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Ecommerce structures: The rise of the CCO

As the role of chief customer officer begins to emerge, Drapers asks what this means for today’s ecommerce directors.

Ecommerce structures

Ecommerce structures

The future of ecommerce structures?

Do you know what a CCO is? No? Well, you are about to find out. Welcome to the rise of the chief customer officer in fashion retail.

Take House of Fraser executive director of multichannel Andy Harding, who opted for a name change to chief customer officer in March. In his new guise, Harding is responsible for international customer strategy, multichannel sales and profit, online and offline marketing and the overall development of the multichannel customer proposition. He joins the likes of Robin Terrell at Tesco, who took on the CCO role in January.

According to Orlando Martins, chief executive of headhunter Oresa Executive Search, the CCO is becoming essential in a highly competitive market to help retailers offer a customer proposition and holistic experience across both online and physical stores, addressing changing consumer needs.

“The role of CCO is not necessarily a replacement for the title of ecommerce director, but the route to joining up a group of related but as yet often disconnected pieces of the jigsaw – not least brand, marketing, data insight and loyalty, customer services, ecommerce and potentially trading, including retail ops. Taking it to the furthest extreme, it could include logistics,” he explains.

A movement towards the CCO role has been noted by Jonathan Hall, founder of ecommerce recruitment specialist Cranberry Panda: “It has been discussed, but I’ve not seen the title change that often as yet, although that is where the responsibility is heading.

“Currently, the role of ecommerce director has been shifting into a more multichannel role, as part of the role of multichannel director is looking at the data and understanding the customer at every touch point, across each channel, in order to create a personalised experience.”

The emergence of the CCO role coincides with the rise of big data and the overall drive for personalisation, recognising the need for a senior role co-ordinating data insights across the whole business, not just the website.

Verdict senior analyst Kate Ormrod agrees that as retailers how become more focused on multichannel, the role of ecommerce director has begun to shift into a multichannel position. “Multichannel is such a buzzword, but now the focus is changing to get closer to the customer. People in online roles are getting more exposure in the media as well, although it’s debatable whether a name change to chief customer officer really makes a difference to consumers.”

Karen Millen digital director Charlotte Ellis believes the role of CCO, with its focus on thinking holistically about the customer journey, is a step forward: “Our aim is to create a customer-centric culture, so I definitely believe in the term chief customer officer. Omnichannel has been a buzzword for a while, but we have already delivered against it. I think now the CCO is all about putting the customer at the centre of business, no matter where she shops.”

Mark Crutchley

Mark Crutchley

Schuh’s finance and ecommerce director Mark Crutchley

While the CCO role is on the agenda at some fashion retail businesses, the prospect does not sit well with every company.

“I feel uneasy about the current fashion for chief customer officers – to what extent is this different from the role of the CEO?” asks footwear retailer Schuh’s finance and ecommerce director Mark Crutchley. “That said, we remain much better as an industry at analysing our sales by product type and location than we are by customer. It may be that a change in title can be used to galvanise a business to focus on truly knowing their customers.

“The ecommerce director has an obligation to understand the changing nature of their marketplace. Changing a job title doesn’t make them do this and is irrelevant in this respect.”

Dune ecommerce director Kate Smyth shares similar concerns. “I’m not sure how chief customer officer differs from CEO. As I’ve been in online for nearly 20 years, I’m very attached to the ecommerce part of the title.

“That being said, the ecommerce director role has changed. You only have to look at the roles both Andy Harding at House of Fraser and Mark Lewis [online director] at John Lewis have evolved into, but it depends very much on the individual and how their company is evolving.”

The role of CCO is arguably more relevant to a multichannel business than a pure-play, as etailers have long had teams in place responsible for monitoring customer insights. For Shop Direct ecommerce director Jonathan Wall, while his role is continually evolving, especially towards a greater focus on personalisation, he would not consider a change in title to CCO.

“We already have customer management functions within the business, like our insight and customer teams that have separate responsibilities, and while the customer is at the heart of everything we do, a role like CCO wouldn’t necessarily be right for us.”

As a pure-play, the role of ecommerce director is naturally becoming ever more integral to the business at Shop Direct, which employs 70 people in its ecommerce team, with 15 responsible for digital marketing, 25 in user experience and 30 in site management and development.

Ellis has structured her team to follow the customer journey, instead of opting for a flat structure, dividing people by channel or market. The growing digital team, which currently stands at 20 to 25, comprises acquisition, product, content, omnichannel and retention. “The key is to focus on the end-to-end customer journey and create a more agile culture. Within our digital team the omnichannel function links with the retail teams as we want to match the online and offline experience.”

