Lessons from the Field: Interim Chief Digital Officer

interim chief digital officer

What is the role of a Chief Digital Officer, or CDO, in a retail organization?  

The role of a Chief Digital Officer is to lead digital transformation, defining and executing a strategy for a step-change in growth and the required fundamental changes throughout the company to achieve the vision. If executed successfully, a digital and customer-centric perspective will ultimately be infused throughout the organization. This phases out the need for a separate CDO executive. Not every retailer needs (or can afford) a permanent Chief Digital Officer, but an interim CDO can come in to develop a digital roadmap for growth, assess and implement foundational systems and processes and train or hire permanent team members to continue executing and updating the roadmap.  

After 17 years of my leading e-commerce and digital teams, ranging from established brands and multi-brand retailers to direct-to-consumer startups, in both permanent and interim roles, I am often asked what are the first things to focus on when starting out.  

 

What is the best approach to set the stage for transformational growth when you enter a retail organization as a Chief Digital Officer and take over the digital reigns?  

I have developed the following framework to help me navigate vastly different needs in my time as CDO: 

  1. Run day-to-day business
  2. Audit of existing business 
  3. Assess analytics gaps and develop analytics plan
  4. Develop a digital roadmap 
  5. Start executing the roadmap

In this blog post, I will explain each area in more detail:

 

1.Run day-to-day business

Management, in general, is a balancing act between running the day-to-day business and planning future growth.  When you are brought into a company on an interim basis with a mandate to accelerate growth, it is especially important to manage this balance effectively. This is so that you can deliver on the mandate and not get bogged down in reacting to daily business. Tactics vary by situation, but I have found some combination of the following methods to be effective: 

  • Identify a few quick-hit wins that will immediately generate a lift in business and give you some breathing room to focus on strategy
  • Identify a capable manager/operator within your existing team to focus on the day-to-day so that you can spend more time upfront on strategy
  • Manage expectations with the CEO and Board of Directors regarding your priorities and provide a clear timeline of when changes will start to impact the business

 

Ultimately, though, you are responsible for business results the second you step into a leadership position, so this balance will need to be continually managed.  

An immediate priority that should not be delayed or glossed over is getting to know your new team to understand responsibilities, perspectives and career, and personal goals.  This encompasses all members of your team (direct reports on down), as well as other managers across the organization. I have found that a combination of coffees, lunches, happy hours, dinners and office 1:1’s are helpful not only to build relationships but also to hone in on overall frustrations and understand the company culture and level of collaboration both within and across departments.

 

2. Audit of existing business

Your best opportunity to be objective in analyzing the existing business is at the very beginning of engagement before you get influenced by other opinions, perspectives, existing processes, bottlenecks, etc.  When I start an engagement, as I delve into the day-to-day, my simultaneous priority is performing a thorough audit of the business. My approach is very tactical: focused on identifying problems, opportunities for improvement and key strengths to further leverage, along with corresponding recommendations.  I care less about creating a beautiful powerpoint presentation, although presentation format ultimately needs to be tailored at some point to the relevant stakeholder preferences (note that this does not necessarily need to be done by you).  

I break down the audit into front-end and back-end functions.  It is not possible or efficient to be completely exhaustive in each area and I will tailor the audit to the particular company type and need. A general breakdown of areas to consider are as follows:

 

Front-End

  1. Competitive digital climate 
    • Distribution, assortment, pricing, promotional, marketing
  2. Digital Experience: owned channels
    • Mobile and site design and UX
    • Content and SEO
    • Assortment and merchandising
    • Functionality 
    • The site and mobile performance
  3. Digital Experience: marketplaces & wholesale channels
  4. Social channels
    • Overall strategy and interplay with brand, content and paid marketing
  5. Marketing
    • Acquisition
    • Retention
    • Customer data and technology

 

Back-End

  1. Analytics and reporting
  2. Technical site audit
    • Core code audit
    • Integrations 
  3. Operations
    • Logistics
    • Customer Care
  4. Integration across channels (can be addressed above within 2. Technical and 3. Operations or broken out into separate sections of significant areas for improvement)
    • A unified view of the customer
    • Omnichannel

 

In performing the audit, I always start from the customer perspective, particularly across the front-end areas.  Depending on complexity and need, I may bring in expertise to perform a more thorough audit of back-end functions.   Depending on the importance or potential of international markets, relevant functions by major market could also be included in the analysis.  

