A New Outlook For The Retail CMO
By Paul Donovan, global senior director, solution management, SAP
The omni-channel migration within retail has had far-reaching implications. Consumers demand to shop when, where and how they want, while expecting a consistent experience across channels. This has not only impacted sales models but marketing strategies as well.
To keep up with consumers, the retail chief marketing officer job description has changed, and will likely continue to change for another three to five years. Once known for traditional sales enablement and advertising, the CMO role now requires an intimate knowledge of multiple (and emerging) communications channels, the ability to create and target customer personas, an understanding of big data, analytics and the tools required to uncover consumer insights, and an awareness of how all these variables apply to the customer journey.
This means that CMOs are now dealing with roles and responsibilities that overlap with the chief information officer and chief technology officer, overseeing complex data and product innovation platforms to predict, understand and align with consumer behavior. To justify new strategies and tools, and hone in on the right activities that will move the needle, measurement has become an even more critical element of the CMO role.
Results and ROI
With no real consensus on how to measure ROI on advertising, it’s always been tricky for CMOs to translate marketing’s effect on growth and loyalty. Now, with nearly 20 percent of budget being spent globally on digital campaigns and marketing tools, measurement is getting even more complex – and nontraditional data sources are becoming a staple in the marketer’s toolbox.
Contextual promotions and insights from big data are being used to determine best practices for improving physical or digital sales channel performance. By understanding the consumer’s entire journey and analyzing shopping patterns across all channels, marketers can determine the right assortments for stores at local levels, distribution centers or digital distribution portals.
Social sentiment is another important component to measuring ROI. By collecting and analyzing the reactions of consumers on social channels, CMOs are able to better see what promotions work and what consumers respond to. Social sentiment can even go as far as helping marketers predict seasonal trends – enabling them to increase store performance, inventory and sales.
Physical and Digital Convergence
Along with measuring the impact of marketing tools and campaigns, the CMO also now plays an important role in investment decisions for new technologies and platforms. To ensure that marketing teams are making smart and cost-effective decisions, CMOs need to be transparent with others on the management team, discuss common goals and align their desired results.
CMOs are now more likely to lead teams involved in technology decisions, ensuring that investments are made in tools that analyze campaign effectiveness, in technology that provides a consistent omni-channel experience for customers and in the technology to administer the process.
Each departmental team has a stake in, and wants their share of, the 360-degree view of the customer, so it’s wise to invest in comprehensive platforms or integrated tools that can provide customized dashboards and insights relative to each operational division.
This coordination is critical for ensuring overall profitability when evaluating complex platforms and tools, such as e-commerce, contextual digital offers and mobile loyalty apps.
On the consumer side, any technologies implemented need to support a singular overarching brand experience. With the right collaboration and technology in place, retailers can gain deeper insights, improve shopping experiences, provide a seamless omni-channel experience, and ultimately generate more sales.
Program Alignment
For digital marketing campaigns to be successful, the CMO also must take the big picture into consideration and work closely with stakeholders driving store operations and merchandising. If they don’t, not only will campaigns fail, but they may create a negative environment for the company and the consumers.
Take a mobile loyalty app for example: A branded app pushes offers to consumers based on the personalized information they’ve supplied to the retailer. The customer goes into their local retailer with offer in hand, expecting to get the product at the price advertised to them.
If the CMO’s team hasn’t connected these digital promotions with assortment planners by location, they may be pushing coupons to people where the product isn’t available or where the pricing strategies on these products don’t align.
While the retailer will likely still provide the consumer the product at the price advertised, it could ultimately affect their reputation and revenue. In the past, these disconnects may have only resulted in a minor revenue drop. However, as these programs grow and investments become bigger, so does the offer pool – and if programs aren’t aligned, it can affect the company’s bottom line.
Aligning programs and goals across a wider pool of stakeholders has become a critical role for the CMO to ensure that campaigns are effective, run seamlessly and produce the greatest ROI.
The Modern-Day CMO
The role of the modern-day CMO is becoming more difficult to define as new business models, communication channels and behaviors emerge. Today, their responsibilities include leveraging technologies, increasing cross-department collaboration, and uncovering new tools to collect customer insights and measure results – and that’s just to name a few. With each of these added responsibilities also comes the excitement of improving store performance, providing a personalized shopping experience, and connecting with consumers like never before.