5 New Imperatives for Retail CMOs

Marc Dietz
Marc Dietz
Chief Marketing Officer

The role of the CMO across all industries is rapidly evolving, but in retail, the industry itself is undergoing major disruption and rapid transformation, requiring CMOs to proactively drive and lead change initiatives.

Talk about a perfect storm. As if the role of the CMO isn’t changing fast enough in all industries, the retail industry itself is undergoing major disruption and rapid transformation. As a result, retail CMOs certainly have their work cut out for themselves. While by no means a comprehensive action plan, this article addresses five key imperatives that sit squarely in the eye of this storm.

1. Go Beyond a 360-Degree View of the Customer, or Your Competition Will

As CMOs in all industries now build “360 views” of customers as comprehensively as they can, retailers need to go even further. Not further than 360 degrees, of course, but expanding the horizon to better understand not only customers but shoppers and browsers in the stores as well.

Online shopper insights have been evolving a great deal over the last 15 years whereas in the stores there has remained a black hole of information. We’ve known from basic traffic counting how many people come into stores and if they swipe a loyalty card at the POS, we then know a great deal about them.

But, what about those shoppers who don’t make a purchase? Are they new or repeat shoppers? What percentage of male versus female or different age groups shop your stores? Are they tourists or locals? Did they drive a mile or 50 miles to get to the store? Where did they shop before and after they visited your store? And, once in your store, how did shoppers use their mobile devices?

Especially with traffic down in brick-and-mortar stores and rapidly changing consumer behavior across channels, retailers today cannot afford to let their competition know more about their shoppers and customers than they do.

2. Become BFFs with Your Head of Stores

Much has been written about the changing role of the CMO and the need to act as champion for the entire customer experience. As I highlighted in a recent post about not separating Customer Experience and Branding, Warby Parker has built a remarkable retail brand very quickly in part based on delivering an outstanding customer experience.

But it’s always easier to start something new without a lot of legacy process and structure. What about retailers who have hundreds or thousands of stores and years of corporate politics?

Both the imperative and opportunity are magnified and the need for the CMO and Head of Stores to act together is critical. Retailers must succeed in creating a seamless omnichannel experience and many efforts and budgets are going towards online and now mobile experiences. But 93% of retail sales are still finalized in the physical stores and the touchpoints that can make or break the customer experience are myriad.

How do staffing levels improve or destroy customer experience in the stores? How do the layout of the stores, queues at the service areas, signage, and sales associate interactions translate into a better or worse customer experience? Just as it’s critical for CMOs in any industry to cultivate closely aligned partnerships with their CIOs, it’s imperative for retail CMOs to do so with their store operations counterparts. 

3. Capitalize on In-store Mobile Shopping

As mentioned above, part of better understanding shoppers in a retail store environment includes better understanding how they use, can use, want to use and would be willing to use their mobile devices as part of the in-store shopping experience.

While not the hot buzzword it was a couple years ago, perhaps, one important challenge is still showrooming – shoppers in a physical retail store experiencing a product that they then buy online from a competitor, at times while still standing in your retail store. Today, retail CMOs can now know which websites shoppers are navigating to, what they are searching for, what the results are including prices displayed, and even what items they add to a shopping cart.

Armed with this knowledge, retailers have the opportunity to define proactive and reactive tactics: proactive to encourage shoppers to engage first with your own brand when on their mobile device and also a clear value proposition that keeps the sale in the store or at least with your brand; and reactive in the cases where there is a real-time opportunity to engage and reinforce your brand value for next time or perhaps even “intercept” that sale before you lose it. 

4. Find Your Brand’s Own Line Between Personalized and Creepy

A hot topic for CMOs in all industries today is defining the line between what is considered personalized and what is just creepy. Becoming more relevant and more personalized in how a retailer engages with customers is no longer a new imperative. Nor does “don’t be creepy” require any discussion. But the imperative lies in the subjectivity of the topic and the differences across industries, brands, customer segments, individual customers, or even the same individual customer in different channels or with different communication vehicles.

So where is the line between creepy and personalized? The answer is, of course, “it depends.” It depends on your brand, the level of trust that exists with your customers, the content, and the context.

Is it creepy for Amazon to suggest what else you might like to purchase? Is it creepy for a Nordstrom personal shopping assistant to recommend a look based on what you purchased before and a real-time optical scan (i.e. with their eyes) of your body type, hair color, and skin tone? With today’s changing retail landscape, this kind of brand-customer-content-context-medium audit should be done at macro- and micro-levels, and is now even more critical considering new personalization capabilities such as proximity marketing, smart fitting room technologies, targeted offers via SMS, and even sales associate training for in-person engagement and post-sales follow-up.

5. Push the Envelope on Experimentation and Measurement in the Stores

One of the biggest changes in the CMO role and marketing discipline in recent years has been the need to be even more data-driven. Measure, measure, measure. Test and learn. Again, not new imperatives at this point. And in the digital space, much of this is pretty easy., such as A/B testing email subject lines for better open rates or greater conversion.

But in the stores, it has been much more difficult. We can measure redemption of a physical coupon or changes in sales at the POS, but until now, it’s been nearly impossible to appropriately attribute sales to a given tactic. How did a new marketing campaign perform with respect to driving shoppers into the store? How did a cross-channel campaign from online to store actually convert to sales? What impact did signage, mobile-based personalized communications, or other in-store offers have on traffic, conversion, and sales?

Attribution is clearly a double-edged sword … it is increasingly difficult to measure ROI on a given tactic with multiple things going on and yet we, as marketers, need to move fast and experiment more with multiple programs and tactics. It is easier to choose either/or but the imperative on retail CMOs today is to find a way to do both.

In summary, it’s anyone’s guess as to whether it’s the retail industry or the role of the CMO that is changing faster. But clearly this perfect storm, the confluence of both changing so rapidly, faced by CMOs in the retail industry is raging. Just like any strength could be eroded by a threat in a classic SWOT analysis, every imperative is also an opportunity. I believe those retail CMOs who best capture these opportunities will be the ones to ride out this storm, perhaps not to calmer waters, but to long-term customer loyalty and growth.

What are your thoughts on the role of CMOs in retail? Join the conversation on Twitter at @MarcDietz and @RetailNext