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Retail: CFOs find their priority is all about the data

David Rae | Oct. 3, 2011
The British high street isn't a happy place. Rising input costs and taxes combined with falling wages and consumer spending makes for a particularly unpleasant cocktail. And while it's a cocktail that retail CFOs have been supping for some time, there's no doubt that the sector is in chronic need of a pick me up.

As a result, Hall gave his blessing to a further �200,000 investment on refreshing the Evans website in 2010, which is just part of a wider �1 million investment in the organisation's IT systems.

Indeed, the success of Evans's online business is influencing Hall's overall capital expenditure programme. With Capex running at between 3.5 percent and 4 percent of revenues, Hall sees this as the right level of investment going forward, despite it peaking in 2010/11 at between 4 percent and 5 percent when between eight and nine stores were opened, rather than the more usual four.

"I think that's probably going to be the level we go forward with; partly driven by the web, because while we're getting strong sales there [at the stores] we don't need total national coverage," he says. "We may only need 75 from our current base of 45 � It has been the online side that's made us think like that."

The retail sector is a complex beast. While the big four or five supermarkets continue to rumble on like some sort of modern day army, occupying high streets the length and breadth of the country, other areas are on their knees. Meanwhile, there are some isolated pockets which continue to boom.

But even those companies that continue to grow must remain vigilant � and in this type of environment, robust, timely data is crucially important.

"Our forecasting is improving because we've got better internal information," says Hall. "Then, you just have to cope with the outside world, in which we know average spends are coming down. You're seeing if you can drive the volume of sales through to make up for that.

"On the tail-end of an investment we made, we put in a much better CRM system and with that, we're cleaning up the data and making sure we can not only use it for transactions ... but also to track when someone comes in and spends, whether it's in the store or online," explains Hall.

"Ultimately, we haven't got the type of loyalty scheme that Tesco has, but that type of thinking is right up our street on the basis that we know a lot of our customers are very loyal to us."

And those retailers with loyal customers can more easily absorb the hit to sales that the ongoing economic crisis is creating.

Things can't be all that bad if you've got the right model however. The grand opening of Westfield's shopping centre (pictured) in London's east end is testament to that as it drew in crowds of over 200,000 and took a record �4 million during its first day of trading on 13 September.

 

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