Kate Smyth dune

Kate Smyth

Dune ecommerce director, Kate Smyth

The structure of Schuh’s 35-strong ecommerce team is constantly evolving, explains Crutchley. “We currently split our team between digital development, digital marketing, merchandising, web editorial and customer retention. This will undoubtedly change in the future as the ecommerce world changes and the key is to be flexible.

“Five years ago, we didn’t envisage having no cash desks in our stores; one year ago, we were convinced that tablet usage and sales would continue to grow. The point is that, whatever we predict about five years out, the only certainty is that we’ll be wrong.”

Growth of the ecommerce team at Dune is allowing Smyth to create more specialist roles: “Our structure spans acquisition, conversion and retention across all devices and regions. As we grow further, we’re considering a specialist resource for the international sites and logistics.”

The main ecommerce department at Dune is also becoming less siloed and collaborating more closely with the retail, IT and distribution teams. “Ecommerce produces huge amounts of data, meaning greater customer insight. With the marketing teams looking to move budget out of print and into digital, there is a shift in how the ecommerce, PR and marketing teams are working together.

“Finally, the move into international ecommerce and the growth of cross-border trade has led to much more collaborative working with our franchise and wholesale teams. We are looking at ways we can work in the ecommerce space with our international partners.”

As the importance of ecommerce directors grows across retail businesses, the boardroom naturally beckons. But what is the likelihood they can go all the way to the top? Hall believes there is a desire amongst ecommerce directors with 10-plus years’ experience for more involvement on the board and perhaps ascending to CEO.

High-profile individuals making the leap to C-level include Hash Ladha, who has transitioned from Aurora Fashions group multichannel director to chief operating officer of Oasis and Warehouse, and former Net-a-Porter head of technologies David Lindsay, who is currently managing director of Farfetch Black & White, an agency offering multichannel ecommerce solutions to luxury fashion brands.

Laura Wade-Gery took a slightly different route, moving from chief executive of Tesco.com to executive director of multichannel at Marks & Spencer. Former Debenhams head of direct David Worby transitioned from chief executive of my-wardrobe.com to interim customer director at Jacques Vert Group, a position he assumed in May. Then there’s Neil Sansom, former Moss Bros omnichannel director, who went from chief executive at ecommerce consultancy Grantham to join knitwear retailer Wool Overs as CEO in September.

Wall believes there are exciting times ahead for digital talent entering the boardroom. “Look at Jonathon Brown, chief executive of M and M Direct [former John Lewis online director] and Robin Terrell, chief customer officer at Tesco [former group multichannel director] who have both recently taken on CEO and interim MD roles.

Charlotte Ellis

Charlotte Ellis

Charlotte Ellis, digital director, Karen Millen

“Businesses who are looking to incorporate a specific digital focus should have key individuals within the executive team that have digital experience. There is definitely a swing within the industry and a trend emerging for individuals from an ecommerce background being appointed to such roles.”

Having a digital presence on the board is crucial, says Ellis. “I definitely think digital people will become the chief executives of the future. Just look at early adopters like Angela Ahrendts when she was chief executive at Burberry. There is a big pool of talent out there and those people are already in high demand.”

For Crutchley, ascension to chief executive level is ultimately dependent on the qualities of the individual. “They have to have the ability and ambition. I think people from a purely ecommerce background need to gain experience in the world of physical retail to give themselves an all-round perspective.”

Arguably, this is where the CCO role comes in, giving these individuals the chance to gain the experience they need to progress to CEO by taking a holistic view across the whole business. Smyth acknowledges that while ecommerce directors often boast the broadest spectrum of skills, across marketing to analytics to logistics, there is still a way to go.

“An ecommerce director can have a very broad range of responsibilities, but ecommerce does need to mature. There is a surprising lack of awareness of profit and how to manage it, and too many fads and a desire to embrace the latest thing. We’ve had it easy over the last 10 years with huge year-on-year growth, so we need to make sure that we can stay profitable if the going gets tougher.”

Martins, however, believes that while ecommerce directors may become the chief executives of the future, the individuals most likely to progress down this route are the chief customer officers. “Approximately 90% of people surveyed for our forthcoming Decoding the Chief Customer Officer report said that the importance of the role will increase in the next five years. The CCO is an emerging role and one which the industry cannot ignore.”

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Chief people officer

As seen at Burberry with Leanne Wood, who in October was appointed chief people and corporate affairs officer, individuals in this leading human resources role are responsible for company culture, as well as the general workforce. Reporting directly to the chief executive, the CPO role is intended to take a more strategic perspective across all HR functions.

Product or category manager

As the role of the multichannel merchandiser begins to grow and cross into different functions within businesses from ecommerce to marketing and design, there are calls to revise the name and opt for a wider ranging title.

 

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