The EU comes to the rescue of the retail sector

In order to support one of Europe's key economic sectors, the European Commission has drafted a series of practical and effective best practices and recommendations to help member states formulate their retail policy.

Nearly one in ten people works in the retail sector, which comprises more than 3.6 million companies. Retail generates 4.5% of the EU economy's added value, and absorbs up to one third of household budgets. It is an important source of economic vitality and a leading employer, but retail is experiencing tough times. Between the power grab by large store brands and the expansion of digitisation (via e-commerce), competition is rampant for small retailers. Yet the potential of the sector remains huge for retailers who manage to embrace change, especially with regard to evolutions in consumer behaviour and the way products are bought (and sold). This is a vital test for the fabric of the EU economy and its labour market.

A guide for national authorities

The EU appears to have grasped this, since the Commission has just published a best practices guide to modernising and revitalising retail. "Facing the future" contains advice and success stories and is designed to be instructive. Its primary function is to provide help and support to local and regional authorities in member states, enabling them to implement measures promoting innovation, productivity and competitiveness in the retail sector. They can then create a favourable climate for their SMEs (often very small, family firms) to continue to grow by seizing the opportunities of today, especially those offered by technology.

Progress needed in a range of areas

The Commission has identified three major aspects of retail where member states can make progress in this regard. Firstly, it wants the creation of retail outlets to be made easier, especially by reducing undue or disproportionate charges and by simplifying the procedures involved. Secondly, EU countries are encouraged to alleviate restrictions associated with the day-to-day operation of stores. These concern the promotion of sales and discounts, own sales channels, opening hours, specific retail taxes, carrying out transactions within the EU, etc. Finally, the Commission is urging member states to adopt innovative solutions to support the vitality of city centres.

One guide, six measures

"Facing the future" highlights six measures that local and regional authorities should put in place to achieve this:

  1. Improve digital and public infrastructure, in particular in order to encourage retailers to take on board new technologies.
  2. Share the "right" kind of information with retail outlets, in societies where data is becoming an increasingly essential tool.
  3. Help to build strong communities based on working together.
  4. Remove the barriers to working with digital technology, to help retailers remain competitive and adapt to changes in the market. The Commission identified Digital Wallonia's "Commerce Connecté" project as an example.
  5. Support the development of knowledge and skills, especially with regard to new technologies and improving the customer experience.
  6. Provide guidance on marketing and communications to help retailers enhance their profile.

It should also be noted that the document highlights the "Shopping in Flanders" strategy put in place by the Flemish government in 2012. As a final point, the guide suggests a method for assessing the current national situation in the sector, and a process for evaluating the impact of measures in place.

To find out more, read the "Facing the future" guide.



Export plans? Make sure you talk to our experts first

To prepare your international adventure properly, ask yourself the right questions and talk to people who have done it all before: partners, customers, fellow exporters and experts.

BNP Paribas Fortis listens to the questions asked by international entrepreneurs and offers reliable advice. "A lot of exporting companies ask for our help when it's too late", Frank Haak, Head of Sales Global Trade Solutions, says.


Entrepreneurs with little export experience are often unaware of the bigger financial picture. So what do they need to take into account when they set up a budget for their export plans?

Frank Haak: "Budgeting and pricing are affected by a lot of crucial factors: working capital, currency exchange risks and currency interest, prefinancing, profit margins, insurance, import duties and other local taxes, competitor pricing and so on. We always advise customers or prospects to start from a worst-case scenario. Quite a few companies are insufficiently prepared for their first international adventure: they see an opportunity and they grab it, but quite often disappointment and a financial hangover are not far away.

Our experts have years of export experience and the BNP Paribas Group has teams around the world. This means that we can give both general and country-specific tips. Let's say a machine builder wants to design and manufacture a custom-made machine. We recommend including the machine's reuse value in the budget: can this machine still be sold if the foreign customer suddenly no longer wishes to purchase it or if export to that country becomes impossible due to a trade embargo or emergency situation?"


