Moderator: Amit Kumar, Partner, Progress Partners<\/p><\/div>\n

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• \u00a0The biggest component of expenses is RENTALS.<\/li>\n
• Expense management in retail has to be about not just reducing the cost but also about increasing the efficiency <\/span>of the money spent.<\/li>\n
• CFO\u2019s have to leverage technology<\/li>\n
• Three key focus areas for retailers:\n
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  • Optimizing the cost of Insurance<\/li>\n
  • Efficiency in use of power<\/li>\n
  • Engaging & retaining employees to optimize manpower costs.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

    \u00a0<\/b><\/p>\n

    What can be done to reduce cost?<\/span><\/b><\/p>\n

    Atul Daga, Chief Financial Officer, Aditya Birla Retail Ltd.<\/span><\/b><\/b><\/p>\n

    Incentivizing sales by staff can help increase sales & also reduce manpower cost.<\/i><\/b><\/p>\n

    

    Atul Daga, CFO, Aditya Birla Retail<\/p><\/div>\n

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    • \u00a0Rentals:\u00a0 Landlords need to showcase value to retailers: – show the CFO how they would be a partner in attracting footfalls<\/span>.<\/li>\n<\/ul>\n
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      • Manpower Consider using part-time workers for peak seasons and hours; create apprenticeship programs.<\/li>\n
      • Use Technology for : Inventory tracking, mapping buying habits, and loyalty programs which are difficult and expensive when done manually.<\/li>\n
      • Note: Share of revenue from Loyalty members is higher than from non-loyalty members. This single factor justifies technology investments.<\/li>\n<\/ul>\n

         <\/p>\n

        Optimizing Costs ?
        \n<\/span><\/b><\/p>\n

        Dinesh Maheshwari, CFO, Future Retail<\/span><\/b><\/p>\n

        Contractual structures \u2013 exit clauses, minimum guarantees \u2013 these are critical cost \u2018lock-ins\u2019<\/i><\/b><\/p>\n

        

        Dinesh Maheshwari, CFO, Future Retail<\/p><\/div>\n

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        • Rentals:<\/strong> Evaluate the exit and escalation clause in the rental agreement\n
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          • Negotiate rent \u2013Minimum guarantee structures \u2013based on footfall, location, availability of cinema, food court -are more flexible.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
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            • Technology:<\/strong>\n
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              • Hardware costs are down by 80%, total technology cost is by 40 to 50% compared to previous years.<\/li>\n<\/ul>\n
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                • Use this to create greater impact and efficiency of technology spend.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
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                  • Electricity:<\/strong>\n
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                    • Use cooling tower water for utilizing in cooling.<\/li>\n<\/ul>\n
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                      • Buy power from the exchanges rather from the Board.<\/li>\n<\/ul>\n
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                        • Resort to solar power and use power monitors.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
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                          • Get expert help in structuring your insurance coverage.<\/li>\n
                          • Customer satisfaction should be the priority.<\/li>\n<\/ul>\n

                             <\/p>\n

                            How can the CFO leverage technology? <\/span><\/b><\/p>\n

                            Himanshu Gupta, CFO, Religare Wellness<\/span><\/b><\/p>\n

                            Store level profitability should be used to judge if the rentals are justified.<\/i><\/b><\/p>\n

                            

                            Himanshu Gupta, CFO, Religare Wellness<\/p><\/div>\n

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                            • \u00a0Use Technology for Training and empowerment of employees\n
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                              • HRMS (HR Management systems) help create SOP\u2019s which measure efficiency and quality of service and reduce role stress among employees.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
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                                • Use electronic bidding to undertake due diligence on insurance \u2013optimize coverage not just costs. Insurance covers must be reviewed annually, not when a claim rises.<\/li>\n<\/ul>\n
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                                  • Use chargeable fixtures: to optimize costs.<\/li>\n<\/ul>\n
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                                    • The approach has to be: use technology to make real time data available to each process owner.<\/li>\n<\/ul>\n

