Should retail CMOs own the customer experience?

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Should retail CMOs own the customer experience?
Should retail CMOs own the customer experience?

A study released today by Retail Systems Research (RSR) says that CMOs made sizable gains in influence at retail chains in the past year. Still, they have yet to claim ultimate control of the customer experience.

Analysis from the company, which consults retail businesses on technology issues, finds that retail marketing leaders seem to be in a transition. They're contributing to important initiatives, but lack the control or influence required to be successful as retailers "transform themselves into customer-centric organizations,” according to the study, which was sponsored by SAS and NCR.

Asked who in their companies were responsible for the customer experience, 22% of the 133 retail executives surveyed by RSR named the chief marketing executive--a percentage that increased nearly 50 percent over the past year. Over the same period "ownership" of the customer experience by the VP of stores has declined  from 18% to 11%. Six percent of retailers told RSR they have designated chief customer experience officers; CEOs oversee the customer realm at 19% of chains.Yet 24% responded that their chains had designated no specific owner of customer experience, an indication that some retailers remain caught in a customer experience limbo.

“It used to be easy. People bought things in-store or online. But now retailers live in an omni-channel world in which ownership of various consumer segments needs to be defined,” says RSR Managing Partner Paula Rosenblum. “So it's troubling that a quarter of them don't have an owner of the customer experience. Who's driving the bus?”

Highly successful retail companies are more apt to have created bigger roles for marketing executives in their companies. Twenty-eight percent of these “winners”—retailers whose comp store sales are consistently above 5%, according to RSR—include chief marketing officers in their organizations. Only 5% of “laggards,” those with comps under 5%, have CMOs. According to the report, these findings suggest that the opportunities for sales growth is "exponential" for retailers that give the marketing executives the reins in terms of customer experience.

Rosenblum observes that, as the retail brand becomes more important than the products at chains, marketing chiefs are poised to exert more influence. Still, their day has not yet arrived.

“It's a fairly complicated issue in CMO ascendancy,” she says. “There are a few things at play: the consumerization of IT, the rise of private label. Retail is not as straightforward as it used to be. What [the top marketer] has to do is learn to play well with others.”

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