Why tech executives are the latest retail C-suite gold rush
This story was first published by Digiday sibling ModernRetail
Executives with backgrounds in tech are increasingly taking seats in more retail C-suites.
Multinational chocolate and candy maker Hershey tapped Amazon veteran Deepak Bhatia to be its first chief technology officer late in September. About a week before Hershey’s announcement, Sprouts Farmers Market also named its first CTO, Jim Bahrenburg. And back in April, Canada Goose appointed Matt Blonder to take on the new role of chief digital officer, where he will be in charge of the company’s consumer-facing digital platforms.
There is no denying retail is growing more technologically advanced and digital. A report from IBM and the Consumer Goods Forum this year indicates that retail executives plan to bump up their tech spending by 34% over the next three years, particularly in automation, analytics and AI, among other advancements. With new retail technology quickly emerging, high-ranking tech executives are becoming more crucial in a retailer’s operation.
“Technology is everywhere in retail from managing the supply chains to planning inventory to how brands and retailers interact with consumers online and it’s even spreading to its stores,” said Sky Canaves, senior analyst of retail and e-commerce at Insider Intelligence. “Without [C-suite executive in tech] you’re going to see a lack of coordination when it comes to what technologies to use and how best to use them, especially across channels like online and stores.”
Every retailer organizes their C-suite differently according to the needs of the company. While there are some differences between CTOs and CDOs, among other roles, executives in these tech-focused positions are generally responsible for coordinating and spearheading retailers’ tech initiatives. Sprouts Farmers Market, for example, said that its new CTO would be in charge of overseeing the “strategic direction and management of all aspects of Sprouts’ technology.” The grocer has been testing out new technology in its stores including electronic shelf labels.
“To really grow and scale business. I think technology plays a critical role,” Canaves said. “Ultimately, having a CTO should help retailers to both reduce costs and increase their revenues.”
Indeed, giving tech executives a place in the C-suite allows retailers to scale their operations and find cost-saving opportunities. Hershey said that by naming a CTO, it hopes to advance its use of analytics and automation. Hershey’s new CTO has experience in supply chain planning, optimization and automation from companies like Amazon. “We are investing in our people and digital capabilities to strengthen our infrastructure and scale across our growing supply chain and business units,” Michele Buck, The Hershey Company president and CEO, said in the press release.
Over the last three years, a number of trends that require advanced tech innovations have emerged in retail. One of which is omnichannel shopping, where people shop across multiple sales channels, including through apps, websites and physical stores.
This trend has spurred the need for retailers to make customers’ shopping experience seamless, no matter where they choose to shop. At Canada Goose, the role of chief digital officer was responsible for spearheading digital innovation and managing teams that develop its digital roadmap throughout different channels. Although it has partnerships with major retailers like Nordstrom and Saks Fifth Avenue, the majority of Canada Goose’s revenue in the first quarter comes from DTC at 55.8 million Canadian dollars ($41.1 million) out of total sales of 84.8 million Canadian dollars ($62.4 million). Mattress Firm’s first CDO George Hanson, who was appointed last month, is in charge of providing a smooth customer experience across MattressFirm.com, Sleep.com and physical stores.
When looking for a tech executive to fill its C-suite, more retailers are looking for candidates with a strong understanding of the customer journey, said Shannon Flanagan the vp and gm of retail and consumer goods at Talkdesk.
“What has now become a requirement — and this speaks to why they are now elevated in an organization or even being hired into — is that they now need to have an understanding of the customer journey at every touchpoint,” Flanagan said. “They have to have really strong business acumen as well, and in the past, that wasn’t as required.”
While some retailers are just now appointing C-suite level tech positions, others are naming new people into the role. Canaves said that retailers that are doing so could be looking for talent with experience in customer analytics, managing multiple shopping channels as well as new tools like generative AI. Nordstrom and Figs are just a few examples of retailers who have just recently named a new chief technology. Nordstrom’s new chief technology and information officer, Jason Morris, was previously at Walmart where he led global enterprise technology initiatives and was in charge of tech development in the company’s retail business.
Canaves said the addition of tech-focused leadership roles should ultimately help make their businesses more efficient. “It’s kind of a no-brainer that every major retailer or brand will have a CTO,” Canaves said. “It’s necessary on so many levels of the business, especially as brands look to deepen their relationships with consumers.”
Correction: An earlier version of this story misspelled Shannon Flanagan’s name. The story has since been updated.
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