Connected At The Hip
Saks Fifth Avenue has set the bar high in the quest to merge the expertise of retail CMOs and CIOs. Convinced that it’s the only way to be more competitive, market to the omni-channel consumer and create systems of engagement that drive loyalty, Saks’ CMO and CIO are connected at the hip — and both say it suits them just fine.
“We’re very focused on transforming our marketing capabilities to be significantly more analytical, performance-based and ROI-focused,” says Denise Incandela, EVP and CMO of Saks Incorporated. “As a result, we need the IT systems in place to enable that.
“In order to support that and execute what we’re trying to accomplish, my relationship with Mike [Rodgers, Saks’ EVP and CIO] is critical. He is one of my key partners in the organization and always has been.”
“We’re here to support the business,” says Rodgers. “We run our IT organization as a service organization. Denise and her team tell us what requirements they have and how they’re planning to drive the business forward strategically.”
Incandela and Rodgers are quick to point out that the marketing space has become more analytical over the last two years, powered by technology. Rodgers says that it’s been about two years since Saks began the quest to achieve a single view of the customer database — requiring collaboration across the business to be sure one database could truly support the entire company.
At the root of the CMO-CIO partnership is Saks’ CEO Steve Sadove’s commitment to running a highly collaborative, teamwork-driven organization. Sadove sets a tone inside the C-suite that encourages constant communication, a nimble approach to business change and cooperation across every discipline.
“Almost every marketing initiative that we launch and execute has some kind of technology aspect, which makes collaboration imperative,” Incandela says. “Our marketing initiatives, including our loyalty program, are very database- and system-dependent. They rely closely on our single view of the customer.”
In-store, Incandela and Rodgers team up on projects related to enhancing the POS and clienteling systems, as well as elevating the shopping experience using devices including iPads, video screens and mobile POS.
Most conversations focus on evolving technology to meet business needs and addressing shifts in the way customers want to interact, Rodgers says, citing the loyalty program as a prime example. “A few years back the loyalty program would capture shoppers’ snail mail and e-mail addresses,” he says. “Today, we’re increasingly finding that customers don’t want to give their physical address — just their e-mail.”
The buzz in tech circles is that marketing solutions are commanding an ever-increasing share of IT budgets. For Saks, that had been the case until recently. Rodgers notes that the data warehouse which enables the retailer to achieve a single view of customers was a multi-year project: Now that it’s up and running, there are “ongoing costs, but it doesn’t eat up the portion of IT spend it did.”
Still, he points out that as the industry transforms from a multi-channel, siloed approach to a business that serves an omni-channel shopper, clear delineations between which tech solutions support which businesses are less apparent. “If you think about how we market today vs. just a short time ago, a lot has changed,” Rodgers says. “It’s not just about marketing to drive shoppers to the stores, it’s about marketing to Saks’ customers, regardless of where the transaction takes place.”
Incandela agrees. “We use the metrics so often now. It’s just part of the way we operate,” she says. “With every campaign we do, we’re digging into the analytics to try to understand who best to target ... on the performance measurement side, we dig into the analytics as well. What worked? What could be reworked for a better outcome? It’s a daily part of how we interact now.”
Rodgers is quick to concede that building the database and getting to the point of collaboration took a lot of hard work, but he is gratified by the result. “Once we got it done, the insights we’ve been able to glean from the data knocked everybody’s socks off.”
Linking To Sales Lifts
While the tendency in the past was to think of the marketing team as having a “right brain” orientation, Incandela says Saks’ team has a core analytics competency. “We have very analytical people who run algorithms,” she says. “Some are statisticians.”
It’s a shift that has not been lost on Rodgers. The marketing team, he says, has the technical expertise to “understand the data and they can articulate and define business requirements. That makes it easier for IT to build data reports that provide value.”
While it’s nearly impossible to draw a straight line from Saks’ CIO/CMO collaboration to the luxury retailer’s bottom-line performance, there is a sense that the single-view customer database and the leverage it provides in the quest to move closer to one-to-one marketing are contributing to recent sales lifts. Comparable-store sales increased 4.7 percent in both the second quarter and first half of this year — on top of 15.5 percent and 12.7 percent increases in the second quarter and first six months of last year, respectively. Several merchandise categories showed sales strength during the second quarter, including women’s and men’s contemporary apparel, women’s and men’s shoes, fashion and fine jewelry and cosmetics and fragrances.
Bottom line, according to Incandela: “Our ability to collaborate as a team is enabling us to transform our marketing capability, which should enable us to capture increased sales. That’s really what we’re focused on.”