Why chief digital officers are all the rage

May 18, 2016 10:27 AM

Target Corp. is the latest in a growing crop of retailers to appoint a chief digital officer whose job reflects the growth of online sales and the influence digital channels have on all areas of the business.

Target, No. 22 in the Internet Retailer 2016 Top 500 Guide, on Tuesday announced it had promoted e-commerce veteran Jason Goldberger to the new position. In doing so, Target became the fifth major retailer to create such a position in the past year.

“It is an indication of how important digital is for Target and how important it will be in the future,” Goldberger says of his promotion.

In February, athletic apparel manufacturer Nike Inc. (No. 47) promoted Adam Sussman to chief digital officer from head of global strategy and development. In November, nutritional products retail chain Vitamin Shoppe (No. 215) hired e-commerce veteran Rose Hamilton away from online pet supplies retailer Pet360, acquired by PetSmart Inc. (No. 340) in September 2014. Hamilton was Pet 360’s chief marketing officer. In September, luxury retailer LVMH Group, No. 56 in the Internet Retailer 2015 Europe 500, hired former Beats Music CEO Ian Rogers to be its chief digital officer, a new position.

Last June, western wear retail chain Boot Barn, No. 565 in the 2016 Internet Retailer Second 500, hired Wet Seal veteran Jon Kubo as chief digital officer. Kubo might be the only person at this point to hold a chief digital officer position twice: He served as chief digital officer for clothing retailer The Wet Seal LLC (No. 510 in the Second 500) from October 2014 through May 2015.

Executive recruiters say within the past 5 years, more retail clients have sought executive-level digital talent. And it’s no wonder. According to Internet Retailer’s 2016 Top 500 Guide, overall online sales in the U.S. grew 14.6% year-over-year compared to 3.1% year-over-year growth for store sales and 3.6% total retail sales.

“With this whole push on the consumer wanting to access your brand any time any place, digital is no longer a separate part of the business,” says Denise Kramp, who heads up the North American retail sector at executive search firm Korn Ferry.

So what does a chief digital officer do?

Hamilton, who joined Vitamin Shoppe in November, oversees a staff of 60 across departments including e-commerce, customer care, social media, analytics and digital product management.

“We’re looking at the entire customer journey and that means having a focused effort on looking at our customer; she needs help, how do we help her along the way?” she says.

With no roadmap when she started her position, Hamilton says she had to rely on her e-commerce experience, which included stints at such retail giants  as Best Buy Inc. (No. 12) and women’s apparel retail chain Ann Taylor (parent company Ascena Retail Group is No. 76).

“The biggest role of a CDO is to serve as the change agent and as a result, it’s critical to have very strong leadership and visioning skills,” Hamilton says. “Being able to move laterally, not so much straight up the chain, has been key for me. I can sit across the table from supply chain and understand the challenges because I understand the back end. I can work with the merchandising team and gain trust. Having had IT and merchandising report to me, I’ve been able to get under the hood when it comes to category planning.”  

Candidates able to fill higher level e-commerce positions in the way Hamilton has defined the role are in high demand because there aren’t many of them. “People who have a track record of figuring it out and connecting the dots without an existing game plan are extremely valuable right now,” says Margot McShane, who co-leads the consumer digital practice at recruiting firm Russell Reynolds Associates.

And the demand will probably continue. “For the last year and a half we’ve been challenged to think about how to approach this market as it transforms,” says Anthony Laudico, head of the e-commerce practice at executive search firm Spencer Stuart and a recruiter who has helped Walmart (No. 4), Wayfair LLC (No. 24), and Kate Spade (No. 140) fill executive positions. “It’s creating a need for a new type of leader, one who can work in a fast- paced environment who understands how to use data to make decisions.”




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