10 innovation takeaways with Target CIO Beth Jacob

Retail giant Target CIO Beth Jacob is working toward a day when multichannel commerce is just assumed and shopping becomes more social as technology blends into the consumer's daily life.

Jacob oversees the massive retailer's technology operations. Here's a look at 10 takeaways from a recent video interview I did with her at the CBS Broadcast Center in New York.

Working with Facebook. Target has developed a social savings program called Cartwheel. The effort was co-developed with Target and Facebook developers. Jacob said the program has 2 million guests who have saved $7 million so far. Jacob added:

We developed Cartwheel in partnership with Facebook, and so it was the Target team and the Facebook team working together to be able to bring together this first social savings program and it’s been just a great partnership. One of the things we worked really hard at is having a very lean, very fast team, and being much more iterative in terms of how we developed the new product.

Mobile commerce. Jacob said mobile "is a game changer" and will garner investment dollars from Target for the foreseeable future. Thirty percent of Target's digital traffic is mobile. The smartphone is largely informational today, but Jacob said she expects more buying will occur over time.

The importance of the supply chain. Jacob said that customer experience and supply chain go together and in some cases merge. "Supply chain and retail, go hand in hand even beyond that today. One of the things that we’re doing is working to even more fully integrate our entire network of supply chains and capabilities, from our import warehouses to the back of our store," said Jacob. She added that flexible fulfillment where a customer buys online and pays in store is an example of supply chain and customer experience merging.

Working with other C-level execs. Jacob said she works closely with leaders of Target's multichannel efforts, merchandizing team and CMO and CFO. "One of the changes we made is to really change technology from being a service provider, a great service provider, to also being a great strategic partner. I think it has really led to an involvement and an integration of our business and technology strategy in a very compelling way for Target," she said.

How data informs innovation. Jacob said that data influenced the design of Baby 360, a pilot in 10 Target stores in Chicago. Jacob said:

Data informed the way that we wanted to set up the store, so we changed the planogram and the way that we organized the product for our guests to shop. Then we brought to bear different data about expectant moms. They shared with us that they want to have an interaction with an advisor that can help them pick the right product. They want us to help them digitally connect when they are in the store, so we changed the technology that we have in the store for guests to be able to use to do their registries or to connect our to expert news sources like BabyCenter. Then we armed both our team members and our guest with some of the technology in the store.

Should technology be invisible in store? Jacob said:

I think that a few years ago, I would have probably said technology is almost invisible, and it could be almost invisible, and I just don’t think that’s true anymore today. I think that technology has to be really easy for the guest experience in retail though. I think it has to be visible, so the guest wants to be able to engage in shopping in whatever way they choose to shop, whether it’s in the store, whether it’s online, whether it’s on the go, and that technology shouldn’t be the focus, bringing the right product and the right value to it, should be the focus, but guests wanted the technology to be visible enough that they know they can use it as a part of their shopping experience.

Point of sale technology. Jacob said that point of sale technology leaves an impression---a bad one if the checkout doesn't go well. She said:

When you shop Target you can swipe your card before the transaction is complete. It’s a small, but important innovation that we patented a long time ago, that allows our check out experience to be really easy and really fast. Another place that we’ve innovated in point of sale is that we have our guests able to keep their coupons on their mobile phone. They might have several coupons and with a single barcode scan they’re able to capture the value of all of those coupons at point of sale.

Innovation advice. Jacob said CIOs have to set themselves up to be an influencer around innovation and build relationships with the business. Jacob added:

Make sure that you engage your organization broadly in innovation. We’ve worked hard to do that and it’s paid huge dividends for us. I mentioned earlier that innovation is everyone’s job, and it is, it’s everyone’s job and it’s everyone’s opportunity. One of the ways that we do that is to engage people in different ways of bringing innovation to bear. We have internal hack-a-thons that anybody can be a part of in addition to some external hack-a-thons. We have something called The Next Big Idea contest, and it’s a really fun contest. We’ve done it a couple of years in a row, and the last time there were over seven hundred ideas from our team members. We asked them to focus in areas like mobile. So, it was great to see them bring their ideas forward. They get excited about both recognition, there’s a small prize, but what’s most exciting is their idea gets funded.

The future shopping experience. Jacob said that multichannel commerce will just be assumed. Meanwhile, the lines between living and shopping will blur even more. Jacob also added that she sees social shopping among family and friends to become more important. "Describing something as multichannel will actually not be the way that we talk about it in just another year or two. I think it just is, in terms of people blending together all the different data, and information, and devices, and patterns that they have in their lives," said Jacob.

Measuring innovation success. Jacob said the most valuable metric for innovation goes beyond sales to guest loyalty and behavior. Specifically, Jacob looks at "brand love." She said:

A concept we talk about is Brand Love, and we talk about that a lot with Target. One of the experiences that I’ve had in working with Target over the last eleven plus years, is when I first meet someone they often respond with, “Oh, I love Target.” We love that response, and it’s about beautiful stores, and clean stores, and the friendly experience when you’re in the store, and great product at a great value, all of those feed back to guest loyalty. Which all of that does feed back to profitable sales. So when I look at the measures of success, I measure it on that. Then I’d also add I always measure it on a healthy pipeline of new ideas.

 You can watch the entire 11-minute video below: