Do Brands Need Chief Digital Officers?

When a company decides to eliminate a role, it’s hard to imagine the affected employee would be on the same page, but that’s what happened with Tapestry and its first-ever chief digital officer, Noam Paransky.

Tapestry hired Paransky in 2019 to establish a unified digital platform across its brands — Coach, Kate Spade and Stuart Weitzman — and grow its digital business. By 2022, Paransky and the company felt they had achieved those goals. Tapestry had built a shared customer-engagement platform encompassing all its marketing and commerce systems, from customer data and order management to marketing execution and measurement, and with help from the pandemic surge in online shopping, had significantly increased e-commerce sales. Paransky and the company started to wonder if the chief digital officer role was still necessary.

“We wanted to figure out, ‘Ok, should we still have this role?” Paransky said. “I always thought that, theoretically, the idea of the CDO was somewhat of a temporary concept. If a company became digitally mature, why would it need a chief digital officer?”

They decided it didn’t — at least not with the same brief and title. In August 2022, Paransky was named the company’s chief “omni and innovation” officer, a position in which he could focus on how Tapestry’s brands would serve customers across their shopping journey, whether online or in stores.

The role of the chief digital officer is changing beyond Tapestry. From around 2016 to 2019, a wave of businesses from Nike to LVMH hired CDOs as they sought to support their digital transformations by centralising responsibilities under one figure. The urgency multiplied with the pandemic as most customer interactions moved online. Today, the majority of large fashion players have a chief digital officer, whereas only about half did in 2017, according to Elizabeth Stanton, a consultant and head of the digital division of Sterling International, an executive search firm specialising in fashion and luxury.

But with every part of an organisation now having some digital element, many fashion companies are working to ensure “digital” isn’t a separate function siloed away from the rest of the business and are parcelling out duties once held by the CDO into other departments. Online selling, for instance, might now be under the watch of the commercial team handling all other forms of sales. All of this is leading to a rethink — and sometimes retitling — of the job.

Jason Gowans, who became Levi’s first CDO earlier this year, agreed his new title doesn’t mean what it might have just a few years ago.

“The first wave was very much tilted towards, ‘Help us become DTC. Help us build a basic digital capability,’” he said. “If you fast forward to where we are today, the role is a lot more evolved.”

Some of the experts BoF spoke to said the once-hot title is likely to decline in the years to come as the role evolves into something new. Kelly Pedersen, retail lead at PwC, predicted there would be fewer CDOs in 10 years. Stanton said she believes there’s a possibility the title could vanish entirely.

What Today’s Digital Chiefs Do

There’s no single definition of what a CDO does. In its earliest iteration, the role often entailed managing a company’s digital presence and making sure everything from a website and mobile app to internal customer databases and online payments were functioning and optimised. It could include a broad range of other functions, too, such as overseeing social media and search-engine optimisation.

But while a CDO may still handle the back-end technology, some of those other tasks have shifted out of their hands as businesses adjusted to the growth of their digital channels. Merchandising of the website might be the job of a dedicated e-merchandising director now, whereas that position barely existed five years ago because e-commerce was still such a small share of sales, Stanton said. Social media may have moved to the control of the marketing team. If needed, of course, the CDO might still provide tech support, like over the past few years as brands evaluated NFTs as a new marketing and loyalty tool.

“The functions are now split in different departments because [the job] got so huge,” Stanton said.

In Gowans’ view, the CDO’s purpose has shifted from generating demand on the e-commerce side to generating profitable growth. At Levi’s, he has two main objectives: First is to help the company multiply its e-commerce revenue as it transitions from being a wholesale-dominant business to being DTC-led. It aims to increase sales in its own channels from more than 40 percent currently to 55 percent in the future, a change that requires reinventing processes such as assortment planning, allocating inventory, pricing and promotions with the help of data and technology, Gowans said.

His other mandate is supporting Levi’s digital transformation in other realms of the business, including product planning, design and inventory forecasting. Again, it’s about incorporating data and digitising processes to help the company move faster.

But the CDO position is also less purely digital than it used to be.

“There’s a lot more fluidity between in-store and online interactions, so what we’re finding is that the evolution of that role is almost becoming like an omnichannel role rather than just a digital role,” Pedersen said.

The objective of Paransky’s new role at Tapestry is to facilitate the end-to-end customer journey, which could start with TikTok or Instagram but end in a store and an interaction with a sales associate. He’s also charged with thinking about how they can centre innovation across the company. One technology they’re exploring for multiple purposes from design to customer service is generative artificial intelligence. The title change last year sought to formalise the idea that “digital” is a critical touchpoint and sales channel but not a business unto itself, according to Paransky.

Ian Rogers, whom LVMH hired in 2015 as its first chief digital officer, was not a fan of the CDO title either, telling Wired in a 2018 interview that “‘digital’ is a bit of a nonsense word.” It was a vague way of indicating that customer behaviour was changing and companies needed to prioritise technology. When he departed in 2020, the luxury colossus didn’t backfill the position but devised a new role, chief omnichannel officer, while the group’s IT director absorbed some of Rogers’ duties.

The Skills to Succeed

The job seems likely to keep evolving in this direction, narrowing in scope in some ways while expanding in others as the barriers between online and offline dissolve. Ultimately, the name “chief digital officer” could prove too confining, or just not sufficiently descriptive of the job.

But while the specific title and duties of the CDO may change, the need for someone with their skills and expertise isn’t about to disappear.

“There are not enough people in our industry today — and as I see it, even going forward — who know enough about technology, how to deploy that technology and are thinking in that way for the role to go away,” said Karen Harvey, founder and chief executive of Karen Harvey Consulting Group, an advisory and executive search firm.

According to experts BoF spoke to, successful CDOs don’t just know their company’s current technology inside and out. They need to be leaders and strategic thinkers who possess a strong business acumen, understand consumer behaviour and how it’s changing, see the value and viability of emerging technologies and have the communication skills needed to translate their visions to a less tech-savvy board.

“I have no doubt that there is a very big need for this person,” Harvey added.

With technology racing ahead and shaping operations from the supply chain to customer service and sales, the job in some form remains vital as ever, whatever it’s called.