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Report: Mobile subscriber context data could generate $44 billion a year

BY Dan Berthiaume

Tampa, Fla. — The global market for advanced services based on mobile context insights could be worth as much as $44 billion annually. A research report for Syniverse from economists at the Surrey Energy Economics Center (SEEC) values the market for operators providing services to brands based on end-user context data and proposes a sustainable long-term market structure with balanced, mutual benefit between operators, brands and consumers.

Mobile context is the insight into subscriber information, behavior and location that is available to operators and that can be offered to brands for the purpose of improving customer engagement and experience, resulting in increased brand loyalty and revenue. The economists at SEEC worked with Syniverse to model and value the mobile context opportunity and identified two distinct markets: context by geo-segment and context by individual.

• Context by geo-segment: Operators provide information about anonymous subscribers in specific locations to brands targeting precise geo-markets. The value of this model is calculated to be as much as $44 billion to mobile operators annually.

• Context by individual: Operators offer highly specific individual subscriber data to a single brand partner to provide tailored offers or information. The varying characteristics of particular vertical markets complicate the valuation of this market overall, but the opportunity may be worth even more than the context-by-geo-segment market. Calculations around just one use case, “Location-Based Fraud Services,” suggest a global opportunity for operators of $3 billion annually.

The optimum business model for the exchange of mobile context identified by SEEC is a “platform” market where insight from multiple operators is aggregated onto a single, neutral, trusted platform serving as a market maker. In the context-by-geo-segment market, brands could bid in an auction for segments of time for the exclusive right to deliver information to groups of subscribers in an audience. In the context-by-individual market, brands could target specific subscribers based on usage, demographics, location profile and more for specific uses.

In the future, the report predicts that evolved and highly personalized mobile context insights may be worth much more, depending on consumers’ willingness to opt in and engage.

“Mobile context is the key to unlocking the full potential of mobile for consumers, the companies they trust and the operators that serve them,” said Jeff Gordon, president and CEO, Syniverse. “But while the revenue potential is phenomenal, success is dependent on delivering mutual benefits to all three parties. Operators can access new markets and deliver enhanced subscriber experiences, expanding their position in the mobile value chain. Brands can embrace new engagement capabilities, enhancing customer relationships with unrivaled targeting. And consumers can gain new mobile experiences tailored to them as individuals, with stringent controls over their privacy and preferences.”

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Lowe’s delivers in Q4 despite severe winter weather

BY CSA STAFF

Severe winter weather was no match for Lowe’s in the fourth quarter. The company reported sales of $11.7 billion, up 5.6% from the same quarter last year, as comps increased 3.9%.

The company also posted fourth-quarter net earnings of $306 million, up 6.3%.

"During the quarter, we delivered solid performance in core home improvement categories, balancing softer sales of seasonal gifts and holiday decorations,” said CEO Robert Niblock. “When extreme winter weather arrived late in the quarter, our distribution network responded quickly and efficiently to move product where it was most needed.”

For the full year, sales reached $53.4 billion, a 5.7% increase over 2012 sales. Comps for the year finished at 4.8%, as net income surged16.7% to $2.3 billion.

Looking ahead, Lowe’s expects total sales for fiscal 2014 to increase about 5%, and comparable store sales to increase about 4%. The company expects to open about 15 home improvement stores and five Orchard Supply hardware stores.

Niblock added that he was pleased with the progress Lowe’s made during 2013 and that the retailer continues to “transform.”

As of Jan. 31, Lowe’s operated 1,832 stores in the U.S., Canada and Mexico.

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Target data breach may affect future profits

BY CSA STAFF

Target continues to cope with the fallout of a data breach, which, as expected, hurt the company’s fourth-quarter results.

The company incurred $61 million in expenses related to the breach during the quarter, but was able to bring the total impact to $17 million after applying a $44 million insurance payment.

But the retailer added that it is not only unable to estimate future expenses related to the data breach but also warned that those costs may adversely affect operations results in the first quarter and full-year 2014 and future periods.

Expenses may include payments associated with potential claims by the payment card networks for alleged counterfeit fraud losses and non-ordinary course operating expenses (such as card re-issuance costs), REDcard fraud and card re-issuance expense, payments associated with civil litigation, governmental investigations and enforcement proceedings, expenses for legal, investigative and consulting fees and incremental expenses and capital investments for remediation activities.

“For more than 50 years Target has succeeded by focusing on our guests,” said chairman, president and CEO Gregg Steinhafel. “During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales. However, results softened meaningfully following our December announcement of a data breach. As we plan for the new fiscal year, we will continue to work tirelessly to win back the confidence of our guests and deliver irresistible merchandise and offers, and we are encouraged that sales trends have improved in recent weeks.”

Net earnings dropped to $520 million from $961 million in the prior-year period. Sales decreased 6.6% to $20.9 billion from $22.4 billion last year, reflecting the impact of an additional accounting week in 2012 as well as a 2.5% decrease in comparable-store sales, partially offset by the contribution of new stores.

Target operates 1,917 stores: 1,793 in the United States and 124 in Canada.

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