The Changing Roles of Retail CMOs and Their 5 New Imperatives

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\"CustomerThere’s a lot of buzz these days about new CMO imperatives around customer experience, and it’s often spoken in the same breath with age-old priorities such as branding. I am struck by this last-century disconnect, still all too prevalent in many companies. Since when are branding and customer experience two separate things?

I realize if we ask 20 marketers to define branding we’d likely get 20 different and not altogether incorrect answers. But for me, the definition goes something like this:

Your brand is the sum total of all experiences both positive and negative that your customers have with you, whether initiated by you or not.

Notice how the combination of “customer” and “experience” is really the core point?

Brand and Reputation

It’s important to note there is a subtle difference between brand and reputation, as well as between branding and your brand. Your brand is more than your reputation—although reputation heavily influences it—and your brand is also not entirely under your control, as it’s defined by the results of customer experiences you didn’t plan as much as the branding actions you did plan. Finally, of course, your brand is also shaped by the degree to which customers share their experiences with others.

Author Jay Baer, defined branding a few years ago, writing, “Branding is the art of aligning what you want people to think about your company with what they do think about your company. And vice versa.”

In just five years, Warby Parker has illustrated the inherent linkage between customer experience and brand. Pricing is part of the Warby Parker value proposition, but its innovations with omnichannel and in-store retail are key. The company states: “Our retail spaces combine the snappy ease of online ordering with the fun and serendipity of real-life shopping (with a photo booth or two). We can’t wait to meet you!” And, Warby Parker lives up to that—great experience, great brand.

Stormy Seas of Change

So while reputation, brand, branding and customer experience have specific differences, they should be considered simultaneously and holistically, regardless of the company and its industry. And as if the role of the CMO isn’t changing fast enough, the retail industry itself is undergoing major disruption and rapid transformation—in equal parts due to innovative disrupters such as the Warby Parkers and a newly empowered shopper who is clearly in charge. As a result, retail CMOs sit squarely in the eye of the storm, but look to five key imperatives that can guide them to calmer waters.

1. Go Beyond a 360-degree View of the Customer—or Your Competition Will

As CMOs in all industries now build comprehensive “360 views” of customers, retailers need to go even further, expanding the horizon to better understand not only their customers, but also their shoppers and browsers as well.Online shopper insights have evolved a great deal over the last 15 years, but a black hole of information still persistsin most stores. We’ve known from basic traffic counting how many people come into stores, and if they swipe a loyalty card at the POS, we can then finally know a great deal about them.

But what about shoppers who don’t make a purchase? Are they new or repeat shoppers? What percentage of male versus female, or different age groups shops 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?

With traffic down in physical stores and consumer behavior changing rapidly across all 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

The need for the CMO and head of stores to act in concert is critical. Retailers must succeed in creating a seamless omnichannel experience. Many efforts and budgets have been focused on online experiences, and now there is a huge shift to mobile. But 93 percent of retail sales are still finalized in the physical stores, and the touch points that can make or break the customer experience are myriad.How do staffing levels improve or destroy customer experience in the stores? How do layouts of stores, queues at 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’simperative for retail CMOs to do so with their store operations counterparts.

3. Capitalize on In-store Mobile Shopping

Understanding shoppers in a retail store environment better includes a firmer understanding of 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, showrooming remains an important challenge—shoppers experiencing a product in-store, then buying online, sometimes while still standing in the physical store.

Today, retail CMOs can know which websites shoppers are navigating to, what they are searching for, what the results are—including prices, and even what items are added to a shopping cart.

Armed with this knowledge, retailers have the opportunity to define proactive and reactive tactics. Proactive includes encouraging shoppers to engage first within the brand on their mobile devices, with a clear value proposition that keeps the sale in-store or within the brand. Reactive includes 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. Draw Your Brand’s Line Between Personalized and Creepy

Becoming more relevant and more personalized in how to engage customers is no longer a new imperative, and “don’t be creepy” requires little discussion. Rather, 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 both macro- and micro-levels. This 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 marketing discipline in recent years is the need to be 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).

In stores, it’s much more difficult. We can measure redemption of a physical coupon or changes in sales at 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 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 faster and experiment more with multiple programs and tactics. It is easier to choose either/or but the imperative for retail CMOs today is to find a way to do both.

Changed Role and Integrated Approach

Whether a CMO’s approach to branding and customer experience has been fully integrated or not, it is encouraging to see a new consolidated focus emerging, especially as it relates to the CEO. A recent joint study published by Gartner and The CMO Club highlighted the “CEO’s number-one increased expectation of CMOs is to step up leadership of the integrated cross-functional customer experience.” Now, that is great to see, especially in retail.

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, the confluence of both is creating a perfect storm raging directly at retail CMOs. Just as any strength could be eroded by a threat in a classic SWOT analysis, every imperative is also an opportunity. 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.

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