In recent years, the Chief Marketing Officer (CMO) has become one the most scrutinized and volatile executive roles in any organization. Pundits and industry leaders alike have focused on the success or failure of a CMO’s omni-channel integration initiatives. However, much of the analysis lacks specificity with regard to how the omni-channel philosophy manifests itself throughout the rest of the organization. To report on the evolving nature of omni-channel, we spoke with a cross section of functional leaders, including heads of digital/e-commerce, IT, inventory management and marketing to better understand where the industry currently is and where it is headed. Below we share their qualitative insights and how these trends relate to current issues with executive talent and organizational structure. As strategic advisors on talent, we aim to bring the discussion beyond the buzzwords and examine the solutions that are driving change at top companies, or as one executive we interviewed described it, “the hype cycle is over.”
Framing Up The Challenge The Insider Perspective...
Today's consumers have come to expect seamless experiences from their retail transactions. Several of the surveyed executives pointed out that most traditional retailers are playing catch-up with their smaller, more nimble digital competitors due to the challenge of scaling across large, multi-channel companies. While the “omni” in omni-channel suggests a unity of focus throughout the organization and channels, retailers tend to be structurally diverse, geographically disparate, and functionally siloed. The omni-channel experience, on the other hand, needs to be simple, intuitive, and personalized. The challenge is to mitigate the tension between these two factors: the customer’s desire for a straightforward experience and the organizational complexity and collaboration that must exist to fulfill this need.
In a truly omni-channel organization, the executive team partners to make all organizational systems seem like one entity to the customer. As pointed out by one of our respondents, this includes “everything from e-receipts to digital retail and experiencing the brand in the same manner no matter what type of transaction or interaction”. Some organizations have even done away with the term “omni-channel” in favor of “unified commerce.”
Customers should never sense a disconnect between various aspects of the business. For example, they should not be aware that a finance function is handling their credit card transaction, while a separate supply chain function ensures delivery of their order, and the marketing function sends them promotional emails. Everything should feel as if comes from a singular source. While today’s CMO is leveraging data analytics and consumer insights to drive highly personalized and targeted marketing, unified commerce is not merely the responsibility of the marketing team. Rather, this is an organizational structure and cross-functional executive talent issue that should be at the forefront of the CEO’s priorities.
Customers should never sense a disconnect between various aspects of the business. For example, they should not be aware that a finance function is handling their credit card transaction, while a separate supply chain function ensures delivery of their order, and the marketing function sends them promotional emails. Everything should feel as if comes from a singular source.While today’s CMO is leveraging data analytics and consumer insights to drive highly personalized and targeted marketing, unified commerce is not merely the responsibility of the marketing team. Rather, this is an organizational structure and cross-functional executive talent issue that should be at the forefront of the CEO’s priorities.
Unifying The C-Suite Is The Real Answer
The Insider Perspective...
While the much-discussed Chief Customer Officer (CCO) is a critical role in the evolution of the marketing organization, hiring a CCO is not a panacea for multi-channel companies who are looking to achieve omni-channel integration. In some situations, marketing may be the scapegoat for unified commerce failures, rather than looking at the absence of the larger team’s view on omni-channel strategy and their needed collaboration on the execution of these initiatives. This was a consistent theme for those surveyed. The CMO or CCO may obscure organizational structure issues and lack of omni-channel focus and collaboration amongst all leaders. Comparing the role of today’s CMO to that of the Manager of a baseball team, one Chief Marketing Officer stated, “I just expect in this environment that the CMO is hired to be replaced like a baseball team Manager after a bad season.”
Hiring a Chief Customer Officer or Chief Digital Officer to lead consistency across customer touch points is only the beginning of achieving unified commerce. Companies should think progressively about where the customer touchpoints actually are, taking into account what had traditionally been “backend” functions that are now more critical consumer-facing leadership roles. From there, the CEO should consider building a broader, more inclusive omni-channel-conscious C-Suite with enterprise-orientation, cross-functional partnership, and customer-centricity as critical executive competencies. As one executive put it, “Companies who don’t have their back-end communicating are going to lose.”
