Is your retail business ready for the future?
The retail industry in the U.S. has faced more disruptive changes over the last decade than over the entire last century. As the retail landscape for US continues to evolve, it seems that the industry is in the middle of an unprecedented transformation. However, with market disruption comes opportunities and those retailers who can be nimble, adapt, and innovate in the face of these changes will be better positioned for success than those who cannot. As a result, traditional brick-and-mortar stores are now reinventing themselves by investing in the latest technologies to streamline their operations, integrate their billing and payment systems, inventory tracking and monitoring systems. Furthermore, challenges such as evolving demographics, rapidly-evolving customer preferences and economic volatility are also pushing retail businesses to cut costs, find new ways to offer more value, and keep pace with today’s demanding consumer.
What can we expect going forward?
Quatrro predicts that the adoption of the following key differentiators in their businesses will help the retailers to successfully counter the challenges and create a winning proposition:
1. Focus on Agility: Retailers are living in a volatile, uncertain, complex, and ambiguous world of constant disruption and the rate of change is accelerating. To adapt, retailers must be agile and rethink their business models to differentiate themselves from an ever growing number of competitors. Retailers should also accelerate innovation, by scanning ruthlessly, and seize upon those risks that can undermine its competitive advantage, market position, or long-term performance; and transform the insights into actionable, sustainable plans.
With the market becoming more fragmented, speed and agility will become a clear differentiator for retailers.
2. Invest in Quality Talent: Retailers need to hire top talent to survive and grow – and competition for that talent is fierce than ever. Start-ups are not only eating away the market share; they are also often attracting the most innovative and skilled people. Concurrently, investing in hiring HR teams and training them is fast becoming an expensive proposition for smaller discount-based retailers. Most of these organizations employ a huge amount of staff at minimum wage or on temporary employment contracts. Given that the overheads on processes like F&A and HR are exorbitant owing to the high volumes, it is beneficial for companies to turn to outsourcing to leverage industry best practices, access smart methodologies rationalize costs and streamline processes.
Outsourcing providers have proven processes to employ quality talent while keeping the overhead costs under check
3. Best-in-Breed Technology: All companies strive to meet shareholders’ growth and profit expectations – that’s the job of management. It’s particularly challenging, however, for those competing in an ultra-competitive, razor-thin margin retail environment to continue to remain competitive and meet shareholders expectations. However, the retailers can’t expect the solutions of the past to fix today’s or tomorrow’s problems. For example: In today’s context, retailers need access to a comprehensive account reconciliation solution that helps them to identify exceptions through sales and cash deposit verifications at the store level and prevent revenue leakage. Retailers must also strive for new technological platforms which enable them to streamline their Record-to-Report (R2R) cycle by creating electronic links between the POS terminals used at the store location and their accounting software. These technological platforms will also enable availability of comprehensive audit trails, effective internal controls and tracking of all exposures within a timely manner to the retailers. Retailers must also strive for a Reconciliation solution based on next–gen technological platforms which ensures minimization of fraud at POS terminals. Consequently, technology is dramatically changing the retail landscape and is compelling retailers to fundamentally rethink almost every aspect of their operations.
While this trend is not new, what is interesting for 2017 is that even though the advances in technologies available to retailers have been exponential, retailers are more and more willing and quicker to experiment, adopt and move on to the latest technologies in more creative and innovative ways.
4. Compliances & Tax Issues: As retailers continue to import goods across domestic and international borders and expand operations overseas, proper planning is critical to help navigate a wide range of tax requirements and explore opportunities for greater tax efficiency. In addition, the retailers are also impacted by evolving compliance requirements mandated by various regulatory bodies. This requires retailers to implement effective financial controls and incorporate best practices that enable effective compliance while maintaining a competitive advantage. Therefore, the retailers are turning to experienced accounting professionals who understand their businesses and can help them stay focused on their strategic objectives.
5. Access to Timely & Reliable Financial Reports: Retailers must measure and monitor almost every aspect of their business performance in order to achieve top line growth and protect margins. To do all that, they need reliable financial data quickly and consistently so that they can drive the crucial decisions that can help their business thrive. This makes it critical, now more than ever, that retailers turn to trusted service providers with deep-domain expertise who can provide them with meaningful financial analysis and business insights to optimize profitability and enhance operational efficiencies.
Each of the five trends, as highlighted above is powerful on its own, and collectively they will redefine what it takes to be a successful retailer.
Given the accelerating rate of change, what is your retail organization doing to adapt and stay relevant and competitive in the year 2017 and beyond?
While retailers may not feel adequately equipped to handle the financial processing for their business, as it’s not their core competency, they will still want to ensure that they can track and monitor their cash flows as well as financial health in a timely and accurate manner. In such a scenario, partnering with an established outsourcing provider will enable retailers to augment operational efficiencies, increase productivity and reduce costs. Retailers also gain access to technology, analytics platforms, domain expertise, agile, intelligent processes and platforms offered by the outsourcing provider.
Quatrro specializes in providing cost-effective finance and accounting solutions that meet the retail industry’s specific requirements. Our comprehensive range of accounting and financial reporting services ensures that our clients receive accurate, high quality financial reporting and provides them with peace of mind that they are in full compliance with all industry specific regulations.