Chico’s FAS expects to reduce its 2016 marketing expenses by $11 million and generate annualized savings of approximately $14 million with changes in the structure of its brands’ marketing departments, according to a recent quarterly report. The reduction in spending comes as the retailer’s President of Digital Commerce and Chief Marketing Officer (CMO), Miki Berardelli, has left the company to Chair the NRF CMO Council.
In conjunction with the budget slashes, the retailer will realign its marketing and digital commerce functions in an attempt to place decision makers directly in control of the retailer’s three brands: Chico’s, White House Black Market and Soma. Berardelli’s marketing and digital commerce responsibilities will be passed to the individual presidents of each brand.
“Disbanding these previously centralized functions will result in a leaner, more simplified structure that better supports the individual brand needs and places the functions closer to the customers, while at the same time, reducing costs and complexity within the company,” said Shelley Broader, President and CEO of Chico’s FAS in a statement. “By directly aligning these resources within the brands, we will enable better execution on our customer experience initiative, enhance profitability and increase shareholder value.”
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Why The ‘M’ In ‘CMO’ Now Means More Than Marketing
The CMO shift at Chico’s follows a recent trend of marketing exec departures from Neiman Marcus, Macy’s, Kohl’s and Old Navy, suggesting there have been disappointing gaps between various marketing campaigns’ goals and their actual results.
The changing of the guard within retail marketing departments also signifies that the role of marketing itself is shifting, with an urgent need to place more focus on the digital and customer side of retailing. A report from Deloitte highlighted that as retailers question traditional executive roles, they need to move forward with new “CXO” positions that will enable them to differentiate from competitors.
These potential new C-level positions include:
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A Chief Digital Officer;
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A Chief Customer Officer; and
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A Chief Omnichannel Officer.
While organizations such as Chico’s made the decision to get leaner in their marketing spending, it doesn’t necessarily mean retailers are required to take this path to succeed. If anything, the expense reduction just shows that retailers have to allocate their resources more wisely.
Chico’s more customer-centric focus may be a step in the right direction for the retailer, especially as expectations throughout the industry continue to rise with the advent of digital and personalized capabilities. The new roles many modern marketing execs now have to fulfill require close proximity with the individual brand, its advocates and its consumer base. With that in mind, retailers can no longer afford to employ marketing executives who remain distanced from the rapidly changing back-and-forth between the brand and the consumer.
