Wanted: New Leaders for Retail Differentiation

A number of retailers are exploring new roles within the C-suite focused on helping them transform and evolve to keep place with consumer expectations. They're seeking leaders with priorities, authority and influence who are different from traditional chief information officers, chief marketing officers or chief merchants. These retailers are looking for leaders to drive cross-functional collaboration and governance, improve working relationships between various departments and IT, and foster executive alignment. As a result, three new C-level additions are emerging — chief digital officer, chief customer officer and chief omnichannel officer. The holder of each position is tasked with creating the business agility needed to outdistance the competition.

Which of these positions is most essential? Are they mutually exclusive? Do you need them all or are they all a leadership fad? Here’s a deeper dive into the responsibilities associated with each position.

Chief Digital Officer
The chief digital officer (CDO) is typically tasked with leading the integration of digital into a retailer’s business, thereby helping expand real-time engagement with consumers. This role tends to focus on the acceleration of digital touchpoints moreso than the transformation of the operating model.

Some retailers have created a CDO position to help expedite their mobile and overall digital presence, and, in some cases, to make up ground against their competition. This executive helps integrate digital initiatives that run across silos and consolidate all things digital. At many companies, the CDO has profit and loss (P&L) responsibility for online, mobile and social media initiatives.The CDO fosters stronger working relationships between the marketing team and IT department by bringing more knowledge of operations to the position, elevating the focus on digital outside of technology. While this is generally a business role and not a technology role, the oversight of digital platforms can create friction with the CIO, as the lines between what's digital and what's not may be blurry.

Chief Customer Officer
For retailers betting on an integrated, next-generation customer experience, a chief customer officer (CCO) provides an executive who can help reinvent the customer value proposition, exerting control over other executives involved with its implementation. The CCO position has grown out of the operating and marketing challenges created as a result of many modern consumers demanding a more responsive, integrated and fresh shopping experience. Operationally, the role typically involves acquiring new customers, retaining customers by creating more compelling experiences and increasing customer profitability. The CCO may own budgets and responsibility for brick-and-mortar stores, online, marketing and support.

Redefining a customer value proposition usually means major reorganizations around the customer. By reorganizing around a relentless focus on a tailored shopping experience, CCOs are helping drive consistency across “anytime, anywhere, anything” interaction expectations. With the power to restructure as needed, the CCO can efficiently respond to customers by aligning internal processes and organizations to evolving market need. For example, a major realignment under the CCO may bring marketing, operations, merchandise and customer service under one leader.

Chief Omnichannel Officer
Retailers looking for one leader to drive omnichannel transformation efforts and propel the needed changes into the business are typically looking to the chief omnichannel officer (COCO). Generally, this executive doesn’t have operational P&L responsibility or a vested interest in one particular channel. Instead, his/her focus is often on driving operational changes, implementing cross-channel systems and processes, and increasing collaboration. The role can be transitory — once the transformation is complete, the role may change or disappear. The addition of a COCO to the C-suite can also be a recognition that “digital” or “customer” don’t fit neatly in one bucket and that true transformation often occurs when each function works together to create more business agility. Effectiveness in the position can also be measured by how the retailer continues to capture wallet share even after one wave of disruption passes and a new one begins.

Which Leadership Choice Works Best?
Having the right strategy largely drives the right answer to this question. The emergence of these roles is typically determined by the need to drive significant change across the organization and to give a key executive the power, authority and incentive to make that change happen as quickly as possible. Since these roles are fundamentally about driving changes that will eventually become the status quo — i.e., the new face of retail — it’s possible that none of these roles will be necessary 10 years or even five years from now.

In the end, the right leader may look the same regardless of title. They should have a mix of technical and business skills, old and new perspectives, and a view of the business that crosses channels and functions. They should have the ability to align and influence leaders, and drive large-scale organizational change. Ultimately, the title should matter less than the results.

Jamie Clark is director, human capital, at Deloitte Consulting LLP, a provider of technology, strategy and operations, human capital consulting, and more. Kasey Lobaugh is the chief retail innovation officer at Deloitte Consulting LLP.