                                      
                                      \nHow to manage Expenses? <\/span><\/b><\/p>\n

                                      Jayesh Patel,\u00a0Chief Financial Officer, Globus Stores<\/span><\/b><\/p>\n

                                      Flexibility in providing customer experiences can improve customer engagement.<\/i><\/b><\/p>\n

                                      

                                      Jayesh Patel, CFO, Globus Stores<\/p><\/div>\n

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                                      • \u00a0Ratio of sales and rental is to be calculated for efficient management and comparison.<\/li>\n<\/ul>\n
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                                        • Apart from salary cost other personnel ratios are important.<\/li>\n
                                        • Use of technology to control inventory is imperative, the choice is what systems best fit the organizational requirement.<\/li>\n
                                        • Check the exclusion and inclusion in insurance policy.<\/li>\n
                                        • Green building design\/ Led lighting.<\/li>\n
                                        • Optimize the high tension and low tension power mix in sourcing of electricity. Uniform power rates is required to ensure smooth functioning and reduce costs.<\/li>\n
                                        • Idea is to map the consumption pattern of electricity and accordingly adjust.<\/li>\n<\/ul>\n

                                          
                                          \nManagement structures to create customer delight and employee engagement <\/span><\/b><\/p>\n

                                          Vikas Choudhary, CFO, \u00a0AIMIA \u00a0 <\/span><\/b><\/p>\n

                                          Using loyalty programmes can help you reduce your marketing expense & also increase sales.<\/i><\/b><\/p>\n

                                          

                                          Vikas Choudhary, CFO, AIMIA<\/p><\/div>\n

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                                          • \u00a0Factors to reduce costs and gain customer loyalty:\n
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                                            • Revenue sharing with the developer<\/li>\n<\/ul>\n
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                                              • Maintain a level of Customer experience<\/li>\n<\/ul>\n
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                                                • Re-negotiate the MG and CAMP charges<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
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                                                  • Information is key to decision making. Leverage technology to understand the customer needs and get higher share of wallet from the same rental should be the key.<\/li>\n<\/ul>\n
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                                                    • Sainsbury\u2019s used technology to drop promotional cost to 32% from 71%. Retail is all about costs. Reduce costs and maintain the same level of service and revenue output.<\/li>\n<\/ul>\n
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                                                      • Resort to non-monetary benefits such as recognition as against monetary benefit to reward employees. This can be used tactically to reduce the manpower costs.<\/li>\n<\/ul>\n

                                                         <\/p>\n

                                                         <\/p>\n

                                                        What are the preconditions for retailers to gain profitability?<\/p>\n

                                                        Neeraj Raheja, Head Finance and Business Support , Westside<\/span><\/b><\/p>\n

                                                        Negotiate rental with mall developer & set preconditions to make developer accountable.<\/i><\/b><\/p>\n

                                                        

                                                        Neeraj Raheja, Head Finance, Westside<\/p><\/div>\n

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                                                        • \u00a0Calculate and manage using a sales to rental ratio. Also convert and track footfalls to sales \u2013 to improve the sale to rental ratio.<\/li>\n<\/ul>\n
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                                                          • Control attrition because the cost of training etc. is gone once the employee leaves.<\/li>\n
                                                          • Focus on what the customer wants \u2013 e.g. English language skills are expensive and in tier 2 cities, customers are more comfortable with regional languages.<\/li>\n
                                                          • Use data analytics so as to understand customer behavior and loyalty \u2013 push stores towards in-store up-selling, cross-selling.<\/li>\n
                                                          • Thereby, increase\u00a0 the revenue without impacting rentals.<\/li>\n<\/ul>\n
                                                            

                                                            From L-R: Amit Kumar, Partner, Progress Partners; Neeraj Raheja, Head Finance, Westside; Dinesh Maheshwari, CFO, Future Retail; Himanshu Gupta, CFO, Religare Wellness; Jayesh Patel, CFO, Globus Stores; Vikas Choudhary, CFO, AIMIA; Atul Daga, CFO, Aditya Birla Retail<\/p><\/div>\n

                                                             <\/p>\n