Anticipating the next movement of the customer and building up relationships with the big brands is important for any retailer.
That’s especially true when your business is selling footwear, apparel, accessories and home products from consumer brands. Joseph Falcão, chief financial officer (CFO) at Orva, told PYMNTS that the company had already bought goods for the next holiday season — the lead times are that long.
“In the case of any of the retail stores, we have to make sure each season has a proper stack of products to be sold,” Falcão said.
Promoting Innovation and Driving Growth
Falcão joined the 70-year old business turned eCommerce platform on March 30 in the newly created role of CFO, and was tasked with scaling Orva’s financial infrastructure to promote innovation and drive growth.
His agenda includes doubling the revenue by creating sound processes, systems, speed and agility by using a better technology stack. The latter includes machine learning (ML) and artificial intelligence (AI) that will help spot common trends and patterns and anticipate what the customers want.
As a third-party seller on the eCommerce platforms of Amazon and Walmart, Orva must work to provide quality products, deliver a good customer experience and make a profit while paying the fees required by the marketplaces.
“One of the things the CFO has to do is make sure the unit economics are sound, and any deviation is shared with the operations team and across the company, so you can make sure the unit economics are protected and you can find ways of driving efficiencies,” Falcão said.
Tracking Trends Daily, If Not Hourly
Despite the many macroeconomic challenges facing businesses around the world, including rising rates, inflation and supply chain, Falcão said the company is optimistic U.S. consumers will buy the products, because they still have disposable income.
“The beginning of March, the consumer was fairly hesitant because of Ukraine and Russia, but after Easter you can see the sales ramping up on a daily basis,” Falcão said. “We track that on a daily basis — if not an hourly basis — on a dashboard.”
To cope with inflation and rising rates, CFOs try to lock or refinance any debt they may be carrying — so they monitor that closely. Looking at the working capital in terms of inventory, they invest smartly in inventory and make sure they can keep the products available.
“We have tried to offset or anticipate any supply chain problems and get the products onshore as much as possible — in terms of the elements we can control,” Falcão said.
Building Partnerships
Aiming to boost revenue, they look for white space in terms of the brands and styles they have available and can help get a presence on Amazon. That means a new style of shoe or apparel being sold.
“The customers want innovation, want to try new things,” Falcão said.
Other roles of the CFO include helping the merchandising team convey the company’s story to the brands, building partnerships and showing the brands’ CFOs how they can help optimize the brands’ profits.
In the case of a retailer selling on eCommerce platforms, that means helping enhance the brands, optimize its inventory and boost its plant utilization.
“Every big company — Skechers or Reebok, etc. — they have a CFO, and the CFO is very smart and capable and also they want to optimize their profits,” Falcão said.
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