Check out any of the recent retail trade publications and there’s a good chance you’ll see an organization that has brought in a new Chief Technology Officer (CTO). In the past few months, there have been plenty of announcements, from Neiman Marcus, to J.C. Penney, to Wayfair — and those are just some of the largest retailers we’ve seen. These announcements are a sign that retail CTOs are becoming more public-facing, more strategic, and more strongly tied to core business operations.
This is a distinct shift from pre-pandemic retail, where CTOs worked in their own silo, keeping tabs on new tools and systems, and keeping the lights on (from a tech perspective).
But ever since “phygital” became a more trendy word for “omnichannel,” the retail CTO has become a strategic key to success. Today’s CTO is overseeing initiatives designed to drive overall business growth. In fact, according to Forrester, one out of every ten tech executives will have their performance tracked on revenue. It’s proof that technology is now playing a pivotal role in core retail business operations.
It’s easy to see why. Technology is the only way to gain necessary insights into the customer experience.
Pre-pandemic, retailers may have collected a lot of data, but they didn’t do much with it. A whopping 75% of companies that Deloitte surveyed said they weren’t using a single set of tools and methods to access and analyze their data. In other words, they had countless pieces of data scattered across multiple systems, and since none of it was linked together, it was far too cumbersome to try and actually glean insights from it.
Fortunately, CTOs have a simple solution — unify data sources into one ecosystem so that actionable insights are easy to spot.
This is the lifeblood of success for today’s retail CTOs. After all, data doesn’t just give you buying and selling information. It gives you invaluable preference data that you can use to create a personalized customer experience. That’s never been more important than it is now, as McKinsey reports that 71% of customers expect a personalized experience, and 76% of them get frustrated when it doesn’t happen. Right now, the fastest-growing organizations drive 40% more of their revenue from personalization than slower organizations.
In addition to bottom line value, the comprehensive data that the CTO’s team provides shows trends that can affect decisions throughout the C-suite. After all, if you knew that sales of certain products surged at a certain time of the year, or that customers tend to buy much larger quantities of certain products, or that customers in certain locations tend to follow specific shopping trends, you can use those insights to make staffing decisions, inventory decisions, and financial forecasting decisions.
Now that CTOs have moved to the center of the retail organization chart, they face a big goal — grow loyalty. As IBM CEO Arvind Krishna pointed out during NRF, it is no longer about customers being loyal to a particular store. Now, stores must be loyal to the customer by providing an experience that aligns with each one’s habits, preferences, and expectations. And as our CEO, Catherine Tabor, pointed out in Forbes, retailers must continually find ways to interact with customers that reflect how they live, not just how they interact with that particular brand.
None of that can happen without the right technology, and now CTOs have been tasked with finding, implementing, and optimizing it so the business can experience as much growth as possible.