Dynamic discounting innovation gives companies a competitive edge

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By Amanda Mathes, Managing Director, C2FO

As a mother of three, convenience is king when it comes to shopping. I had one objective in mind for my last retail store trip: buy a pair of running shoes. That’s it! With three children under 7 in tow, I ended up leaving with a Dora the Explorer nightgown, Pokémon pajamas, and a headache. No shoes. It was time to order online.

That’s why it doesn’t surprise me to learn that Amazon’s sales increased a whopping 28% last quarter. Consumer retail spending is at its highest point in more than a year according to a recent Wall Street Journal article citing the April 2016 Advance Monthly Sales for Retail Trade and Food Services report from the US Department of Commerce. However, brick-and-mortar retail chains are closing dozens or even hundreds of stores as they struggle to counter falling earnings.

Skeptics may point to the fact that e-commerce sales still only represent a small percentage of overall retail sales. In the US, online sales represent 7.5% of retail spend. The Centre for Retail Research showed that the online share of retail trade in the UK was 15.2% in 2015, with a 9.4% mean for Europe as a whole. The National Bureau of Statistics in China reported that country’s online retail sales at 12.1% of total retail sales last year.

The fact remains that online sales are growing as a percentage of retail sales worldwide. That means the traditional retailers that still dominate the retail space need to take immediate strategic steps to increase their competitiveness.

Innovation is a major competitive edge for online retailers. Beyond just the convenience of their internet platform, major web-based retailers also have the advantage of newer and more streamlined processes throughout their supply chain, including dynamic discounting.

Long-established retailers are often saddled with outdated processes that affect finance, treasury, procurement and accounts payable alike. This makes it more difficult for them to keep up with e-commerce retailers and with some of their more progressive brick-and-mortar competitors.

So it makes sense that the most forward-thinking traditional retailers are looking to technology and innovation to gain traction. Our CEO likes to call this the “Giraffe Effect,” where smart businesses are willing to stick their necks above the tree line to see what they need to do to get ahead.

C2FO provides benefits for top retailers around the world including Costco Wholesale, Nordstrom, Walgreens and Toys“R”Us. Our working capital market allows buyers and suppliers to collaborate on early cash flow at a rate that’s profitable for both.

Just look at the year-over-year income growth that three C2FO retail customer markets have experienced:

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This isn’t a new idea that only bleeding-edge companies are putting into practice. C2FO is an established platform used by numerous Global 2000 companies across key industries including retail, industrial, manufacturing, energy, healthcare, technology, telecom and transportation, to boost their bottom line.

Back in 2014, Motley Fool cited Costco Wholesale’s partnership with C2FO as a factor in the retailer’s competitiveness compared to other retailers. In fiscal 2Q16, Costco Wholesale reported a 2.6% net sales growth and a 19% growth in online sales during the same period.

C2FO retail customers leverage innovation to achieve key objectives including:

  • Reducing their cost of goods, which in turn improves EBITDA, gross margin and EPS.
  • Generating higher returns on cash.
  • Improving their supply chain health by helping their suppliers get much-needed working capital.

In fact, two of the supply chain leaders from the Gartner 2016 Supply Chain 25 list are C2FO customers. When it comes to competing in today’s retail space, supply chain innovation isn’t just nice to have, it’s essential.

So while I seemingly can’t manage to buy a pair of shoes, here is something I can do: show you how our global customers are using C2FO to drive all of these benefits and more.