Retail Strategy: Top Issues Facing Retail CIOs
Retail Strategy: Top Issues Facing Retail CIOs
David Dorf, Oracle
It wasn’t long ago that the main expectations for the retailer CIO were to keep the servers running, desktops patched, and store-based POS systems taking money. Today, the CIO fulfills a more strategic role, one that impacts the organization’s ability to adapt to changing consumer preferences, preserve margins and serve customers. Here is a look at the top issues facing retail CIOs today:
1) Your New Job: Drive Customer-Centric Innovation.
Let’s face it, it’s not enough to just sell products. The best retailers are those that continually improve the customer experience. CIOs need to unify customer data, improve merchandising science, and reduce integration costs. In the store they need to adopt changing security requirements, enable new emerging payment methods, and turn “showrooming” traffic into loyal customers. Online they must adopt the latest e-commerce techniques including marketing automation, re-targeting, social interactions, and improved search. As the technology leader of the organization, the CIO must champion this type of innovation everywhere.
2) Rethink Budgeting and Push Expectations.
Retailers often complain that too much budget and staff time is consumed by expensive legacy systems and integration, areas that may not directly impact business growth. A recent IDC Index, commissioned by Oracle and featured in this LinkedIn post by Oracle president Mark Hurd, calculates the complex cost of IT, especially the cost of integrating mismatched applications. This is leading CIOs to consider cloud technologies, engineered systems, and pre-integrated solutions. CIOs must consider alternate models that allow them to spend more on the things that propel the business forward while retaining the value of existing investments, improving security, making compliance easier, and delivering business benefit with fewer risks.
3) Infatuate Your Customers with Your Brand.
There are many opportunities to earn a customer’s loyalty with better service. Whether it’s an email asking why she left items in her cart, a store associate that goes the extra mile to find an item in the right size or color at a nearby store, or a discount saying thank you for a good comment on Facebook, these are the types of personal touches that let the customer know that you appreciate her business. All of these gestures are enabled by systems the CIO puts in place. CIOs must partner with other lines of the business, like marketing, to explore and discover ways in which to surprise and delight customers. This allows the CIO to embrace the business goals at hand and to stay focused on the customer.
4) Consider Deployment and Empowerment.
Today’s customers expect to interact with retailers on their own terms. That means enabling in-store conversations using a tablet, ringing up purchases outside during a sidewalk sale, and responding quickly to complaints on social websites. CIOs need to lead the charge for adopting modern systems that connect customers to the brand, and keep those customers engaged.
Employees need the right tools to make every customer interaction a memorable one.
A survey of retail CIOs worldwide takes a look at the new democratic relationship between consumer and retailer. The single biggest challenge, says CIOs, is to understand, empower and represent the new digitally empowered consumer operating across all touch points including mobile.
5) Blend Art and Science in IT.
In the past, merchants, planners and other retail teams relied on their collective instincts to make good decisions, but today’s competitive market requires a strong dose of science as well. Retailers are awash in data, and it’s time to put that data to work to improve the business. CIOs should be considering how to convert data into information, then inject business intelligence in all processes. CIOs must monitor the maturation of big data technologies and determine which ones add the most value to the enterprise. Retail companies do their best when the art and science are mixed correctly.
Why is the need for applying science to retail decision-making so urgent? Internet-only companies are data-driven in ways that traditional retailers simply haven’t experienced. Cutting-edge retailers rely on data mining and optimization technologies to better serve customers and grow their market share, counterbalancing instinct with data driven insight.
6) Embrace New Technology.
Leading retailers have created standalone labs that are busy exploring emerging technology and its application to the retail business. Often these labs are established through an acquisition, thus tapping directly into the startup mentality. CIOs must make a concerted effort to stay informed of emerging technology and consider the implications of a continually changing market. They must encourage those around them to experiment and question the old ways. They must show vision and think strategically when it comes to moving to new technologies.
7) Connect with Your Customers.
CIOs must stop thinking of their departments as cost centers and proactively contribute to growing the business. And for retail, this starts and stops with serving customers. In the modern retail organization its not just marketing that owns the customer – every department, including IT, has a stake in making customers happy.
8) Design and Deliver a Transparent Enterprise.
There’s no corner of the business that’s not touched by technology, affording the CIO a unique perspective across all business units within the organization. From this vantage point CIOs are responsible for cultivating and sharing insight with the rest of the enterprise. They must find ways to help employees better collaborate, so that planners, merchants, marketers, and sales associates can access information faster and make better business decisions.
The CIO job has never been more challenging, and for retail CIOs the requirements cross all aspects of the business from digital retailing to security and enterprise operations. Success means a direct impact on business growth and the customer experience.
David Dorf is VP of retail technology strategy for Oracle.