What type of companies can contact BNP Paribas Fortis for advice?

Frank Haak: "All types! Entrepreneurs are often hesitant to ask for advice. Sometimes they are afraid that it will cost them money. However, the right advice can save them a lot of money in the long run. For example, we recommend a letter of credit or documentary credit to anyone exporting goods to a foreign buyer for the first time. This product is combined with a confirmation by BNP Paribas Fortis to offer the exporter the certainty that it will receive payment when it presents the right documents and to assure the buyer that its goods or services will be delivered correctly."


The consequences of not seeking advice: what can an exporter do in case of non-payment without documentary credit?

Frank Haak: "If you are not receiving payment for your invoices, the counterparty's bank can be contacted in the hope that it advances the payment on the customer's behalf. However, we shouldn't be too optimistic in that respect: the chances of resolving the issue without financial losses are very slim. Once you have left your goods with customs, you usually lose all control over them. Hence the importance of good preparation: listen to and follow the advice of your bank and organisations such as Flanders Investment and Trade (FIT). It will protect you against a whole host of export risks."


BNP Paribas Fortis

  • is the number one bank for imports (approx. 40% market share) and exports (approx. 25% market share) in Belgium (according to the statistics of the National Bank of Belgium): it offers advice/financing and can help you to discover new export markets through trade development;
  • is proud that Belgium is one of the world's 15 largest export regions and is pleased to give exporters a leg up, for example by sponsoring the Flemish initiative ‘Leeuw van de Export’.


Source: Wereldwijs Magazine



Cover yourself before embarking on a quest for global markets

Any company that begins to trade abroad is buying into the idea that it can conquer brand new markets, but also that new risks are an inevitability. And although the risks are often worth taking, informed directors will evaluate the danger in order to be better prepared.

In love, as in business, distance makes things more complicated. However, in an increasingly globalised world, expanding your business activity into other countries remains essential – especially in an export-oriented country like Belgium. This strategic challenge demands an appropriate approach that will allow the company to move into new territory successfully. Whether internationalisation takes a physical or virtual form, a number of risks of a new type will join those you are already managing at local level, including hazards associated with transportation, exchange rate risks, poor knowledge of regional regulations, cultural or ethical "gaps", and difficulties arising from unpaid sums and recovering these abroad, etc. To minimise the impact on your business, take precautions and correctly signpost the pathway separating you from your international customers.

Where should you venture to?

If you have identified a particular continent or country of interest, you have presumably spotted obvious commercial benefits. You know your business and are convinced that this move can work well. But before you take the plunge, a step back is necessary so that you can analyse the country-related risks: from the geopolitical context (an embargo would be disastrous for your plans) to the political and socio-economic situation on the ground. It is not uncommon, for example, for elections to have a destabilising effect on the climate of a nation.

Do you have sufficient local knowledge?

This question may appear trivial at first, but culture and traditions have a major influence on the way trade is conducted – even in a globalised world. Beyond market expectations and the chances your product has of success, it is imperative to grasp the cultural differences that could have an impact on your business. A Japanese company does not take the same approach as its equivalent in Chile. Do not hesitate to recruit a trustworthy consultant who fully understands the region.

Have you planned for the worst?

This piece of advice is highly pertinent when the country in question uses a currency other than the euro because foreign exchange rates fluctuate continuously, with the result that you could be obliged to convert money according to less favourable terms than those initially expected. Adopt an effective foreign exchange policy (stabilise your profit margins, control your cash flow, mitigate potential adverse effects, etc.) and employ hedging techniques that best suit your situation.

How do you evaluate your international customers?

