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Real Business : Winter 2008
12 REAL BUSINESSISSUE2,2008 dean golja O n any given weekend, you may find Bernie Bicknell CPA in a Mitre 10 store browsing in power tools, perusing outdoor furniture, considering the paint range or making an enquiry at the counter. Bicknell, CEO of the hardware giant since 2004, has found the best way to determine how the business is running is to become a mystery shopper at one of the company’s 550 stores. “The store floor is a good guide to how the organisation is going,” says Bicknell. Are the stocks in on time? How good are the service levels? How is the customer being treated? In the retail business, of course, the customer interface is paramount, which is why Bicknell, like many others at the top of this fast, increasingly competitive sector, does his own reality checks. Besides, he says, “when you’re the boss, no one ever wants to give you bad news, so I like to find out for myself. When you have the facts, you can take action.” And, swift action is what retail is all about. Stephen Doessel CPA, CFO of Australia’s number one fashion company, Cue, first stepped into retail as a management accountant with the Sussan group in 1994 and was blown away by the excitement of its immediacy. “It’s so dynamic,” Doessel says. “A decision you make today has an impact today or tomorrow. Retail appealed to me for that reason. I like to go home at the end of every by deborah tarrant IndUStryprofIlE:REtAIL SEctoR day knowing I contributed something of value to the organisation, and a retail environment delivers that.” Pricing is a case in point. At Sussan, he redesigned the retail pricing model, moving away from automatic mark-ups to put garment pricepoints more in line with competitors, and not only moved stock faster but increased margins by 3 per cent. In the ephemeral fashion business, along with many other retail enterprises, technology delivers sales results daily. Decisions are made both proactively – planning strategy that may mean putting fresh stock into stores weekly and at the same time developing product to suit seasons ahead – and reactively, finding ways to budge those slower-moving products. Accountants play a big role in eliminating rework or identifying mistakes before they happen, according to Bicknell. For him, much of the industry’s intrigue lies in the need to juggle macro and micro at the same time. He has to keep up with trends and customer demand – for instance, the hot-to- trot, keenly priced GPS units, that for a few short months ran out the hardware store’s doors around Christmas. At the same time he must pay attention to the big picture where volatile financial markets and rising interest rates mean consumer discretionary spending will drop. Retailers are forever in action mode. “When demand for new housing falls away, the hardware focus adjusts as people start renovating,” Bicknell points out. The largest employer in Australia, the retail sector generated $262 billion revenue in 2006, and despite the recent dampening are you being served? the retail sector is constantly changing, but one thing remains the same: a focus on customer satisfaction i can dissect a balance sheet, build a cash flow and understand what drives a profit – and in retail that’s the customer …
Issue 3 2008