The question unified commerce-oriented CEOs need to ask themselves is “How omni-channel is my executive team?” and not “How omni-channel is my marketing/digital team?” The C-suite should be comprised of functional experts who have innovative ideas about how unified commerce applies to their respective fields. In particular, leaders in Technology, Supply Chain, and Inventory Management are becoming the next generation unified commerce innovators, bolstering the work of the marketing function to create truly omni-channel organizations. Those who want to “own” omni-channel decision making in “their” function are missing the bigger picture. Just because one “runs” the e-commerce business, which may be viewed as a stepping stone to a P&L leadership role, does not ensure that there is a full appreciation of the role that each function plays as a part to the total omni strategy.
Creating the Context for a Brand-Focused Mindset The Insider Perspective...
Many of the leaders we interviewed emphasized the increasing importance of partnership between the technology and marketing functions. In recent years, information technology (IT) has become a pivotal functional lead internally and is deeply influential in the way customers view and experience a brand. As one executive pointed out, in today’s market, “technology advancements can inform the brand, product, and marketing decisions.”
For many retailers, technology is the literal touchpoint with the customer, as shoppers increasingly use mobile devices and retailers integrate tech tools into the selling environment. One leader we spoke with noted that “everyone is figuring out how to leverage digital to support store experience.” Beyond aligning the interface with the overall brand feel, IT executives must leverage technology to collect customer data. By tracking individuals as they flow across platforms and channels, retailers are able to then personalize interactions based on concrete data. Furthermore, some retailers are going a step further, developing social listening tools to better understand customer reactions to their brand on social media, enabling the company to course-correct on new and existing initiatives, and inform future product decisions.
The progressive CIO partners with the Chief Marketing, Customer or Experience Officer and leads all tech innovations with brand identity in mind. The most in-demand executives are able to balance the technical responsibilities of creating and implementing solutions and systems while developing ways to use technology to enhance experience, drive sales, and improve efficiency. Additionally, many progressive organizations are creating Chief Information Security Officer (CISO) roles, reflecting the growing importance of data confidentiality to the brand reputation and seamless retail customer experience.
The Unsung Hero – Unleashing The Power of Inventory Management
The Insider Perspective...
Several executives we spoke with pointed out the evolving role of inventory management which has become critical in making an entire organization more connected and customer-centric. In progressive organizations, all channels operate out of one shared inventory managed by a channel-integrated leadership team. This enables the unification and transparency of platforms from an inventory management standpoint. Furthermore, store associates, company executives, and customers alike need easy access to cross-channel inventory information, allowing them to seamlessly shift from channel to channel and connect with their purchases at their convenience.
Forward-thinking companies are leveraging unified commerce initiatives to move inventory at the local level by tracking e-commerce purchases and fulfilling orders from local stores rather than from centralized distribution centers. This connects customers to their purchases faster, saves on transportation and holding costs, and reduces the need for mark-downs at the end of the product cycle.
management executives, in partnership with the supply chain and IT functions, are
leveraging data not only to effectively distribute merchandise to satisfy
regional nuances, but are also finding new ways to support the ease of shopping
for the customer and finding margin improvement opportunities.
The Criticality of the 24/7 Supply Chain The Insider Perspective...
In our survey of omni-channel leaders, the supply chain was frequently highlighted as the new frontier for complete omni-channel integration. Today’s customers experience the supply chain in real time when they attempt to connect with their purchases on their own schedule. For example, customers’ disjointed attempts to return and track their purchases is a common point of weakness in the omni-channel efforts of many organizations. Additionally, there is a trend toward a “socially conscious supply chain,” as consumers are increasingly concerned about the social and environmental impacts of the products they buy.
Truly omni-channel organizations need Chief Supply Chain Officers who can find functional solutions to the trade-off between cutting costs, building speed and efficiency, and improving customer experience. Companies with unified commerce or seamless retail are increasingly looking to hire executives who are mindful of how supply chain practices reflect on the brand and customer experience.
In shared inventory environments, the shopping bag the customer leaves a store with is often followed by an in-store online order, satisfying out of stock disappoint with free shipping advantages. Alternatively, order online/pick-up in store, and other ease-of-shipping methods mean that supply chain executives can demonstrate creative thinking about warehousing, distribution, and leveraging stores for inventory to give the most margin impact and be “closest” to the customer.