Once you have analysed the context, drop down a level to gauge the reliability of your customer in terms of their financial situation and history (e.g. of making payments), their degree of solvency, etc. While such research may not be simple, it is decisive in order to prevent payment defaults that can do enormous harm. If in doubt, take out an appropriate insurance policy to protect yourself. Paying for this could prevent you from becoming embroiled in perilous (not to mention costly) recovery action abroad. Should you end up in a crisis situation, you should ideally obtain local support in the country. Finally, be aware that in the EU, debt recovery is simplified by the European Payment Order procedure.

Have you adequately adapted the tools you use?

One of the greatest risks of international trade is transportation (loss, theft, accidents, seizures, contamination, etc.) in addition to customs formalities. Once dispatched, the goods are no longer within your control, and so you must ensure your carriers accept adequate liability. This means, for example, having suitable insurance cover, but also anticipating the multitude of procedures to be launched in any dispute. More generally, you will need to review and adapt the contracts you have with transport companies, as well as your international customers. Ensure you clearly set out the terms and conditions that apply (payment deadlines, exchange rates, compensation, etc.) and include realistic clauses that safeguard your own interests.



Digitalisation: sales advisers aren’t dead yet!

As mobile terminals, all kinds of screens and customer self-service points invade our stores, there is a question mark surrounding the role of sales staff in these digitalised spaces. It is more important than ever for them to overhaul their approach.

More demanding customers

In this technological revolution affecting all domains of business activity, one thing is certain: in tomorrow's stores, the sales advisers of "yesterday" are likely to be redundant. The advent of digital technology and, in particular, e-commerce has disrupted retail outlets, and they must now adapt to become increasingly digital – a process of digitalising the physical. In the same way, store staff must also reinvent themselves to respond to "new" consumer needs and behaviours. More connected than ever, more demanding and better informed, consumers can now access a whole sales universe from their mouse: virtually unlimited purchasing possibilities in just a few clicks. To encourage consumers to move through brick-and-mortar stores, these must offer an experience that stands out (original, unique, fun, etc.) and that is likely to meet precise expectations. And creating this added value falls to sales staff, among others.

Advisers above all else

What is an assistant's primary role? It is to advise and guide customers through their in-store purchase pathway. But these so-called "neo-consumers" make their task a more complex one. And this is why store staff must diversify their role, particularly by becoming product experts who have acquired a broader knowledge of their sector and more suitable sales techniques. As well as adaptability and an ability to guide the customer, they must also offer a personalised – even quasi-personal – approach that gives prominence to the human factor. If customers take the trouble to move around the store, it is also because they are looking for this type of personal advice and contact. It is no coincidence that certain brands have already pulled back from their experiences of fully automated sales outlets (for example, Nespresso) and that others are now opting for significant numbers of in-store staff. Just enter an Apple Store to see how well this works...

The connected sales adviser: a friend of digitalisation

"Phygital" is now a reality. But what is key, among other things, is to make a success of this human/tech partnership. Customer self-service points, for example, are not the enemy of sales staff. Quite the opposite – they are another stimulus for communication with customers and an extra opportunity to help them through the buying experience. In addition, it is imperative that the store digitalisation process involves sales staff, especially by providing them with innovative ways to manage customer relations (such as tools to check stock, compare products, exploit customer preferences and accept mobile payments). Major retailers clearly need to invest in staff training in order to develop an understanding of how these tools are helpful and to increase their use. Digitalisation can also help sales outlets turn themselves into spaces designed to promote new customer services, emulating the sessions Apple offers its customers to help them learn how to use its devices. Here too, the sales adviser's role regains its full meaning.

Vectors of the brand's communication

The trend towards the personalisation of stores is one of the developments noted in certain sectors. Whereas major companies have long counted on a pattern of homogeneous sales outlets and sales advisers in order to avoid confusion on the customer journey, some are venturing into concept stores that rely on an authentic character – foregoing interchangeable, cloned sales staff in the process. Recapturing this identity is therefore a unique opportunity for sales advisers, as long as they grasp their role: to pin the brand's colours to the mast for the customer to see. This implies that sales staff should be offered specific, regular training to "imprint" upon them the brand's image and message. This again mirrors what Apple is doing in its stores: they have become cells for buyer-seller interaction and the sales staff embody and carry forward the brand. 



