Time to cash in for the retail industry
The retail industry is one sector where cash remains king and will continue to be ubiquitous for years to come. Yet despite this, the domain of cash management still remains a major challenge for retailers with cash being expensive to process and secure.
The increased focus on optimizing cash to drive efficiencies is highlighting how trapped cash can become a real hindrance, negating a retailer’s ability to fully put it to work. Cash can sit idly in registers and in cash rooms where its potential for investment, debt repayment or business expansion cannot be realized, thereby negatively impacting their working capital position. This is providing the catalyst for market leaders to look at new ways to manage store cash and overcome this challenge.
Although cash as a percentage of total sales is declining, managing store cash will remain a challenge for retail financial managers because the dollar volume of overall retail sales is rising, creating a net increase in cash usage. There are several contributory factors here; nearly half the U.S. population does not hold a credit card, one in five Americans does not hold a debit or credit card and judging by most recent data, 17 million Americans do not have a bank account.
Here we examine the trends impacting the management of coin and currency in the retail industry and explore new technology solutions aimed at improving retailers’ efficiency and reducing costs.
Current in-store management of cash and coins presents major hurdles for retailers. In many stores, employees manually count, recount, process and secure cash and continue to physically transport daily receipts to a local bank branch. Unfortunately, this timeworn approach addresses none of the challenges of increasing efficiencies or optimizing cash. On the contrary, this creates additional risk. Furthermore, with many bank branch networks being streamlined today, depositing at a branch will become increasingly inconvenient. The other option is the use of traditional cash vault services, where retailers contract armored carriers to transport store receipts to the bank each day, which can help to manage risk but clearly has drawbacks. All of these tasks can be expensive, time-consuming and prone to error and loss. Envelope Processing is another traditional vault service used by some retailers to reduce employee cash handling where store employees place register contents into envelopes that are sent to the bank by armored courier for counting and deposit.
The treasury evolution
Like most sectors today, retailers are focused on improving efficiencies, reducing costs and enhancing information management. Increasingly, new technologies are helping to revolutionize the way retailers operate and making a major contribution to significant long-term savings. This is enabling retailers to improve efficiencies, reduce costs, provide faster access to funds, mitigate risk and help free their staffs from certain duties to enable them to spend more time on customer service and focus on sales. By more effectively managing store cash, retail treasurers can achieve a number of working capital management objectives.
A holistic and more automated approach to cash management can enable retailers to eliminate trapped cash in-store. The physical aspects are being replaced by electronic processes, facilitating all transactions to be recorded and armored carrier fees and the risk of theft to be reduced. Additionally, retailers can gain faster access to funds and ensure they have greater visibility of their overall cash position. Some solutions even go as far as replacing client funds in the stores with bank-owned cash, thereby completely eliminating trapped cash. Increasingly, cash recycling is seen as offering the solution to retailers’ cash challenges. By combining new technologies leveraging smart hardware and software with more traditional retail practices, such as armored carrier pickups, cash ordering, same-day provisional credit on deposits, retailers’ cash management operations are beginning to be transformed.
In a challenging global economy, retailers are under pressure like never before as consumers continue to be reticent about dipping into their pockets to spend their hard earned cash. Retailers are increasingly focused on driving the business in ways which make an impact on the bottom line. The growing impetus to drive new ways to better meet the customers’ needs has perhaps been pursued by retailers at the expense of the infrastructure that supports and collects the results of this activity. Ultimately, the currency driving profitability in the retail sector is sales. As retailers explore new solutions to increase efficiency, reduce costs and free up their staff to focus on revenue-generating activity, these businesses are equipping themselves with the potential to transform themselves. By optimizing their working capital management and significantly cutting costs, this is further helping their businesses to thrive. At a time when the value of cash payments in the U.S. is expected to rise further, retailers need to ensure they capture every opportunity.
Joan Brancaccio is director of deposit products for Bank of America Merrill Lynch.
The Container Store upgrades mobile site
The Container Store has turned to Usablenet, a mobile and multichannel technology provider, to upgrade its mobile Web site so the retailer can provide its customers with a seamless mobile shopping experience.
The company reports an increase of 62% in mobile site traffic to its site in the past year, and anticipates further growth this year. The Container Store sought to offer its customers a more engaging mobile experience by offering them more features from the desktop on their mobile devices. The retailer also wanted to strengthen visual navigation and social integration.
The new mobile experience is backed by U-Control, Usablenet’s content-publishing tool, which allows the Container Store to quickly refresh site banners, mobile promotions and navigational icon links.
The upgrade gives customers the ability to share products from the site on Twitter, Facebook, Google+ and other social networks. The advanced mini-cart allows customers to access items in their shopping carts via an overlay that does not navigate away from the page they are on. From there, they can choose to proceed to a streamlined checkout or to return to the page they are browsing. The upgrade also features mobile hot-spot technology that enables the retailer to highlight a greater number of products and provide customers with suggestions on related items they might also like to purchase.
"Our goal with this updated mobile site is to offer our loyal shoppers a deeply engaging and socially integrated experience with our brand," said Jessica Coogan, online marketing director for the Container Store. "Usablenet’s technology allowed us to implement features previously found only on the desktop site — such as banners and homepage icons — that we can switch out at a moment’s notice to constantly provide customers with new, real-time items and special deals. We are pleased with the site’s enhanced navigation functionalities and anticipate strong growth in mobile traffic and conversion as a result."
"The Container Store recognizes the importance of mobile in engaging customers and keeping the brand relevant," said Carin van Vuuren, CMO of Usablenet. "In doing so, they wanted a mobile site which gives customers more control over how they can browse, shop, and share. In short, the Container Store wanted to make the mobile experience as personalized as possible. We’re proud to be a partner and to help achieve their business and brand goals on mobile."
The Container Store was founded in 1978. The Dallas-based retailer offers storage and organization products.
Red Legacy gets senior director of new business development
KANSAS CITY, Kan. — Red Legacy, a commercial real estate developer for shopping centers, has hired Stacy Scheelk as its new senior director of new business development.
Scheelk is a shopping industry expert with a background in local, regional and national business development and marketing. She will be charged elevating and maximizing the potential of each development by fomenting partnerships, securing sponsorships, creating specialty retail and increasing ancillary income.
She is an accredited certified marketing director as awarded and credentialed by the International Council of Shopping Centers, the premier global trade association of the shopping center industry. Her career in the shopping center industry spans 13 years, with 10 of those years in director and regional leadership roles. Scheelk started her career in advertising with Federated Department Stores and moved to the role of marketing director for national retailer Scandia Down. In 2000, Scheelk assumed the position of marketing director for a super-regional mall in Overland Park, Kan., managed by Copaken White & Blitt. She became the senior marketing director for CBL & Associates Properties in 2005 and later the regional director of brand development in 2008, overseeing the portfolio’s Dallas region.
In her new role with Red Legacy/Legacy Asset Management, she will work closely with shopping center or mixed-use properties, including Legends Outlets Kansas City in Kansas City, Kan., Truman’s Marketplace in Grandview, Mo., Ward Parkway Center in Kansas City, Mo., the Streets of Brentwood in Brentwood, Calif., and Three Springs at Shiloh in Shiloh, Ill.