Digital Marketing Redux   //   February 1, 2023

Retailers are expanding the CMO role to focus more on customer experience and retention

As retailers recalibrate their C-suites, they’re adjusting the CMO and other marketing-adjacent roles to bring more focus around customer experience.

Multi-brand retailer Ssense appointed Daniel Habashi to be its first chief customer officer in September, as the company aims to improve its omnichannel experience. Target, on the other, has appointed its chief marketer Cara Sylvester into a newly-created role called chief guest experience officer, which is in charge of further developing Target’s customer experience. For both companies, these new roles will stand in for the traditional CMO positions.

Retailers are facing a tough marketing environment ahead with marketers constantly adapting to newer platforms like TikTok and Pinterest, while also grappling with higher customer acquisition costs. And experts expect it to get even harder as inflation-weary shoppers pull back spending. As a result, retailers are increasingly redefining the top marketing role to target customer retention and customer experience.

“New customer acquisition always will be and always has been important, but as it gets more and more expensive it’s really about retaining those customers you already have,” said Calla Murphy, vp of digital strategy and integrated marketing at Belardi Wong. “We’re really seeing marketing teams look for people who are not just growth marketers, not just performance marketers or experts in acquisition but can really also help foster those customer relationships,” 

Target’s chief guest experience officer role also focuses on increasing personalization and attracting more shoppers to Target. Much like Target, Lowe’s also axed the chief marketing officer title entirely in September. Lowe’s promoted Jen Wilson, a long-time executive who previously focused on areas like customer marketing to the top marketing position of senior vp of enterprise brand and marketing. 

Murphy said that building a community around a brand has grown increasingly more important recently, hence the title updates retailers have been making. The ability to cultivate a community of shoppers, it seems, is what attracted Ssense to Habashi. Ssense Co-Founder and CEO Rami Atallah said in the initial announcement that its new chief customer officer has had “a stellar track record for building and nurturing engaged creative communities at a global scale.” 

A customer-focused role in a company can yield positive returns. While Petco kept the CMO position, it also developed a new chief customer officer role. Since Darren MacDonald assumed the CCO role in August, Petco has grown the membership of its paid loyalty program Vital Care by 42% quarter-over-quarter.

“The customers that we’re seeing, their lifetime value is three and a half times larger than an ordinary customer,” MacDonald previously told Modern Retail in December. “The customers are seeing the value. They’re purchasing more often with us with bigger baskets.”

Beauty retailer Ulta also maintained the CMO title. However, its new CMO Michelle Crossan-Matos told The Wall Street Journal that she wants to be completely hands-on with the customer experience side of the business. “I will be selling in-store, I’ll be working in-store, I’ll be working in our distribution center, I’ll be listening to customer service, so that I can really understand what the guest really needs and wants, because that is what marketing does,” she said.

Rebekah Kondrat, managing partner of retail agency Rekon Retail, said that the chief marketer role has indeed gotten more customer-centric. She said marketers are now more involved with physical retail channels as opposed to just digital channels. “CMOs have [evolved] from being siloed and almost not even aware of what the physical channel is doing,” she said.

However, hiring a person for the job is just the first step.

The chief marketing officer role is widely known to have one of the highest turnover rates in the C-suite, partly due to the fast-changing nature of the marketing industry. For example, Rafael Acevedo stepped down as CMO of Dunkin’ in March after just nine month and Alegra O’Hare left her CMO role at Gap back in 2020 after less than a year. CMOs held their posts for an average of 40 months in 2021, the lowest in over a decade, while CEOs have an average tenure of 85 months, according to consulting firm Spencer Stuart’s latest findings. 

Michael McDermott, professor of the practice in management at Georgetown University’s McDonough School of Business, said CMOs often shoulder a broad range of responsibilities that make the role much more difficult. 

“Many companies hire a chief marketing officer and have very unreal expectations about what they can do,” he said. “The expectations can’t be fulfilled so that leads to disappointment. And I think that’s why the tenure is so short.”