Finding the competitive strength of the sales outlet
In recent years retail enterprises have had to weather great changes to remain profitable. However, the pressure from worldwide competition, e-commerce and clients’ omnichannel orders is not letting up. Only the margins are crumbling.
Optimization of performance is of essential importance for the whole enterprise, from the internal processes to the supply chain, from the engagement of personnel to renewal in terms of resources.
Ayming’s consultants offer not only their experience and knowledge of the sector, but also a new approach and a specialized expertise. This combination can obtain quantifiable results that will improve our clients’ performance. We help you to accelerate your growth and to anticipate future challenges.
Labour costs, challenge number 1 of the sector: save more than 200 euro per employee per year
Regarding labour costs the Belgian distribution players have a competitive handicap of 3.8% to 6.6% (excl. VAT) compared with their Dutch sector colleagues.
Besides the personnel in the R&D departments our experts calculate possible average savings of up to 206.22 euro per employee based on the results for 2018.
Two main reasons: distribution companies often make use of low-skilled personnel, so they can apply for large reductions on the “target group” employers’ contributions. As their name indicates, these reductions concern target groups of employees, for example young low-skilled employees. The sector is also characterized by a rapid turnover of personnel encountering clients, which increases the need to apply this support.
According to our data the possible savings on the annual amount of the labour costs come to 0.40%, which has a direct influence on the operational result. So, for instance, resources could be freed up for projects and training to further develop the client experience and, a crucial challenge in the sector, the experience of the worker.
Digitization, an unexpected goldmine of financing to protect the activity
In 2018 online purchases were made in Belgium for about 12 thousand million euro. The increasing popularity of e-commerce is a big challenge for the traditional distribution players. There is much investment in the development of a webshop and management of the logistics chain. Each year some 4% of sales is lost because of goods being sold out. The new technologies (big data, artificial intelligence, biometric authentication, augmented reality, etc.) also require substantial investments in R&D. These projects make it possible to apply for government support for employment and innovation subsidies. Where, then, is the challenge? The challenge is to turn digitization into a competitive advantage!
The emergence of phygital, which aligns digital channels and physical sales outlets, requires a mutation of the sales outlets that must raise the client experience to a higher level. At present more than half of the consumers in Benelux combine online shopping with shopping on the High Street, with the online channel here representing 20% of total purchases. In order to increase the power of attraction of its sales outlets, a brand must place the emphasis on training and instilling loyalty among its personnel, and on more flexible working hours. An audit of all the dimensions of a phygital project can help to optimize the available support mechanisms, such as the partial exemption from payment of the withholding tax on wages for the IT personnel or data scientists involved in digital projects.
Business performance, main concern of the Retail sector:
Bringing all these mechanisms together could appreciably increase the advantages. For just one of our clients, a leading specialized distribution mark, the generated savings were estimated at 328.400 euro.
Our experts in HR or financing costs identify all the levers your enterprise can use, with the protection of your activities.
Consult our offer for financing innovation for the Distribution sector
Download our brochure on retail and read our case study:
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