The line between CIOs and other C-Suite executives in the retail sector is rapidly blurring. Traditionally, the retail IT department was a cost center, responsible for supporting marketing, finance, and supply-chain operations. In many cases, IT was mostly concerned about managing third-
party vendors to automate and minimize the cost of back-office functions.
Now all of retail is about innovating on behalf of the customer, and focused on being where the customer needs the retailer to be. Technology—and thus the CIO—is front and center in this transformation.
According to a new survey by Forbes Insights sponsored by VMware, within five years, retail CIOs will be directing complex, global omnichannel strategies as next-generation technologies completely transform the retail marketplace.
Perhaps even more significantly, more than half of CIOs surveyed (55 percent), believe they will head profit centers within five years. Profitability, not operational efficiency, will be the yardstick by which retail CIOs’ success will be judged.
Technology is driving the new retail
Among other responsibilities, retail CIOs today have taken on managing just-in-time inventory; automating back-office and warehouse operations; using mobile devices to empower associates to better serve customers; and enabling seamless consumer self-service, such as buy-online-pick-up-in-store experiences.
Amid all this disruption, the role of the retail CIO has changed dramatically—from ensuring that the lights remain on and operations run smoothly to becoming the most important executive for overall business success in a transformed retail universe.
Nearly eight in 10 (79 percent) of retail CIOs are primary drivers of innovation for their firms, according to the survey. Three-fourths (74 percent) currently sit on their board of directors. And as further proof they’re leaving technical operational tasks behind, 60 percent of retail CIOs believe they will be responsible for overall corporate strategy within five years.
Two trends in particular are putting the CIO in charge: the direct-to-consumer (DTC) movement, and mobility.
The DTC movement
Traditional brick-and-mortar retailers have publicly struggled in recent years—with the closing of thousands of their stores—as digitally native e-commerce firms that sell directly to consumers online steal huge swathes of market share. In response, they’ve begun investing heavily in online operations and modern technologies. To call the retail marketplace chaotic is an understatement.
Retail CIOs already enjoy considerable responsibility and power as they take control of rapidly changing environments. A full 84 percent of survey respondents—the highest of any industry—are key decision makers on corporate strategy, with 82 percent reporting directly to the CEO. More than three-quarters (78 percent) also say they are the primary decision makers for corporate acquisitions. This is extraordinarily important in today’s heated retail merger & acquisitions (M&A) market as traditional retailers snap up innovative online brands.
The mobile-first directive
Then there’s mobility. Providing better online and offline shopping experiences for consumers through mobile is now de rigor. Today’s consumers expect both in-store and online mobile experiencesthat are fast, convenient, and secure. CIOs have to be on top of this, or risk losing loyal customers.
Emerging technology is at the heart of today’s retail
Before the e-commerce explosion and the meteoric rise of Amazon, retail wasn’t known as an early technology adopter. Today, retail is on the cutting-edge when it comes to investing in emerging technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT).
Today’s top priority for retail CIOs is AI. This makes sense given the huge volumes of demographic and transactional data that merchants collect, store, and attempt to analyze
IoT is the second-highest tech priority, and the combination of AI and IoT is a powerful one for retailers. For example, retailers can pinpoint consumers’ precise geographic locations via their smartphones, and serve up special price discounts or advertisements when they are close to or shopping within physical stores.
Retailers can also gain tremendous insights by analyzing customers’ online browsing and overall purchasing behaviors—both online and in brick-and-mortar stores—to determine when customers are window shopping, making price comparisons, or are ready to purchase.
Looking ahead to 2025, AI stays on top, but ML moves into second place of importance. As a subset of AI, ML will help retailers churn through their massive volumes of data, identify patterns and trends, and gain insights not otherwise visible to human eyes. These insights are expected to bolster both bottom-line and top-line initiatives.
Partnership is important
Being a retail CIO today means being agile, adaptive, and responsive to a swiftly moving—and increasingly global—digitally sophisticated market. Retail CIOs are not alone, however, in their transformation journeys. A cooperative workforce together with reliable, expert partners will be their allies as they transform products, services, and channels to meet evolving customer demands.
To see the full results of the Forbes Insights study, CLICK HERE