The new position of chief digital officer appears to be popping up at more and more retailers these days, reflecting these companies’ desire to find new ways to enhance the customer experience in the modern shopping environment.
Both Ahold and Dollar General in the past week have announced the creation of new chief digital officer (CDO) roles, which will include a focus on customer-facing digital innovations, such as those involving loyalty programs.
“One of the thing a CDO is being asked to do is convert traditional business channels and practices into digital ones,” said Jose Tamez, managing partner at executive search firm Austin-Michael.
In general, these positons combine elements of technology, operations and marketing, Tamez said. Thus, the new role can create blurred lines in terms of job responsibilities and day-to-day functions, as the historic leaders of these three divisions cede some of their responsibilities to the CDO.
“Digital has been around forever, but the chief digital officer role is a new one, and anytime a new role emerges, ambiguity usually seems to end up creating opaque goals and desired outcomes,” he said. “That can be problematic from the outset.”
In addition, he noted, many of the outcomes and benchmarks for the new role can be difficult to define, as the technologies involved are evolving rapidly.
“A lot of the CDO’s role is tied to areas that are changing all the time, such as mobile, e-commerce and social media,” Tamez said. “Those are all moving parts.”
The companies creating the new CDO roles seem to lean heavily toward their marketing responsibilities, particularly where they intersect with technology.
At Zaandam, Netherlands-based Ahold Delhaize, the company said Hanneke Faber, who had been leading the company’s online retailing efforts as chief ecommerce and innovation officer, is leaving the company at the end of the year to become president of Unilever’s European division. Her successor will have the title of chief digital officer, and will be responsible for driving digital transformation and innovation, including loyalty data analytics and personalization.
The move comes as Ahold has been restructuring its e-commerce divisions to become more integrated with its traditional supermarket operations. Since February of this year, the brand president of U.S. e-commerce provider Peapod has been reporting to Kevin Holt, chief operating officer of Ahold USA, and beginning in 2018 the brand president of bol.com, Ahold’s e-commerce division in the Netherlands and Belgium, will report to Wouter Kolk, chief operating officer for those countries.
“In the past years we have made good progress in making the local customer experience seamless anywhere, anytime across our brands by combining thriving networks of bricks-and-mortar stores and strong online businesses,” said Dick Boer, CEO of Ahold Delhaize.
He reiterated that the company is on track to a record close to 3 billion euros (about $3.4 billion U.S.) in e-commerce sales in 2017, and nearly 5 billion euros ($5.8 billion U.S.) in annual sales by 2020.
Meanwhile Dollar General has created a new position called chief digital and customer engagement officer, and has named Rob Scruggs, formerly global director of client experience for Bank of America Merrill Lynch, to fill the position.
“Rob brings a strong record of successful innovation in developing customer experience strategies across complex industries,” said Jason Reiser, executive VP and chief merchandising officer at the Goodlettsville, Tenn.-based discount chain. “At Dollar General, Rob’s experience will help accelerate our digital strategy as we continue to focus on developing digital resources that can help our customers save time and money.”
It’s not clear what Scruggs’ mission will be at the chain, which has had a minimal e-commerce presence since it launched an online sales platform in 2011.
In Dollar General’s second-quarter earnings call in August, CEO Todd Vasos said the company’s customers were overall “later adopters” of digital technologies than other segments of the population, but he hinted that the company has some digital marketing initiatives in the works.
“We're squarely focused on driving our customers into our 14,000 locations through any means that she wants to engage with us, to include digital,” he said in the call.
Vasos noted that Dollar General now has 10 million subscribers on its digital coupon platform, and it also offers a mobile app. In a previous call, he noted that Dollar General has been seeking to drive loyalty by integrating its traditional and digital marketing channels.
Tamez said the addition of a CDO role has become a bit of a “me-too” initiative at some companies.
“It's a fervor that’s being self-perpetuated in the industry, somewhat akin to major league baseball franchises adding analytics people to their front offices," he said. “They should consider it, but a lot of it is being driven by the fervor in the marketplace.”