What's a retail CMO to do?

An interesting article in AdAge(registration required) bemoans the fate of today's CMOs. (The latest CMO casualty, Macy's Anne McDonald is pictured).

The challenge is the same as it's been for the past several years - building a brand takes time, but shareholders want results now. An age-old conflict.

I am left wondering if this conflict can ever be resolved.

Here are a few potential outcomes - please feel free to weigh in with your opinion.

1. Retail giants like Macy's commit the life-threatening error of concluding that brands have stopped mattering (perhaps the driver behind McDonald's dismissal), and start making all marketing price/item promotion that drives short term sales gains (but doesn't impact long term brand preference). Retail is thus completely commoditized again, benefitting lower priced competitors like Target, but leaving Macy's and brethren without ground to own. (BTW, I can't wait for the Target to open in downtown Boston across the street from Macy's, that ought to be fun).

2. Retailers finally recognize that the CMO role is really just about driving sales - generating demand - and develop a rigorous way of identifying how much branding will help achieve this goal, thus putting the brand topic into its place once and for all (as a subset or enabler of demand generation). The brand role reports up into the CMO role, instead of being a conflicted part of the CMO role.

3. Retail marketers finally figure out how to sell in a branded way, by making marketing less about the message (in this case, the price/item message) and more about the experience. Giving the customer value beyond just a percentage off - for example, helping them make the right product selections, notifying them when something they want is on sale, instead of expecting customers to follow the daily newspaper ads. Making the marketing about action (we call this "verbs"), not messaging. Striking the right relationship with the customer (we call this "voice"), so the brand isn't an impersonal auctioneer of distressed goods, it's a trusted girlfriend passing along the secret of the quarter's best sale, or a generous in the know friend who wants you to get in on the savings.

Comments

[Kevin Hillstrom]

Having spent the past seventeen years in retail, the CMO role is fraught with peril.

Take your CFO. The CFO hands out money that has a positive ROI.

So, the CFO is given a choice. Invest in some marketing endeavor that cannot be proven to deliver an ROI, or invest $30,000,000 to build a new store in Los Angeles, a store that can deliver a profitable ROI within 10% accuracy.

The CFO has to make the choice between something that can't be proven, or something that can be proven. If s/he doesn't do this well, s/he loses his/her job.

So, the CFO has to hold the CMO accountable for performance.

The CMO needs to adapt and change to the reality of business in 2007.