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The Game-Changing Role of Incentive Compensation Automation in the Retail Industry

Woman paying with smart watch in store

In the dynamic world of retail, staying ahead means adapting to evolving customer expectations and embracing innovative solutions. The era of omnichannel retailing has ushered in demand for seamless, personalized shopping experiences, compelling businesses to think outside the box to support seamless experiences and minimize friction by providing the right product at the right time in the right place. Moreover, recognizing the intricate dance between employee satisfaction and customer experience, businesses are weaving a narrative where a better employee experience becomes the cornerstone for elevating customer delight.

At the recent NRF event, the world’s largest retail conference, the mantra of “adjust and adapt” echoed through the halls. AI and digital acceleration took the center stage, making innovation the heart of the conversation. Retailers also highlighted a crucial focus on a motivated workforce, emphasizing how an empowered workforce is critical to delivering exceptional customer experiences.

In a landscape challenged by high turnover rates, retailers showcased their commitment to navigating complexity through strategic investments in their most valuable asset – their people. One of the pivotal elements that drives employee motivation and engagement in the retail industry is incentive compensation, where associates are often paid on commission.

During NRF, Daniel Jasper from Neiman Marcus shared insights into how incentive compensation automation transformed the company’s commission payment process. With over 40 stores and a complex commission structure, Neiman Marcus faced challenges in managing incentive compensation. Its previous incentive management system was cumbersome and complex, which led to errors, delays, and frustration among sales associates. Implementing the SAP SuccessFactors Incentive Management solution helped streamline the process, providing real-time monitoring of commission calculations. This allowed Neiman Marcus to identify and resolve issues proactively, resulting in improved accuracy and timeliness of commission payments. “Rather than waiting to hear from associates that something is wrong, we can monitor the calculations in real-time and resolve issues in advance,” said Jasper. This shift has been a game-changer for Neiman Marcus, driving better sales and revenue growth.

Empower sales teams with the tools they need to create effective sales experiences

SAP SuccessFactors Incentive Management is one of the sales performance management solutions in the SAP SuccessFactors portfolio, and it offers a sophisticated platform for tailoring incentive programs to suit the unique needs of retail associates. With powerful analytics, embedded intelligence, and built-in workflows, this solution can revolutionize compensation management. Its intelligent design can not only foster trust but also ignite motivation among store associates. Through a user-friendly mobile app, retail customers can enjoy a comprehensive and easily accessible view of both store and individual performance metrics, promoting transparency and a unified understanding of team dynamics and trends. Personalized recommendations, relevant insights, and interactive monitoring help enhance the user experience, while the mobile app helps ensure that store associates can access their incentives anytime, anywhere, from any device.

The solution’s agility helps facilitate a swift rollout of new and updated compensation plans, offering the flexibility to manage broadly or tailor plans to individual needs. With a steadfast commitment to accuracy and traceability, associates can trust the fairness of calculations, fostering a positive work environment. The effective dating functionalities help further empower organizations, allowing seamless management of associate promotions and transfers.

“Retail businesses more than ever need the ability to design and manage incentive plans that align with ever-changing organizational goals, with a focus on store-level personalization and granularity that allow for improved accuracy and timeliness of commission payments,” said Rahul Iyer, general manager of Sales Performance Management at SAP. “With SAP SuccessFactors Incentive Management, retailers can incorporate key performance indicators, such as sales per hour and units per sale, into their incentive structure. The mobile app can provide visibility and transparency into individual and store performance, effectively motivating and ensuring optimal performance from their associates.”

In essence, SAP SuccessFactors Incentive Management emerges as an indispensable tool, helping to empower retail customers to optimize workforce performance and drive sustained success. Displaying key performance indicators and incentives has proven to be a game changer, helping to drive focus on store and individual performance. The result? Associates are more attentive to customers, guiding them through purchasing decisions and enhancing overall satisfaction.

In the always-changing retail world, success comes down to three things: using better technology, having happy employees, and keeping customers in focus. The story of Neiman Marcus proves that automating incentives can be a game changer. It shows how a motivated and well-connected team can not just boost how things work but also bring in more sales and money.

To stay ahead in retail, you need to be ready for change and invest in both tech and your team. This is a clear lesson for retailers planning for the future. Learn more about how sales performance management can simplify the retail industry. To learn more about how sales performance management solutions can support your organization, visit the sales performance management product page on sap.com.


Kevin Coxwell is vice president of GTM for Sales Performance Management at SAP.

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