Confessions of a CDO: Not All Retail CDOs Are Set Up for Success
Retailers are going through major transformation to remain competitive and drive loyalty within their customer base. Digital business has caused many to struggle with customer experience, especially when it comes to providing that personal touch many retailers have developed over the years. However, with more data resources available than ever before, retailers are finding that a better understanding of their customer can drive greater loyalty, even on a computer screen.
To take advantage of all that data, once-traditional brick-and-mortar retailers are embracing the approach pioneered by tech companies of hiring data professionals. Some of the most innovative and successful retailers today rely heavily on analytics and consumer intelligence to drive dynamic product recommendations, personalize in-store or online displays, and much more.
One of the main roles changing the retail industry is the chief data officer (CDO). Eighty-two percent of CIOs believe there's a compelling case to hire a CDO, according to a recent Experian Data Quality study. These new executives are being hired to bring about organizational change, drive digital transformation and increase the overall use of data. That demand is certainly high, as all departments seem to want more access to data. In fact, nearly all the CDOs we spoke to (96 percent) agree that business stakeholders are demanding more access to data than ever before.
However, these CDOs face an uphill battle. Despite the tremendous demand for information, half of the CDOs we spoke to believe that while their data is a valuable business asset, they’re not exploiting it to its full potential.
Why are so many organizations unable to leverage the data they have? While there are many reasons for this, chief among them is the ability to access data. Furthermore, limited budgets to invest in data platforms and a lack of skilled staff coupled with the volume of information can make it nearly impossible for organizations to exploit their data, even with a CDO in place.
While these are challenges that can be tackled with the right executive in place, CDOs we spoke with are not all set up for success within their businesses. There's a wide gap in terms of the budget and resources given to CDOs in order to enact the required data changes, which for some retailers can be extensive. Here are just a few of the issues we found that hinder CDOs:
- only 47 percent of CDOs are given a clear remit or objective when they join an organization;
- less than half are given the appropriate staffing for their office;
- only a quarter are given authority over data across departments; and
- CDOs are given budget and applicable technology just over half the time.
To enact the changes needed, retailers need to hire a CDO. However, just as importantly, they need to invest in the office of the CDO. The only way these new, and frankly expensive, hires are going to be successful is if they're given enough authority and resource to do their jobs well.
While the level of investment in the CDO is going to be different for every organization, there are some common investments we've seen from our research. For example, team size for a CDO will range from eight to 50 people, and the office will often have an annual budget of between $500,000 and $5 million. While those are very wide ranges, they show that the CDO isn't just a role to hire with little investment.
Investing in the CDO role is a good bet, especially given the trends in retail today. However, make sure your CDO is set up for success and has the authority and budget to make the necessary improvements that will enact real change for your business.
Thomas Schutz is senior vice president, general manager at Experian Data Quality, a provider of data quality software and services.
Related story: Do Retailers Trust the Data That Drives Them?