Five steps to recovering your unpaid amounts

Late payments and unpaid invoices weigh heavily on a company's financial health. To manage your finances, it is essential that you put in place an effective recovery strategy, while maintaining a commercial relationship with your customers.

Take care of your invoicing upstream

The first building block of a successful recovery strategy is implementing effective invoicing. This means before starting to recover your unpaid amounts, your company must implement everything you need in order to be paid on time. Clear invoices that are complete and free of errors are a good start to persuading your customers to settle up before the payment deadline. Also think about creating general terms and conditions that 'protect' your interests, by including (reasonable) deadlines for contesting and sanctions applied in case of default of payment. Finally, your whole invoicing process needs to work together like a well-oiled machine in terms of quality, timing, terms and more.

Adapt your approach

Next, you need to have a clear view of your outstanding receivables (customers, amounts, delays, etc.). An audit will allow you to properly assess the situation. When it comes to recovery, every case is different and varies depending on your sector, your size and your position (strong or otherwise) on the market. Moreover, one customer is not the same as another and you must often adapt your strategy. Your best customer, who always pays on time, cannot be treated in the same way as a chronic late-payer or a new purchaser (and did you think about checking their solvency before starting to do business with them?). Conclusion: separate your clientele using relevant criteria to be able to act in the best way.

Act preventively

Your recovery strategy must include a pre-emptive phase to intervene before the amount is due. How? By sending a simple e-mail, for instance, a few days before the payment deadline. This doesn't cost you anything and it gives a clear signal that you are waiting for payment. You could even add a commercial dimension here by asking your customer if they are satisfied with the product, the sale or the service. This type of diligence will be appreciated by your debtors. Along the same lines, and although it may be more costly in terms of resources, you could add a phone call from your sales team. In this instance (and all the others, in fact), you need to oversee the coordination of your sales and administrative department.

Articulate your recovery strategy

If your customers still don't pay, in spite of these preventive actions, you need to react quickly and send your debtors a reminder. Always follow through with what you have told them so as not to lose credibility. Get there slowly but surely – and attach real significance to the form and timing of your reminder letters. In your first letter use a courteous tone, because everyone forgets at some point. What if your debtor doesn't always react? Follow up with a second and (at most) third payment demand: a registered letter, possibly sent by a lawyer for the final reminder. Be increasingly firm and send a formal notice. Try to call your customer in between each attempt (especially those who are worth the effort). This is a great way of reaching a compromise, such as by suggesting a payment schedule if your debtor has specific problems with financial management. An amicable agreement is often better than a futile (and time-consuming) battle. And what's more, this may help you to continue your commercial relationship!

Follow through... if it's worth it

Are your reminders falling on deaf ears? Have you failed to receive a valid explanation? Have you even tried to negotiate in vain? It may (unfortunately) be time to revert to a higher power and take legal action. You won't be surprised to hear that this is the most complex, costly and time-consuming way to recover your unpaid amounts. This is why not all invoices are worth this amount of effort. Properly assess the situation (the amount of the invoice, the 'position' of the customer in your portfolio, etc.). If you're thinking about taking the matter to court, you should seek the advice of a lawyer. But remember there is no guarantee that things will be simple (from simple non-payment, to dispute of the invoice or even bankruptcy of the customer).

Final words of advice

Whatever the result of your recovery efforts, make sure to keep a record of any 'accidents' in terms of your customers' late and missed payments. This kind of monitoring may prove very useful in future. And last but not least, you could even choose to manage customer risk (completely or partially, upstream or downstream) using external actors (such as a lawyer or bailiff) or companies specialised in recovery (such as BNP Paribas Fortis Factor). This is a more expensive strategy, but guarantees you greater peace of mind, as long as you choose the right provider...

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