue letting agent

A former letting agent from Kettering has been ordered to pay a confiscation order of £1 million made under the Proceeds of Crime Act following a financial investigation by Northamptonshire County Council Trading Standards.

Harpreet Garcha, who ran property lettings franchises Belvoir in Kettering, Desborough and Corby, was sentenced to two years and nine months in prison in 2016.

The court heard how Garcha, now aged 41, of Bath Road, Kettering, fraudulently generated significant profits at the expense of tenants and landlords by dishonestly increasing the cost of maintenance and safety work.

He was also convicted of money laundering, VAT fraud and insurance fraud. The offences were committed out between 2008 and 2012.

At a hearing last Friday (September 8th), a confiscation order for £1.006 million was made under the Proceeds of Crime Act 2002 – the largest confiscation order ever secured by Northamptonshire Trading Standards.

Of that, £51,000 will be paid out in compensation to Garcha’s former tenants and landlords who were victims of his offences.

Garcha will face up to seven years in prison if the order is not paid in full.

County council cabinet member for public protection, strategic infrastructure and economic growth Cllr André Gonzalez de Savage said: “This confiscation order against Harpreet Garcha is by far the largest order ever secured by Northamptonshire Trading Standards and is entirely fitting for the shocking level of offending by this individual.

“This is an amazing result for Trading Standards and reflects the hard work of the officers involved in carrying out both the criminal and financial investigation.”

Garcha’s fraudulent business practices first came to the attention of Trading Standards when a landlady made a complaint about being overcharged for routine maintenance at her rented home in Kettering.

Upon querying the cost of safety checks, she had been provided with invoices for £502.50 – these were fakes as the contractor doing the work had only charged £166.25.

Changes in Drivers’ hours

Drivers’ hours: changes to fines for commercial drivers

DVSA traffic examiners are going to be given new powers to issue on-the-spot fines for any drivers hours offences committed in the last 28 days.

Traffic examiners will be able to issue fines for up to 5 drivers’ hours offences in a single check.

Further information will be released by DVSA nearer the time.

Also, from 1 November 2017, traffic examiners will issue fines of up to £300 to drivers who spend their full weekly rest break in their vehicle, in places where it causes a problem.

Find out more about the changes to drivers’ hours fines.

Source: Driver and Vehicle Standards Agency

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Mortgage approvals jump to 16-month high while consumer credit growth slows, Bank of England figures show

Mortgage approvals for house purchases jumped to a 16-month high in July, new figures from the Bank of England released today show.

Last month, some 68,689 mortgages were approved, up from 65,318 in June and a seven-month low of 65,140 in April.

Howard Archer, chief economic adviser for the EY Item Club, noted that July’s figure was the highest reported by the Bank since March 2016, when activity was lifted ahead of stamp duty rises.

However, he added that mortgage approvals are still well below the average monthly level of 81,772 seen between 1993 and 2017.

He said: ‘While July’s marked pick-up in mortgages may ease some concerns over tepid housing market activity, we have doubts that it marks the start of a significant upturn. Mortgage activity can be volatile on a monthly basis’.

John Eastgate of OneSavings Bank said: “Mortgage approvals have recovered from last month’s lows despite persistent economic uncertainty. This is impressive given the combination of inflation and low wage growth, although the low levels of purchase activity should be seen as an indicator of still fragile consumer confidence.”

Elsewhere, the Bank also reported that consumer credit growth slowed to a 15-month low in July, 9.8 per cent, down from 10 per cent in June.

Archer said slowing unsecured consumer credit growth would be a “significant relief” for Threadneedle Street, with the Bank recently warning lenders of a looming “spiral of complacency” around consumer debt.

“The Bank sees the recent uptrend of consumer borrowing as a significant risk to the economy and has warned that banks risk become complacent in their lending behaviour,” he said.

“The latest credit conditions survey did at least indicate that banks are becoming more cautious in their behaviour by making less unsecured credit available to consumers and tightening lending standards.”

The figures have been released on the same day Citizens Advice published a report calling for a crackdown on lenders increasing credit card limits for debt-laden consumers.