Automate and Extend Your Retail Business Growth
Retail industries across the globe are at the cusp of unprecedented transformation and they are undergoing an expansion and innovation to make an impact in this pandemic situation. Retailers are in need of an end-to-end revenue innovation when it comes to acquiring new customers and engaging in a better way with existing customers and pushed to reduce the cost of operations at all turns.
There is a clear shift in customer demands. Consumers demand new levels of value such as dramatic technology delivery and real-time customer service. In 2020, McKinsey & Company reports that 46% of U.S. customers have switched brands or retailers. In this unstable market landscape, it has become necessary for retailers to offer different value propositions and fundamentally change their legacy business strategy.
3 Major Steps Of Retail Digitalization
To thrive in a future of a fully digitized retail environment, retailers will need to reimagine the very nature of the way they do business. In order to compete with the digitally native retailers, the threefold change in the core operation is essential.
Modernizing the existing billing and revenue infrastructure is the first step toward digitalization and thus optimization of the end-to-end business.
Traditionally, a large number of payment and account reconciliations are processed manually and repeatedly by financial personnel. When dunning and reconciliation processes are standardized and well structured, it becomes easier to handle the mass data of millions of customers.
Business Diversification For Recurring Revenue Management
As the business environment becomes more intricate and expanding, it is crucial for retailers to navigate complex partnerships. When large joint
ventures are involved, financial flows are heavily affected. Retail industries are grappling with the issues of poor revenue recognition and revenue leakage, which erodes the business partnership and revenue sharing on a large scale. By managing key elements such as the merchant’s monthly subscription fee, usage-based billing, recurring commission, partner payouts, new revenue plan, referrals, and entitlements, digitalization makes business more streamlined.
Disrupting the business from the ground up improves a retail company’s value proposition. A flexible consumption pricing model brings in revenue innovation, provides predictable, recurring revenue streams and thus improves customer retention rate.
How To Handle Payments And Receivables In Retail?
Tracking the massive data such as credit limits, payment terms, discounts and tax rates is an enormous task. Reviewing the credit approval process on a regular basis, for example, takes immense effort.
SAP BRIM offers optimized, state-of-the-art revenue innovation solutions to streamline accounts receivable processes. The solution can handle mass data and help you track the number of invoices past due, unapproved discounts, unreconciled items, and collection rates. This level of visibility will position retailers to track cash flow on an ongoing basis.
Reduce DSO (Days Sales Outstanding) And Track The Dunning
DSO is one of the most important key performance indicators (KPI) to measure the credit and collections processes in a retail company. According to SAP Performance Benchmarking, when accounts receivable is empowered to track short payments and alert staff of recurring issues, there will be a 27% decrease in DSO.
Along with this, SAP BRIM establishes a coherent dunning system across entities to track creditworthiness, dunning levels, evaluation of dunning process, and dunning history.
Payment Flexibility To Retail Customers
SAP BRIM provides flexible payment options to customers, including installment plans, deferred payments, and split payments. It enables retailers to efficiently handle multiple monetization models such as flat subscription, outcome-based, standard tiered pricing, and volume-tiered pricing.
Rapidly changing customer preferences and new competitors are pushing businesses to find always-on revenue streams. Unlike the current practice of verticalizing the business models in a single industry context, SAP BRIM’s billing and revenue solutions address retail consumers’ personal outcomes holistically, leveraging the platforms with new customer offers across industry boundaries.