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Retail CIOs Need to Step Up Their Game

For generations, differentiation in the retail industry was based on two things: price and location.

[ Feature Story: Omnichannel Retail Brings Together Online and Offline Shopping ]

Technology has changed all that, says retail IT consultant Cathy Hotka. "What it means to be a retailer has fundamentally changed. It's now about the [customer] experience and the promise of the brand," she says.

Techno-futurist Daniel Burrus says retailers will have to be more thoughtful than they have in the past about how they distinguish themselves from each other.

"There are many ways to compete. Many think it's on price, but Apple does well and it has never had the lowest price," he says. "You can compete on price, reputation, image, service, quality, design, time and speed, values, experience, innovation, and knowledge." (For more, see " The Future of Shopping: Click and Mortar.")

Technology will be crucial to each of those differentiators, Burrus says. "Today's CIO is an essential part of strategy creation because there are things that we can do now that we couldn't do even a year ago," he says.

But if the CIO wants to be involved in coming up with breakthrough strategies, he or she will have to break through some mental and organizational barriers, Burrus warns.

Retail CIOs who want to successfully develop and deploy the right IT infrastructure must work with other executives to address all possible points that can be used to differentiate the company from other retailers. Burrus says that kind of strategic planning requires more than just cooperation at the C-level: It needs a new level of collaboration.

"Cooperating is when you protect your piece of the pie; collaborating is when you work together to grow the pie, and omnichannel is about making a bigger pie for all. It's not about focusing on the website or social media. It's about focusing on the customer," he says. "This all involves data management and lots of integration. It means talking to leaders of all channels so you can work together to create a seamless experience for the customer."

Despite the crucial role technology plays in retail today, Kasey Lobaugh, a principal at Deloitte Consulting, says some retailers aren't treating the CIO as a strategic partner.

"Technology can drive the shopping experience. That's new in retail," he says. "But across my clients, I see some [IT departments] who have a seat at table and some who are still treated as a cost center instead of a strategic investment."

Those retailers are in for trouble, Burrus says. "The pressure to have a truly omnichannel, customer-centric experience is there, and it's becoming more glaring if you don't do it. If it can be done, it will be done, and if you don't do it, someone else will."

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Read more about retail in CIO's Retail Drilldown.

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