What Happens to Retail’s Chief Experience Officers Now?
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In recent years, amid a massive shift to online shopping, many retail companies began hiring for a new kind of C-suite member: the chief experience officer. But as the coronavirus pandemic keeps shoppers indoors, the future of that role has come into question.
Over the past decade, many traditional brick-and-mortar players were floundering to find their way, leading some like Payless ShoeSource, Sports Authority and Henri Bendel to file for bankruptcy protection. To restore relevancy to their brands and lure in new customers, several forward-thinking firms sought out CXOs — executives who, according to the Harvard Business Review, would be able to deliver “tech-enabled, seamless and intuitive” physical experiences for customers that cannot be replicated online.
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The CXO — whose annual take-home pay, reports Salary.com, ranges from $171,000 to $272,000 — was a big investment for retailers. To help revamp brands, these executives were tasked with overseeing the execution of popups where customers could test out products, scouting high-profile guests for events and envisioning high-tech activations in stores, among other experiences. Some of the companies that had bet on CXOs included Macy’s, which two years ago acquired New York City-based concept shop Story and named its founder Rachel Shechtman as its brand experience officer. Or J.Crew, which hired last February longtime Starbucks executive Adam Brotman, who was widely credited with revamping the coffee giant’s digital businesses, including the launch of its mobile ordering system and loyalty program.
But today, as the COVID-19 health crisis continues to plague the U.S., the heralded CXO role faces a new challenge: The outbreak has thrown a wrench into brick and mortar’s ambitious plans to use stores as spaces for social gathering. In the era of physical distancing, customers are increasingly turning to e-commerce channels — the reason traditional retailers were forced to rethink their in-store strategies in the first place — and visiting stores for mostly non-discretionary (see: essential) purchases.
The sudden and accelerated de-prioritizing of stores has naturally called into question the role of the leaders who were meant to help solidify brick-and-mortar’s place as a key component of retail strategy. According to Melissa Gonzalez, CEO of experiential retail firm The Lion’esque Group, the CXO post is still very much relevant in the age of coronavirus — but it does require a transformation. In the current climate, she noted, at the top of the list of CXO objectives should be an emphasis on the health and safety of employees as well as customers.
“‘Experiential’ has a lot of definitions. It can be the service you provide, little touch-points across a store, signage on the floors and the windows, the little message in a bag when you open a package — those a-ha moments that can make big impressions,” Gonzalez explained. “Today, safety’s definitely got to be the guiding light, and there’s a way you can communicate that safety that feels on-brand.”
With their roles heavily focused on the omnichannel experience, CXOs are expected to look for ways to maintain brand relevance at a time when customers are tightening their purse strings. A recent Coresight Research report suggested that only one in five consumers anticipate buying apparel in the first month post-lockdown, while a third of respondents who changed their purchasing behavior during the pandemic expect it to take six months or more before their spending habits return to normal.
As a solution, because some shoppers are still unable to visit stores due to safety concerns, CXOs can perhaps help their companies take the brick-and-mortar experience to them by envisioning in-store activities that can be live-streamed to online customers, for instance. On the other hand, when social distancing restrictions ultimately do get lifted, it’s likely that pent-up demand could lead crowds back to shopping centers.
At the same time, effective CXOs also understand the power of digital and that experiential is not limited to brick and mortar. In fact, omnichannel commerce has given CXOs multiple platforms through which they can showcase their experiential chops: Social media can be used to curate customer-generated content or encourage peer-to-peer recommendations, for example, while mobile apps could come with special features, such as the ability for shoppers to schedule one-on-one appointments. All of these strategies, experts say, come from the guidance of a capable CXO.
What’s more, as the pandemic has accelerates the shift to digitization, it has created an environment in which augmented reality and other innovations that support customer personalization and engagement can thrive. These technologies can give customers the option to try items before they buy or the ability to view products through virtual showrooms, among other experiences.
According to Julie Larson-Green, who serves as the CXO at experience management firm Qualtrics, the experience chief must focus on three Ps: product, programs and people. When it comes to the latter, good employee experience can lead to a good customer experience, and a good customer experience can make a person five times more likely to recommend a company, according to the Tempkin Group (which is owned by Qualtrics).
“[It’s about] being that ‘experience’ person for the company,” Larson-Green said in an interview on the GeekWire podcast. “[It’s] understanding how the things you’re putting out there are creating experiences for your employees in your products, with your customers and ultimately how your brand shows up.”
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