Retail CFO challenges: what’s keeping you up at night?

As retailers face new and complex problems across their business, from the potential of store closures through to increased supply chain strain, there’s no doubt that some CFOs will be having their fair share of sleepless nights right now. Let’s have a quick look at some of their current major concerns…

Uncertainty. Uncertainty everywhere.

One thing that CFOs love is stability. Operating in a stable environment makes it far easier to forecast accurately, plan ahead and make the smartest decisions. But we’re in a different world now, and the future is impossible to predict. COVID-19, coupled with Brexit, makes planning extremely difficult, and there’s now a real need for CFOs to focus on being agile enough to react to the ever-changing landscape, as opposed to chasing the perfect forecast.

Understanding customers

All of this uncertainty means that gaining a deeper understanding of your customers and their behavior is crucial at the moment, and will put you in the best possible position going forward. It’s expected that consumer spending will be impacted in the coming months, with potential tax hikes on the horizon, particularly as we enter 2021. The ability to better understand and predict customer behavior will give you confidence and more transparency on the proposed impact of OPEX spend.

Changing goalposts

If juggling e-commerce with bricks and mortar presence was a headache, it’s now more like a migraine. With store closures a constant threat, the survival of the high street is on something of a knife edge. While many will be turning their attention to online to steady the ship, the competition has never been more fierce – and the growing dominance of leading players like Amazon will always be a concern.

So, what’s the answer?

This is the million dollar question, but there are a few things retail CFOs can do to try and overcome some of these challenges.

Obviously, having continued access to funding and finance in these turbulent times is a must, and those who aren’t in such a fortunate position may well struggle as we enter into 2021. 

In the short term, a key focus for CFOs has to be on stock and inventory management. They need a better, data-driven understanding of their stock position, balanced with their working capital, in order to be ready for Black Friday and Christmas – and the clock is ticking. The companies that will win this holiday season will be those who are leveraging their data to its full potential, reacting more quickly and avoiding inventory headaches and supply issues whilst ensuring their customers’ expectations are met.