Fatihah Ramzi, DigitalCFO Asia | 12 August 2022
As we are all aware, the COVID-19 pandemic has had an uneven influence on the retail industry, with certain sectors enjoying their best year ever while others have had their worst. The pandemic has resulted in the largest increase in sales, earnings, and stock values for various retail businesses. The pandemic had an especially detrimental impact on companies that particularly specialized in clothing such as department stores, and luxury shops in enclosed malls. For people who have large debt, the effect on the discretionary sectors has multiplied. The shift of sales from brick and mortar stores to online has been significant for many retail businesses.
To find out more about what CFOs in the retail industry went through, DigitalCFO Asia spoke with Jheeva Subramanian, Chief Financial Officer, BHG to garner further insights.
Priorities Of A CFO In A Retail Industry
The priority is to transform the current business model to a new business model that is sustainable for the current environment and prepare for the future. This includes creating and implementing new strategies to fit the overarching transformation plan. Digital transformation is a part of the overall transformation strategy that the business will embrace.
“Being cost conscious, ensuring we have the right skill set and being agile to adapt to the ongoing changes to the industry is equally important.”Jheeva Subramanian, Chief Financial Officer, BHG
Given that the pandemic has shifted a large portion of merchant sales from physical stores to e-commerce/omnichannel, investing in infrastructure and technology to communicate with customers successfully has become essential. As new consumer behaviors have been established during the pandemic, it is expected that a large portion of this trajectory will be maintained even in the post-pandemic world.
Since the sites of some physical storefronts and distribution centers no longer matched how digital consumers interacted with the business, several retail stores were forced to invest in shutting, downsizing, and/or relocating their operations. Retailers had to spend money on new technologies as well to interact with customers profitably. As a CFO in the retail sector, these investment selections must be methodical and carefully prioritized.
Improvement Of Sales After Easing Of COVID-19 Restrictions
Traffic has improved since the relaxation of the Safety Management Measures, but it is still not at the 2019 levels as yet, mainly due to some companies still practising work from home policies and the lack of tourists. However, BHG is carrying on with the transformation plans and have seen a positive impact to the stores and their online channel due to the changes that they have been making.
As mentioned above, consumer behaviour has changed due to the pandemic and will continue on even in the post-pandemic environment. Due to this, CFOs will need to re-strategize their sales tactics and put more emphasis on their online platforms which is the preferred mode of shopping for consumers right now.
Making The Impossible, Possible; Operating During COVID-19
The pandemic was unexpected, and no one was really prepared for it. BHG had to take challenges in their stride.
“We had our transformation plans prior to the pandemic and have carried on in implementing the plans, though with some delays due to the disruption caused by the pandemic,” says Jheeva Subramanian, Chief Financial Officer, BHG.
In some cases, BHG accelerated the transformation by starting their ecommerce channel https://bhgsingapore.com.sg/, offering click and collect to bridge the gap between offline and online in 2020.
Late 2020 and in 2021, BHG went ahead with the revamp of the Beauty floor in their flagship store at Bugis Junction, introducing spa cabins, their own curated beauty products in a new concept called the Beauty Library, introduced Mobile POS for a seamless shopping experience, virtual makeup mirrors and partnered with the Marmalade Pantry to open a cafe in the store. This was all part of the overall transformation plans.
“We also introduced lifestyle concepts such as beauty workshops, yoga classes and more recently a live kitchen in partnership with the Sunrise Academy,” says Jheeva Subramanian, Chief Financial Officer, BHG.
BHG will continue to add more lifestyle concepts to the business. The company is continuing the changes in 2022, with a revamp of their Home and Living system change to a unified commerce solution, introducing more digital transformation into the business such as self-checkouts, endless aisle and working on introducing AR/VR experiential concepts in store.
Importance Of Digital Finance Transformation In All Industries In 2022
“Digital transformation for finance is no longer a luxury or a nice addition to have. It should form part of the overall digital transformation strategy,” says Jheeva Subramanian, Chief Financial Officer, BHG.
Digital finance transformation has become an integral part of any transformation strategy. The aim is to simplify the processes and automate repetitive tasks, which will free up some of the finance staff’s time to be used for data analytics and business partnering roles. Being able to use the data to improve customers’ shopping experience via personalization and more informed decision making is an important part of the transformation.