 

3. Assess analytics gaps and develop analytics plan

As you embark on the audit, an early priority is ensuring accurate and comprehensive analytics are in place. Good data is a prerequisite to measuring the effectiveness of the changes you make. It is also a critical foundational pillar for the company to achieve future growth.  Look to ensure analytics and reporting are well implemented across the following areas:

 

  • Web analytics and testing

Whether it is the free version of Google Analytics or a more robust paid platform, the earlier you can address any implementation issues the happier you will be. In addition to core analytics, consider a testing or experimentation platform if not already in place.

 

  • Customer data

This tends to be the messiest area with a wide range of platform types (e.g., CRM, CDP, Relationship Marketing, etc.), technologies and integrations that can be in the mix.  The first question is determining if the company has an accurate unified view of its customer data across Direct-to-Consumer channels and, ideally, beyond. If there are significant data integrity issues or no solution is in place, then plugging this gap should get high priority in your digital roadmap.  Ultimately, you will want to validate, or develop if absent, an accurate customer LTV model.

 

  • Acquisition Marketing

Reporting across different marketing channels may be disjointed, especially if third party agencies are involved.  I often encounter a retailer relying on agencies and platforms to self-report attributed revenue. This then results in overlapping revenue attribution and murky Return on Investment (ROI) and Customer Acquisition Cost (CAC) metrics.  A consolidated view of all marketing and traffic sources with a deliberate attribution model is key to understanding and planning marketing effectiveness.

 

  • Merchandising 

Product sales and margin reporting should include views at the category to SKU levels and marry to web analytics so that path to purchase funnels can be readily analyzed.  Ideally, reporting will be cross-channel, particularly across DTC, so that trends, discrepancies, and inventory can be optimized.

 

4. Develop a digital roadmap

Now it’s finally time to craft your strategy for growth and plan the future!  Your audit should yield a slew of recommendations. I organize the recommendations and additional analysis into (1) big strategic ideas and plugging of gaps that can lead to transformative growth and that tend to have many dependencies and (2) tactical optimizations.  Everything needs to be scoped, prioritized and timelined based on a number of considerations including:

 

  • ROI, ideally at the contribution margin level
  • Resources required
    • Do those resources and capacity already exist within the organization?
    • If not, do those resources exist outside the organization (i.e., agency relationships already in place)
  • Timeline
  • Dependencies
  • Complexity and risk
  • Cross-functional support needed
  • Budget considerations and organizational approval process
  • Is it a capital expenditure or operational expenditure?

 

Along with a digital roadmap, it is important to present a financial plan to show the impact of your recommendations on the business.  My preferred format is a 3-year monthly plan developed bottoms up for each major traffic source/channel. This can be further broken out by geography if there is a substantial international business.  I detail baseline traffic, conversion, revenue, operating cost, contribution margin and capital cost assumptions. I then phase in all substantial priorities from the digital roadmap and show their incremental financial impact.  This makes it easy to perform scenario analyses showing what would happen if you include/exclude certain initiatives (particularly important as you discuss and present your plan to different stakeholders and go through budget approvals).  

The roadmap should also detail the evolution of your organization, with clear roles and responsibilities outlined, and the phasing of internal vs external resources.  

 

5. Start executing the roadmap (as Chief Digital Officer)

Finally, it should incorporate continual testing and optimization of any changes you make.

I view a digital roadmap as a “living document” to continually challenge, reassess and update as learnings develop and business needs/strategy change.

After you have an approved plan and roadmap, you get to really dig in and focus on the next phase and most important as a Chief Digital Officer: the execution! 

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Ilan Tito

Interim Head of Ecommerce, Digital Transformation & Merchandising Strategist for clients including Cartier, MAC Cosmetics, Francesca's, Theory, John Hardy and Robert Graham.

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