Target hits the retail bullseye by hiring Tesco CIO to lead omni-channel push

Profile picture for user slauchlan By Stuart Lauchlan February 3, 2015
Summary:
US retail giant Target has poached Tesco's digital transformation lead in a move that bodes well for its own omni-channel ambitions.

Target
Bullseye!

UK supermarket chain Tesco has seen a dramatic fall from grace in recent years and recently kicked off a major restructuring to save £250 million in costs, including closing stores and removing a number of senior directors.

One departure was perhaps less planned as CIO Mike McNamara announces a surprise move to US retail giant Target after 15 years in situ.

At Tesco, McNamara was responsible for all technology across the group, including strategic direction and management of the retailer's website and mobile platforms, in-store technology such as till systems, and behind the scenes operations. He was also responsible for IT and systems at Tesco Banks.

In his new role at Target, McNamara will take over from Bob DeRodes and spearhead the chain’s digital and omni-channel programs, reporting directly to Target chairman and CEO Brian Cornell.

DeRodes has only been with Target since last spring and was hired on the basis of his data security and technology infrastructure expertise following Target’s disastrous data breach in late 2013 which compromised personal information affecting up to 70 million people. DeRodes, a 40 year tech industry veteran, will act as an advisor in the short term before retiring.

Mike McNamara
Mike McNamara

Cornell explains the moves thus:

Bob joined Target during a very challenging but important moment for the company. I’m grateful for the progress that Bob and his team have made, and for the foundational IT work that’s been done to set Target up for future success.

Technology is critical for Target’s future success. So finding the right leader for this role was one of my absolute top priorities. Mike has been a driving force for technology innovation throughout his career. He’s got a stellar track record, and I’m excited to see how he’ll help our team continue to push new innovations that enhance the shopping experience for Target guests, both online and in store.

For his part, McNamara says:

Tesco is a world class brand and I’m grateful for the time I spent there. Looking ahead, I’m thrilled to join Target at a time when Brian and the leadership team are intensifying their investment in technology and prioritizing its role in Target’s future success.

I have long admired Target as a retailer and its legacy of putting customers first. To be part of an organization like Target and help shape the future of its technology and omnichannel strategy was a dream opportunity for me.

Retail commentator IGD Retail Analysis approves of the appointment at Target:

Advancing Target’s digital transformation was identified as a priority by CEO Brian Cornell following his appointment last year. The retailer will continue to increase its investment in technology and the supply chain to enable it to better leverage its existing assets for more flexible fulfilment options. It is currently in the process of re-thinking its stores to better integrate them with its digital capabilities.

Target also continues to make significant advancements with mobile-based shopping, recently enhancing its apps, including integrating Cartwheel which enables customers to choose their own offers. The recent acquisition of Powered Analytics will also enable it to deliver a more personalised experience through mobile technology, location data and predictive analytics going forward.

Tesco
This isn't going to help a little

As for Tesco, there are suggestions that McNamara’s CIO role will not be directly filled, but that a Chief Technology Officer will be appointed instead. Tesco chief executive Dave Lewis confirmed:

Mike McNamara has decided to leave Tesco to take up an external appointment. Mike has been a tremendous asset to our business and we are sad to see him go. Given this change we take the opportunity to build on Mike’s legacy by taking the next step in technology and recruit a chief technology officer.

My take

Whatever Tesco’s problems have been, they haven’t even around its IT. You can look to other supermarket chains - yes, Morrisons, that’s you we’re talking about! - to see how vulnerable a lack of digital investment can leave a business in a febrile competitive sector.

Back in 2013, I took a look at McNamara’s work at Tesco in an article in which he declared:

As a retailer we know that if we don’t embrace the digital culture we’re finished. It is as stark and as simple as that. Change or die!

Increasing numbers of our customers are riding the digital wave and being a wave it is by its nature uneven.

But its course is unstoppable. If you want to win, you need to be riding that digital wave. If you let it crush over you, it will wipe you out.

That’s the kind of mindset that Target needs right now. It’s a win for the US firm and another blow to the struggling UK one.