The CFO role has been seeing shifts in the retail industry recently, as the position is seemingly no longer tied to the finance function per se, according to Ernst & Young.
A recent panel discussion among retail CFOs revealed a sharp focus into the changing landscape of the profession as it now encompasses technology integration, strategic innovation, and adapting to shifting consumer behaviours.
Acing the technology revolution
One of the key takeaways from the discussion was the integral role of technology in modern retail operations.
CFOs are now expected to harness the power of technology to drive growth and operational efficiency, spanning from AI-driven inventory management to data analytics for predicting consumer demand.
Technology has become not only an optional investment but a strategic necessity as it is no longer a matter of if but how and when to implement tech solutions. The ability to connect with consumers through digital channels, optimise supply chains, and predict market trends is what sets modern retailers apart.
Balancing investment and cost
A critical challenge for retail CFOs is striking the right balance between investment and cost. As technology-driven initiatives may seem expensive upfront, CFOs must carefully weigh the immediate financial implications against the long-term benefits. It is about deciding which investments align with the company's strategic vision and which provide a tangible return on investment.
Adopting the omni-channel route
Omni-channel retailing, another pivotal discussion point, involves seamlessly integrating various sales channels, such as physical stores, e-commerce platforms, and mobile apps. The goal is to provide customers with a unified shopping experience, irrespective of the channel they choose. While this strategy poses unique challenges, it also presents tremendous opportunities.
Omni-channel retailing allows retailers to reach customers where they are, offering consistent brand experiences and leveraging entire inventories efficiently. While immediate profitability may not always favor online channels, the long-term outlook is promising as the strategy matures.
Effective working capital management
Working capital management also remains a top concern for retail CFOs, with extended credit cycles and increased credit demands from online channels making this a formidable challenge.
Technology once again emerges as a valuable tool for optimising working capital. AI-driven inventory management and data analytics enable retailers to fine-tune their stock levels, reduce holding costs, and enhance demand forecasting accuracy. These capabilities are vital in maintaining healthy cash flow cycles.
