Suncorp to move away from ‘marketplace’ strategy

“You will hear a lot about that in the coming weeks as we go through the result. Doing things core to our business and doing them well,” he said.

Asked to clarify whether the comments meant Suncorp was winding down the marketplace strategy, a spokeswoman for the $16.6 billion banking and insurance giant, which announces its full-year results on Wednesday, was non-committal.

“The comments were about highlighting the breadth of Suncorp’s digital program and the strength of all of our distribution channels, of which the marketplace is one component. Our channels span digital, stores, contact centres and, in particular for this audience, the intermediated channel,” she said.

However, The Australian Financial Review understands that Suncorp will announce on Wednesday that the controversial marketplace initiative will no longer play so prominent a role in the group’s digital strategy.

Former Microsoft Australia managing director Pip Marlow was hired to lead the marketplace strategy. which included an online financial services supermarket as well as the opening of the bricks-and-mortar “Suncorp Discovery Store” on Sydney’s Pitt Street Mall in December 2017.

At the time Ms Marlow said the store would shift “the focus from products and services, to having conversations that are more about our customers’ aspirations, whether it’s home ownership, saving for a holiday or buying a car, so we can create value for them”.

However, Ms Marlow admitted in July last year that building an online financial supermarket from scratch had been more difficult than expected.

“I would definitely say it was harder than we thought. We didn’t have a deep history or DNA of doing this so the degree of difficulty was harder, but I feel like really great progress has been made,” she said in an interview with the Financial Review.

Analysts and investors were never convinced by the strategy, worrying it was a costly investment without clear benefits to the bottom line. Most referenced the strategy’s underperformance as a reason for Mr Cameron’s sudden departure in May.

In a note in February, Morgan Stanley wrote: “We struggle with the cost and complexity of the multi-brand offering and challenges to realising benefits from the marketplace strategy, likely further complicated by shifts in regulation.”

On analyst told the Financial Review: “I don’t think investors were on board with the marketplace. They were spending a lot of resources without much benefit.”

He said there would need to be a “strategic call” made on the strategy, but added it was unlikely before a permanent CEO was in place.

Of the internal candidates, Mr Johnston is considered a frontrunner, along with chief executive of the insurance business Gary Dransfield.

Source link Finance News Australia

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