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UK Installment CreditProduct Type: Market Research ReportPublished by: Datamonitor Published: January 2004 Product Code: R313-6321 Description IntroductionDespite the current boom in the consumer credit market, installment credit providers have witnessed a decline in both balances outstanding and gross advances over the last five years. So what should providers be doing to reverse this trend? This report analyses current trends in the industry and builds on primary research with providers and their retailers to answer this question. Scope After the introductory chapter, this brief has three main sections: 'Installment Credit in Context' identifies and examines the current trends in the industry, building on a wealth of market and economic data; 'Competitive Dynamics' analyses the key market players and builds on Datamonitor's B2B survey to investigate retailer attitudes to finance providers; 'The Future Decoded' provides scenario based forecasts for the market based on Datamonitor's in-house consumer credit forecasting model. Report Highlights The market for installment credit has struggled in recent years; balances outstanding fell at an average rate of 5.7 per cent in the period 1999-2003, while the wider consumer credit market boomed. This brief analyses how low base rates and competition from other lending products have contributed to this decline. Data collected for Datamonitor's exclusive B2B retailer survey found that quality of service is becoming increasingly important to retailers. Datamonitor found that, while product ranges are good, installment credit providers could improve their service in a number of areas. Reasons to Purchase This brief provides unique and valuable information on the installment credit market allowing you to exploit the potential of this market. Datamonitor’s expert opinion on the future direction of the market gives you a competitive edge by enabling you to plan your strategy with confidence. Report Highlights In recent years installment credit has struggled in the face of competition from personal loans and credit cards. However, Datamonitor's in-house model forecasts five year growth for the market under three different economic scenarios. Table of Contents TABLE OF CONTENTSABOUT DATAMONITOR 2 CHAPTER 1 INTRODUCTION 7 What is this report about? 7 Who is the target reader? 8 How to use this report 8 CHAPTER 2 INSTALLMENT CREDIT IN CONTEXT 9 Introduction 9 Sizing the installment credit market 10 Balances outstanding: a steady decline 10 Gross advances tell a similar story 11 However, the consumer credit market is booming 13 Factors behind these trends 15 Strong competition from credit cards and personal loans 15 Personal lenders target the non-standard market 20 Unfavorable media coverage 20 The victim of a booming retail sector? 22 Conclusions 23 CHAPTER 3 COMPETITIVE DYNAMICS 25 Introduction 25 Competitive Landscape 25 Market developments 25 Competition within the installment credit market 27 Acquiring retailer custom 30 Acquiring new custom is problematic 30 Retaining retailer custom 36 Are retailers satisfied with the service they receive? 36 Does retailer satisfaction lead to retailer loyalty? 37 How long do retailers stay with their finance providers? 38 Which service aspects are most important to retailers? 38 How can retail finance providers improve their service offerings? 40 Has cross selling to the end consumer reached its peak? 49 The cross sale of other finance products has become widespread 51 Conclusions 51 CHAPTER 4 THE FUTURE DECODED 53 Datamonitor’s forecasting view 53 Under a neutral scenario, installment credit grows modestly 54 The installment credit market shows some growth 55 Installment credit will grow slowly under an optimistic scenario 58 Growth will be modest 59 Installment credit will remain flat in a downturn 62 Gross advances show marginal growth 62 Conclusions 66 Summary of forecasts 66 The Datamonitor View 67 What are the options for installment credit providers? 68 APPENDIX 70 Datamonitor’s research methodology 70 Datamonitor’s loans and credit forecasting methodology 70 Datamonitor’s UK Retail Finance 2003 B2B survey 71 Supplementary data 73 Data tables relating to Chapter 2: Installment Credit in Context 73 Data tables relating to Chapter 3: Competitive Dynamics 75 Definitions 88 Further information 89 Relevant links 89 Relevant Datamonitor publications 90 Future Datamonitor publications 91 Datamonitor Financial Services Consulting 91 SPP writing team 93 How to contact experts in your industry 94 |
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