Q&A With Patrick Wright, CEO, U.S. Operations, Wincor Nixdorf

Patrick Wright took the helm of the U.S. operations for Wincor Nixdorf a little more than six months ago and he has been quick to tap into his vast experience in the financial services industry to provide retail clients with strategies to improve their cash management at the store level. With nearly 20 years of experience as a senior executive with JP Morgan Chase & Co., Wright is responsible for directing the aggressive growth of Wincor Nixdorf's U.S. banking, retail and service organizations. Retail TouchPoints caught up with Wright earlier this month to discuss his perception of global retail trends, and the opportunity to increase profits by reducing cash balances.

Retail TouchPoints: Given your background in the financial industry, can you share some of the experience and key takeaways from your experience that you are planning to bring to Wincor and the retail industry?
Patrick Wright: Many of the financial services companies in the U.S. refer to their branches as stores and they call their tellers cashiers, so there are obvious similarities. One of the key things that is obvious to me, having been at Wincor for six months is that a lot of the problems that retailers and banks are facing are very similar. They have widely disparate networks of branches with people all over the U.S. They have large sums of money that need to be logistically managed, moved and properly managed to as low levels as they possibly can get. They all have theft, robbery and burglary issues with money walking out the door—and frankly, they are all trying to get as much productivity and value out of their employees as they possibly can, because running such a far-flung network is extraordinarily expensive. So there really are a lot of similarities.

I joke with some of my banking colleagues the only difference between some of their branches is there are a couple of extra zeros in extra money in them, versus a typical retail store. A typical retail store might have $20,000 or $30,000 in cash and a bank will have $300,000 or $3 million in a bigger branch, but they’re all trying to deal with and manage money. So where we’ve tried to focus this year is on how to help retailers and banks better manage and control the money they have in their far flung network, help them lower the labor associated with dealing with that money, help them drive the balances to the lowest level they can possibly get without creating outages, and help to streamline the operation of cash management business in their stores.

RTP: What are some of the tools and strategies that you’re recommending to improve and be as efficient as possible around cash management?
Wright: We sell some hardware products that fit nicely into a cash back office, so where either the small store’s assistant manager or the lead cashier in a grocery store would be handing out cash drawers and balancing records on everybody’s money—what I call high capacity automated safes that both take in money at very high speeds and dispense money at very high speeds, and significantly improve and automate the balancing process. We also have in-lane cash and coin recycling products that eliminate, in some cases, the need for a back office all together.

If you could imagine putting a cash and coin recycler under a POS terminal and when a cashier comes into a shift, instead of going into a cash office to get their till, they just walk up to their assigned lane and sign in, because the money is already there, already secure and in balance. As soon as they’re finished with their shift, they sign out, the next shift cashier comes in and signs in the same work station, without any balancing ever needing to take place. We also have software tools that help everybody manage their software balances and intelligently predict how much money they are going to need at which points, and therefore, drive down the total amount of money in the system.

What we’ve found historically is that operations who have less than perfect information about how much money they need, tend to overcompensate, and maybe order a couple extra straps of 50s or 20s or 10s. If you can take cash balances down by, we’ve seen on average 20-30%, extrapolate that across thousands of stores and there’s a tremendous amount of capital you can put back to work for yourself.

RTP: Wincor is a dominant player in the European market, having exposure to that side of the world, are there innovations you’re seeing in the retail side that you are recommending to your U.S. clients?
Wright: Culturally, the customers in Europe tend to be a little more comfortable with an invasive checkout processes. In some stores we’ve done, there are literally gates that don’t open until you pay. I’m not sure U.S. consumers would tolerate that intrusive of an environment. What it’s telling us is that customers are very open to self service and we’ve actually taken some of these cash related devices I’ve just described—if you can imagine at a soft goods store, while the cashier is scanning and bagging and folding your clothes, you’re literally paying by dropping the money into the opening for the cash and coin recycling device and change is made for you automatically.

We’re deploying this right now in a couple of retailers in Europe and the customer response is fantastic. They are very open and the retailers love it because it literally gets their people completely out of the business of handling money, and it automates the experiences completely. We’d really like to bring more of that to the U.S. We’ve had a lot of discussions with U.S. retailers and there is a lot of interest in going there with certain segments of the retail industry. I wouldn’t say it works everywhere. I don’t think it would work, for example, at Neiman Marcus, but there certainly are a lot of places where it does and will work.

RTP: There’s been such a boom of plastic in this country, but with the economic changes, do you see cash becoming more of a business reality for retailers?
Wright: I think it’s just a continued reality. The information we’ve seen is that cash users tend to be fairly consistent. In some industries it’s gone up; in other industries it’s gone down. Across the board, if you look at Federal Reserve data, I think the amount of cash in circulation is higher. The amount that’s actually being used in circulation has been relatively constant the last several years. I don’t see that changing significantly. There are a lot of people who continue to use cash, and I think in this economic environment, in certain segments, we’re actually seeing increased cash use. In convenience stores and fast food restaurants, although they’ve seen an explosion in debit and credit card usage, there’s still a significant amount of cash in some of those businesses.

RTP: You talked a little bit about self service, can you expand on the potential of self checkout and how that could continue to change point of sale?
Wright: Self service is a great business. Just as we saw in the financial services business, adoption will be at moderate to steady growth. I still see a lot of consumers that really don’t want to self serve. That will change over time and I also believe fundamentally that customers want help. Relaying back to my financial services background, when we really started pushing deposit automation in the banking business, we really believed that having somebody there to help customers through their first experiences significantly drove higher adoption rates than just putting the technology out there leaving the customers to figure it out by themselves. As long as you couple self service with the right amount of assistance, it’s a great technology.

Prior to joining Wincor Nixdorf, Patrick Wright held a variety of senior management positions with Chase. Within the retail banking division, he served as senior vice president and head of complex business deals, senior vice president and director of technology sourcing, senior vice president and e-performance officer with the corporate internet group. Wright holds a Bachelor's degree in Information System Management, Cum Laude, from University of Texas at Arlington; and a Master's degree from the Darden Graduate School of Business.