Mass Merchant

Pushing the pace of innovation to improve efficiency and remain on the cutting edge

The competition among the largest retailers in North America is fierce as they vie for customer loyalty in physical brick-and-mortar stores and online platforms. Today, e-commerce represents roughly 15-20 percent of overall retail business but that number is trending upward as consumer behavior shifts and external factors force change. As the lines between in-store and online channels blur, mass merchant retailers focus on new offerings and innovation to stay on top in the marketplace. In our partnership with these mass merchant mega retailers, Cotiviti too focuses on innovation and customizations that allow our clients to operate efficiently and stay ahead. 

 

Leveraging engineering resources to drive innovation and customization 

 

Retailers in the mass merchant arena rely on the world’s most sophisticated systems for logistics, delivery, supply chain management, and order fulfillment. Clients expect similar best-in-class technology to perform recovery auditing and maintain positive supplier relationships. Cotiviti’s clients benefit from our focus on continuous improvement and collaboration to spark new ideas and forward thinking.   

Our engineering teams partner with auditors in the field to understand the unique tool customizations and data enhancements that enable above average audit results. Efficiency is the name of the game when transaction volumes are in the billions. We partner with mass merchant clients to expedite processes for entering claims, routing information to suppliers, and integrating systems to improve the performance of email keyword mining. In a nod to our commitment to innovation and continuous improvement, Cotiviti earned the highest customer satisfaction response rate for vendor experience in a survey of the external audit partners for our work with the leading online retailer in the U.S. 

 

Delivering results across varied audit engagements 

 

Expectations are lofty for a primary audit firm – deliver both a high catch rate and a high degree of claim quality. Secondary firms follow to fill in gaps and pull through the most complex recoveries. Cotiviti plays both roles for clients in the mass merchant segment. We operate as the primary pass audit for 75% of our clients and have a track record of consistently beating recovery budget expectations. Continuous process and operational improvements play a key role in sustaining long-term partnerships – our average length of relationship is 10+ years across mass merchant clients.  

The sweeping scale of operations at the largest retailers in North America makes contract compliance auditing essential to uncover revenue leakage related to indirect spending on goods and services. Cotiviti performs a contract compliance audit of goods not for resale for 75% of its clients in mass merchant in addition to goods for resale recovery auditing.

 

Don't just take our word for it
Here are a few client examples:
Exceeding recovery budget while driving future improvements

The goal of a primary pass is to maximize recoveries while at the same time collaborating with internal audit teams on continuous improvement. Working in the primary position for one of the world’s largest mass merchant retailers, Cotiviti has realized stellar results – exceeding the recovery budget 8 out the last 10 years, at rates of 110-125%.

Root cause insights added significant value to several stakeholders for one of our clients including merchandising, internal audit, and pharmacy. We also recommended changes to data acquisition processes in order to expand the scope of data available to assist an audit.

  • >95% combined catch rate over the past 5 years

  • >200% growth realized in recovery budget for pharmacy and grocery segments

  • Reviewed all Pharmacy (Rx) datasets to evaluate next steps for audit acceleration

Expanding contract compliance benefits to additional areas

A contract compliance audit creates the transparency needed to refine business processes, controls, and contract language. Cotiviti partnered closely with one mass merchant client with a healthy footprint in electronics, technology, and gaming to deliver significant financial impact through recoveries and annualized cost savings.

Our experienced audit team collaborated with multiple stakeholders to foster relationships and expand the benefits of a contract compliance audit to additional business areas such as facilities maintenance, marketing/advertising, and warehousing. To date, the results of the 5-year program have delivered on the investment of time and resources.

  • >$13 million in recoveries since 2015

  • >9 million in annualized cost savings

  • ~30 supplier engagements completed to date

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