Redcats
Hitachi Consulting
Redcats - Risk and Reward
Summary
Hitachi was approached by redcats at a time when the home shopping market is under enormous pressure. In the ‘old days’, ‘Agents’ for the catalogue found customers, took orders and collected payments. Customers were family and friends and payment defaulting was an uncommon occurrence. Times have changed. The Internet has revolutionised home shopping, credit has never been more accessible and customers increasingly have a ‘want now, pay later’ attitude.Redcats, the UK arm of the international French owned retailer PPR (Pinault-Printemps-Redoute, owner of amongst others Gucci, YSL and Stella McCartney), and a major player in the sector, like all its competitors, was experiencing increasing numbers of customers either paying late or trying to avoid paying at all.
Over a period of 18 months, Hitachi Consulting working on a risk:reward basis with the client team, jointly designed and implemented a series of changes to process, culture, telephony and ways of working within the Redcats team who deal with late and default payments. In addition to the normal difficulties projects like this present, there was the added complication of having to “track and prove” the financial benefits to the satisfaction of both parties.
The objective of the project was to deliver a positive Profit and Loss impact that equated to 5-10% of the annual bad debt charge (an eight figure sum). Benefits of 8% were achieved, which was a greater sum than that accounted for in the annual budget by the Board. The project was rated as highly successful by both Hitachi Consulting and Redcats.
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