However, in times of need, it’s traditional money management methods that consumers turn to.
Globally, cash payments still account for at least 20 per cent of all retail transactions by value. In some countries, 80 per cent of transactions are cash as shoppers often trust cash above all else when it comes to quick secure transactions and money management.
Whereas consumers see cash as a convenient payment type, retailers are often focused on investing in electronic payment methods to provide more innovative ways to take transactions and control money management.
As a result, many retailers are distracted away from investing in the cash aspects of their business, meaning that they are potentially missing out on relatively low-risk money management opportunities to streamline their cash operations and refocus valuable human resource back to delivering customer service.
So how can retailers make cash work for themselves and their customers” The answer lies within their existing business: take inspiration from the supply chain.
Retailers already have a wealth of supply chain management expertise and it can be argued that the most successful, responsive and competitive are those that have embraced and addressed the challenges of optimising their supply chain.
This experience can be used to optimise the money management throughout their organisation for cash. After all, like products, cash can be considered as another valuable asset that needs to be managed as effectively as possible.
Turning inventory improves profitability and the same is true for cash. Accelerating the movement of cash moving through the business has a direct impact on bottom line performance.
The retail cash chain
This concept of treating money management of cash like a supply chain is what we like to call the ?Retail Cash Chain?. Like any manual system, there are going to be inaccuracies and inefficiencies within it, but with the right care and attention, these can easily be ironed out.
One good example of this is the way that bricks-and-mortar retailers manage cash ordering and handling. The more drops, pickups and movements that are made to manage cash within a business, the more disruptive and costly it becomes.
Equally, it poses a greater security risk, both from the store associates processing those collections and the security teams delivering and taking cash away to the cash centres.
By implementing a robust, automated money management solutionfor cash, cash shrinkage would be reduced for businesses and, in some cases, eliminated.
There are two relatively straightforward money management methods to reduce the volume of cash ordering and handling within a retail organisation.
The first is better forecasting through greater visibility of their cash positions; if retailers have the foresight to know exactly how much cash they will require on a given day, they can be more considered in their order processes, aiming to reduce the number of interactions without compromising the customer experience.
The second way to reduce cash movement within a business is to invest in point of sale (POS) technology with cash recycling capabilities. In addition to speeding up cash availability, making this money invisible to store employees improves security and frees their time to focus on customer service.
Another way in which many retailers particularly those in regions such as the Netherlands and the US are improving their Retail Cash Chain is by converting cash into electronic payments essentially by freeing the value of the cash from its physical location.
If technology and processes can ensure that cash is authentic and secure within the store, then new possibilities are enabled, and cash no longer has to be physically present in the bank to provide the retailer with provisional or same-day credit.
One of the essentials for this same day conversion is a secure cash deposit or recycling device in the store, and the ability to send cash holding information to the bank daily, for reconciliation. In return, retailers receive improved liquidity and working capital, and profit simply from having money in the bank earlier.
Cash has a place in the 21st century
As these examples show, the combination of technology and smarter working processes are empowering retailers to make cash pay its own way.
By viewing the movement of cash through their business as an integrated system, rather than just seeing cash as an old-fashioned and ineffective payment mechanism, they can iron out inefficiencies and make incremental gains across their retail cash chain.
Optimising the processing of retail cash can offer some quick wins to businesses, as well as setting them up for a more profitable relationship between themselves, cash and the consumer. And over time, those profits can be used to fund wider business investments.
Sion Roberts is EVP of global retail at cash technology expert Glory