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Retail industry mega trends 2018 risks and opportunities Retail Cash management Conference 8 May 2018 Adela Ciucioi, Partner KPMG Romania

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  • Retail industry

    mega trends 2018risks and opportunities

    Retail Cash management Conference

    8 May 2018

    Adela Ciucioi, Partner KPMG Romania

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    2Retail Trends 2018 | 2© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG

    International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    Contents

    1. Retail mega trends

    2. Addressing typical risks in the Cash Management process

    3. New opportunities

    Appendix 1- KPMG data driven propositionAppendix 2- PSD II

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    3Retail Trends 2018 | 3© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG

    International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    Contents

    1. Retail mega trends

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    4Retail Trends 2018 | 4© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    Top five retail trends for 2018

    Ongoing

    competition

    between

    hemispheres

    Artificial

    intelligence

    will gain

    more clout

    The

    conscious

    customer New customer

    expectations

    1 The customer experience is more important

    than ever 23

    45

    © 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    E

  • The most disruptive consumer trends

    32Globa l

    Accounts

    11%Of KPMG

    Rev enue

    $3bnFY17

    Revenue

    Dec lining

    consumer

    loya lty to

    bra nds

    Inc reas ing

    preferenc e to

    shop and buy

    online

    Inc reas ing

    expec ta tion

    for im m ediate personalization environm ental

    s erv ice consc iousness

    Inc reas ing

    dem and for

    Increas ing

    soc ial and

    38% 33% 30% 29% 27%

    Source: 2017 KPMG Top of Mind Survey

    © 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International . KPMG International provides no client services. N omember firmhas any authority to oblig ateor bindKPM G International or anyother member firmvis-à-vis third parties, nor does KPM G International have any such authority to obligate or bind any member firm. All rights reserved

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    6Retail Trends 2018 |

    Retail in Romania

    (

    2005

    2001

    1996

    2005

    2001

    2005

    2011

    1995

    2003

    2011

    0.0%

    5.0%

    10.0%

    15.0%

    20.0%

    25.0%

    2014a 2015a 2016a 2017a 2018f 2019f 2020f 2021f 2022f

    Romania- GDP/capita& retail sales growth trend

    GDP/ capita retail sales

    0% 2% 4% 6%

    1

    2

    4%

    5.6%

    on line as % of retail spending

    Source: Economist Intelligence Unit

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    7Retail Trends 2018 |

    Retail in Romania

    Technology

    Consumer

    trends

    Process

    improvement Faster process

    Cost reduction

    Enhanced data

    accuracy

    New business

    New way of doing business

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    8Retail Trends 2018 | 8© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG

    International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    Contents

    2. Addressing typical risks in the Cash Management process

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    9Retail Trends 2018 | 9© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    2. Addressing risks in the Cash management process

    10.00

    Data accuracy/ risk

    of fraud

    • Automated data transfer/ system integration (e.g.: sales posting, payment processing)

    • Segregation of duties

    • User access management

    • Revenue recognition

    • Returns/ sales cancelation

    • Transfer of risks& rewards

    • Loyalty schemes

    • Managing cash collections

    Optimal cash flow

    • Inventories management (NB: system integration, data analytics)

    • Supply management

    • Logistics management( eg: Centralized platforms, store proximity supply network)

    • Financing activities

    • Budgeting process

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    10Retail Trends 2018 | 10© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG

    International have any such authority to obligate or bind any member firm. All rights reserved.

    Retail Trends 2018 |

    Contents

    3. New opportunities

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    11Retail Trends 2018 |

    3. New opportunitiesRPA&

    machine learning

    D&A

    Digital labels

    Chat bots

    AR/VR

    3D printing

    Block chain

    PSD II

    New regulations

  • Data Driven Culture

    Trusted Analytics

    Architecture & Technology

    Customer Journey

    Digital Supply Chain

    GBS &

    Back-office Optimization

    Innovation Ecosystem

    Organization & Governance

    SUPPLY SIDE

    Appendix 1 KPMG 7 strategic pillars of a data driven organization with use cases

    KPMG Data-driven propositions

    Demand Planning

    Dynamic Pricing&

    Cross-selling

    Customer Loyalty,

    Growth & Retention

    Churn Reduction

    Customer

    Feedback

    Virtual Assistants

    DEMAND SIDECustomer

    Experience

    Customer

    Segmentation

    Site Selection

    Sales Performance

    Improvement

    Supply Chain

    Optimization

    Fraud, Waste &

    Abuse Analytics

    Document

    Scanning & Handling

    Robotic Process

    Automation

    Scheduling

    Optimization

    Call Center

    Optimization

    Tax Intelligence

    Solutions

    ERP Analytics

    Contract Analytics

    HR Turnover &

    WorkforceAnalytics

    Master Data

    Management

    Cyber Security

    Strategic

    Transformation

    Cloud Services

    Data Lake

    Big Data &

    Advanced Analytics

    Startup Challenge

    Omni-channel

    targeting

    Complexity

    Management

    Network

    Optimization

    Integrated

    Business Planning

    Working Capital

    Analytics

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    13Retail Trends 2018 | 13Retail Trends 2018 |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    PSD2 - What and When?• The PSD2 should have been applied starting January 2018 and has

    the potential to bring forth a revolution in banking.

    • The PSD2 will allow third parties to access customer’s transaction

    data in the databases of banks, following an instruction from the

    customer.

    • The Third parties could be payments services providers, technology

    companies, social networks, and RETAILERS.

    • A retailer who sees the opportunity has the chance to be a real

    GAMECHANGER.

    Appendix 2

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    14Retail Trends 2018 | 14Retail Trends 2018 |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    PSD2 – What?Retailers may be able to provide 2 types of new services:

    • Account Information Services Provider – AISP.

    • As an AISP, a retailer could provide customers with an app which

    presents accessible and user-friendly analysis of their financial

    data by providing consolidated information on one or more

    payment accounts held by the clients with banks.

    • Payments Initiation Services Provider – PISP.

    • As a PISP, a retailer could provide customers with an app which

    allows them to initiate payments from their bank accounts

    without having to use their credit card

    Appendix 2

  • © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    15Retail Trends 2018 | 15Retail Trends 2018 |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.

    KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does

    KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

    PSD2-The Opportunity

    Reduce costs paid to payments services providers

    Have direct access to valuable data on customer transactions

    Added value to clients-online payments made easier; less “clicks” to pay

    POTENTIAL TO INCREASE ONLINE SALES

    Appendix 2

  • The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or

    entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as

    of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate

    professional advice after a thorough examination of the particular situation.

    kpmg.com/socialmedia

    © 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent

    firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to

    obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such

    authority to obligate or bind any member firm. All rights reserved.

    The KPMG name and logo are registered trademarks or trademarks of KPMG International. CREATE: CRT077664H.

    Adela Ciucioi

    Partner, Audit and Assurance

    Retail LOB