Target has turned around its digital operations by streamlining the company’s e-commerce infrastructure, said Mike McNamara, the company’s evp/chief information and digital officer, at the National Retail Federation’s Big Show in New York, saving hundreds of millions of dollars while increasing effectiveness.
McNamara told a seminar audience at the show that, when he joined the company from British retailer Tesco 18 months ago, Target was running over 800 technology products and had a huge staff mostly composed of the wrong people. McNamara said he worked with executives to set priorities, develop a more pragmatic approach to budget and recalibrate the workforce, making it smaller and more centered on the retailer’s own software engineers. In that way, Target brought its digital development in house, which allowed it to focus on company priorities in an agile manner.
Today, rather than conducting innumerable meetings designed to achieve an encompassing consensus on a fixed plan, Target organizes digital projects based on its identified corporate priorities and associated goals, then lets its engineers find a way to reach the objectives, said McNamara. The solution doesn’t have to be perfect, he added. Instead, Target has been building its digital operation to quickly address the practical considerations related to satisfying those priorities and fine tune its processes as they come online in an evolving process. As such, he said Target has gone from being “a laggard to a leader” in retail digital operations.
As for the effectiveness of its new approach, McNamara said Target once again had a moment of crisis in the holiday season as online demand challenged the capacity of its digital technology to satisfy the inrush of orders. However, instead of having to “throttle back” its interaction with online shoppers, as happened in 2015, or suffering a crash that crippled its e-commerce operations, as happened in years earlier, Target was able to shift servers in 45 minutes rather than in the weeks-long timeframe such a move might once have taken the company, and, in so doing, kept attending to online customers.
