INTRODUCTION
There is a new kid sitting at the C-suite table. Organizations have acknowledged that traditional management will not necessarily translate to success in the current digital landscape, thus there is a critical need to cultivate new structures to in order to ensure growth and brand longevity.
Initially, the emergence of the Chief Digital Officer role was thought of as a result of the need for digital transformation strategy and execution. Today, a Chief Digital Officer’s role is to outline and execute the policies, responsibilities, and processes designed to direct and control content management, digital asset management and eCommerce systems to achieve business objectives. Essentially, the CDO is in charge of digital governance, while also stimulating the company with digital possibilities and encompassing vision, rethinking their products and services for the digital age.
This evolving position often includes developing strategies driving ROI and digital channel engagement, while reducing brand inconsistencies with support from IT and Marketing departments. IDC stated within their 2015 CIO Agenda, “By 2020, 60% of CIOs in global organizations will be supplanted by the Chief Digital Officer (CDO) for the delivery of IT-enabled products and digital services.” The next five years will hold a major shake-up within upper management, as CDOs will likely shift the responsibilities of CIOs, CMOs and CTOs, as they seize challenges and opportunities of social media, big data, the cloud, mobile media and time-to-market.
Here are five industries evolving their operations with a Chief Digital Officer presence, and what this means for the distinct arenas in which they function.
RETAIL
For companies in the retail sector, digital is the fastest-growing revenue stream and the CDO would be responsible for driving that growth. Organizations must utilize social media and enabling technologies to react to modern consumer behavior, rethinking their market and customer strategies. Often this means providing services that combine social, local and mobile elements.
- CVS: Since CVS appointed Brian Tilzer as CDO in 2013, he has been busy leveraging technology to help the company integrate more effectively with their customers. Until recently, the CVS ExtraCare card was a cracked piece of red plastic dangling from your keychain or lost inside your wallet. Today, ExtraCare is a popular app on the consumer smartphone, collecting all the Extra Bucks you once lost on register receipts and connecting you to the pharmacy for prescriptions. The ExtraCare app will even scan your prescription to inform you of refills, as well as identify loose pills after you misplace the original bottle!
- American Apparel: Last week American Apparel named their first CDO, Thoryn Stephens effective March 9th, announcing him responsible for optimizing the company’s digital marketing, data analytics, and e-commerce strategies. Previously Stephens was VP of Data Science at Tillster, the global leader in customer engagement programs for the restaurant industry, in addition to being responsible for building the first optimization programs for both Fox Network Group and P90X. He is entering American Apparel during a transitional period, as sales are down and new leadership is being pressed to consider options, including a sale of the company. Only time will tell if a CDO’s digital innovation could cease the plunge in sales and lift their current standing at 286 on Internet Retailer’s Top 500.
TRADITIONAL MEDIA
More so than any other industry, traditional media companies will have to produce innovative redesigns of their business model to stay afloat. It is imperative that businesses transform their brand as their products evolve digitally, as a 360-degree consumer experience is necessary to retain subscribers in the digital age.
- Condé Nast: Fred Santarpia was promoted from CDO of Condé Nast Entertainment to the newly developed role of Chief Digital Officer and Executive Vice President of Condé Nast in 2014. Since then he has served as digital visionary, stating that the print company can move and be successful in the video space because “we are a company of storytellers”. In January he laid out the company’s digital video strategy, explaining that the redesign includes great programming that is just as promised as the monthly magazine in your mailbox. Santarpia’s vision does not include content with a literal translation of the magazine, but more so video channels representing what each individual brand stands for. Another revolutionized operation since his hire is how the company views distribution. Content no longer solely lives within Condé Nast websites, as Santarpia believes the web to be an open space, stating “It is much easier to go to where consumers already are.” He has since distributed content to over 25 different partners across Web, mobile and OTT devices like Apple and Xbox. Condé Nast’s last disclosed point of strategy Santarpia views as it’s biggest differentiator in the marketplace: content with a dollar-for-dollar commitment in marketing support. Gone are the days of a build-it-and-they-will-come mentality, Condé Nast is now taking cues from traditional television space to rethink their digital offerings.
ENTERTAINMENT
All Chief Digital Officers should provide insight and recommendations on how to reconcile the digital experience for key target audiences, but for within the entertainment industry it is critical the company’s strategy be executed on all digital channels.
- NFL: Perkins Miller, who in 2014 launched WWE’s digital streaming network and their popular app, as well as built the company’s YouTube presence, left in April to be appointed NFL’s Chief Digital Officer. While at WWE, Miller developed the WWE Network, which offers subscribers original series, access to pay-per-views and a vast library of programming for $9.99 a month. By the time of Miller’s departure, the network had achieved 700,000 subscribers and was already turning a profit for the company. Now at NFL, Miller is still pushing to digitally connect to fans directly, this time through mobile video. In August NFL launched NFL Now, which provides game highlights, fantasy updates, classic footage and news to smartphones, tablets and Xbox One consoles. Although the content is free, some users pay $1.99 a month in order to partially skip advertisements. NFL Now has had over 9 million visits since the launch, 55% being from wireless devices and 45% from connected devices like the Xbox One. On the new way NFL reaches it’s customers Miller states, “On Sundays, Mondays and Thursdays, people use NFL Now as a second screen. On Tuesdays through Fridays, people are flipping over to Apple TV and Xbox for long-form content.”
FOOD & BEVERAGE
In the last decade tastes have shifted towards healthier, fresher and more customizable offerings within the food and beverage industry. Companies with once-winning formulas to secure young audiences are no longer succeeding, and it is showing in sales. Chief Digital Officers in this industry must think of creative ways to remarket offerings to target audiences and engage in the digital culture.
- McDonald’s: Atif Rafiq has held McDonald’s first CDO position since 2013, his latest initiative being a SXSW food truck to woo millennials. This will be the first year that the fast food chain is sponsoring the technology, film and music conference and the Fry-Fi truck will be serving up wi-fi in addition to grub. Rafiq explains the goal of SXSW involvement, stating, “We’re planning to showcase how we’re using digital to enhance the consumer experience, and naturally add true value and reduce the inherent frictions for attendees that inevitably occur because of the event’s sheer size”.
- Starbucks: Starbucks’ Chief Digital Officer, Adam Brotman, believes his company has already built one of the most successful mobile commerce and loyalty platforms in the world. Leveraging this momentum, in December Starbucks launched an added functionality to the app currently only available in Portland. The feature allows Starbucks app users to search, order and pay for items at a nearby Starbucks of their choosing. Brotman calls the capability a “natural extension” to the brand’s current offerings, not only as a customer experience enhancement but as a “game-changing business driver”. If successful the function will be spread to app users across the country, putting the payment and ordering in the hands of the consumer meaning shorter lines and longer barista creation time.
- Pizza Hut: This week at the Mobile World Congress in Barcelona, Baron Concors, CDO of Pizza Hut, in partnership with Visa and Accenture, announced a new proof-of-concept connected car program that will enable drivers to order and pay for pizza using car dashboard software. The partnership is part of a trial network to begin in Northern California in the spring which will combine Visa Checkout’s payments features, Accenture’s technical foundation to integrate the prototype’s many technologies, and Pizza Hut’s mobile app ordering capabilities. When asked what the significance of the deal was to connected-car-ordering, Concors said “We’ve gone from phones to watches to connected cars—it’s just another avenue as we enable people to order as seamlessly and frictionlessly as possible.”
GOVERNMENT
With most citizens accessing information through digital channels, it is essential for the public sector to develop effective marketing and technological strategies to reach the optimum level of public engagement for a better community.
- New York City/State of New York: As current Chief Digital Officer and Deputy Secretary of Technology for the State of New York, Rachel Haot is in charge of all of the ways in which technology touches the lives of New York’s citizens. Drawing inspiration from sites ranging from Google to Medium, Haot has performed a complete overhaul of NY.gov, and continues to add innovative technology-based solutions to aid the state. Under Mayor Bloomberg, Haot was also the first CDO of the City of New York, establishing the first Digital Roadmap in 2011 which laid out the ideals and goals for technology in the city’s government. With the help of public input, the Digital Roadmaps include plans to innovate access, education and industry, to name a few. In 2013 Bloomberg announced the 100% completion of the staggering 40 initiatives, of which spanned across the areas of internet connectivity, STEM education, open government, big data, online engagement and technology industry support.
DIGITAL DIRECTION
Constellation Research, a research firm with a focus in digital disruption, predicts that half of the Fortune 500 will appoint a CDO by 2016. Chief Digital Officers will embark to build digital platforms and ecosystems, changing the way business is done. These executives will often be coming into the role out of eCommerce and Digital Marketing functions, with subordinates in those fields as well as within mobile, technology, and data. Thus, no matter what digital expertise you subscribe to, the structure of your corporate ladder is going to shift. To professionally thrive in the digital age one must be able to take on challenges of a mobile-first world filled with new forms of competition, while still remaining people-first to provide purposeful convergence.
