CFOs are now in the driver’s seat when it comes to customer acquisition and retention strategies as retailers compete aggressively for market share, according to a group of retail CFOs who spoke at the National Retail Federation annual conference on Sunday.
In doing so, the executives are continuing the evolution that’s taken place across industries in recent years as finance chiefs have expanded their roles beyond traditional lanes and into corporate strategy. The shift is underscored by the increasing number of multiple titles held by CFOs: the panelists included three CFOs of large companies who have taken on additional titles in recent years, including those at Macy’s, Levi Strauss, and Rothy’s.
“CFOs are not just defensive, record keeping, news reporting individuals — now they're actually informing and driving strategy, capital allocation, risk assessment,” said Dayna Quanbeck, the CFO and president of San Francisco-based direct-to-consumer shoe brand Rothy’s. “Sometimes growth is not rational and you have to be willing to make those calculated risks even when returns are unknown.”
Quanbeck’s career trajectory at Rothy’s — she joined the company as CFO in 2019 and progressively added responsibilities, including chief operating officer in 2022 and president in 2024 — is emblematic of a trend where CFOs find themselves working more horizontally and taking on customer strategy on top of traditional financial management roles.
In particular, CFOs are charged with balancing growth with cost containment mandates, findings that were highlighted in PwC’s August 2023 Pulse Survey of more than 600 executives. More than 89% of finance leaders said striking the right balance between cost cutting and investing for growth is a top challenge, PwC reported.
It’s about more than cost-cutting
Harmit Singh, chief financial and growth officer at San Francisco-based Levi Strauss, began working at the iconic jean and apparel company as executive vice president and CFO in 2013. His role expanded to include chief growth officer responsibilities in January 2023. Singh said the CFO role has evolved considerably since he first took on the position. Instead of a tight focus on financial management, CFOs are now more focused on developing companies’ business models.
For Singh, the role initially was focused on creating shareholder value, a “glass half empty” approach that expanded with time, he said. Now, fostering growth is a bigger part of his job.
“You have to embrace growth…the CFO’s life is a lot easier if you’re creating value through the top line, not necessarily by fine-tuning costs,” he said.
The CFO of the future needs to employ an agile approach to navigating uncertainty, embracing technology, and ESG commitments, he added.
The CFO as an operator
The CFO now needs to have the mindset of the investor as well as the shareholder, according to Adrian Mitchell, CFO and COO of Macy’s. Combining the perspective of the CFO and the COO gives a unique window into operations alongside a focus on meeting financial targets, he said.
Mitchell joined the New York-based company as CFO in 2020 and expanded his role last March with a co-appointment as COO.
“[It’s about] just having a much greater appreciation of being in the operations, being in stores, being in distribution centers, thinking about the capital allocation decisions for technology,” he said. “You just have a much greater appreciation around the magnitude of changes that are necessary, what drives short-term performance and long-term gain.”
The increased demands comes as legacy retailers are still working to adapt to changes in the way consumers shop. For example, Macy’s this week announced it was reducing its workforce by 3.5%, and closing five stores as it seeks to find the right mix of on- and off-mall stores, Industry Dive sister publication Retail Dive reported.
Embracing AI
As CFOs juggle increasing responsibilities, they’re also looking to capitalize on the potential impacts of new and emerging technologies.
Retail CFOs are not immune to the push toward adopting AI as an efficiency driver. Mitchell said Macy’s has been investing and experimenting with AI for the past three years. He acknowledged that it’s important to make an initial investment in the technology in order to ultimately make a judgment call on the best use cases.
The company’s efforts to use AI to optimize pricing is already delivering a return, he said.
“How we price, how we do markdowns, where we place product is a significant unlock,” he said. “We've been able to make tremendous gains in our margin profile and in the health of our inventory profile as an enterprise over the last three years by putting these use cases into play.”
The company has also invested in automating routine processes, including reporting and allocating inventory, “which allows the team to spend more time on problem solving and less time on reporting,” he said.
Refreshing retail KPIs
Levi Strauss is connecting key performance indicators to move from lagging macros indicators like revenue and profit growth to concrete metrics around customer uptake for products, instead of more abstract figures based on more overarching, corporate metrics.
“I think we are evolving to leading KPIs, KPIs that really give you an insight into how the consumer is thinking and behaving and buying,” said Singh. Examples include return on invested capital, store-level sales and customer lifetime value, which are tied to executive compensation, he noted.
To implement customer-oriented KPIs, investments in technology and the right hires are critical.
“We're making big investments in technology, we're upgrading our [enterprise resource planning system], we have a new chief digital officer who came across from Nordstrom, and is bringing fresh thinking into the company,” he said. A year ago the company named Jason Gowans as its new chief digital officer, charged with bringing together the company’s engineering, data, AI and digital product management.
Editor’s note: This story was updated to show Levi Strauss named Jason Gowans as its chief digital officer in January of 2023.
