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Target Corp. gives a peek into some of the goings-on in its technology organization in a chat with its chief information officer, Mike McNamara.
Looking ahead, Target aims to keep blending more digital elements into the retail mix, as well as behind the scenes, according to McNamara, who joined the company in June 2015 from Tesco, where he was CIO.
Target’s Mike McNamara
“We’ll continue to focus on technologies that enhance the store experience for guests and our store team members. We’ll focus on digital efforts including Target.com, offline/online experiences such as order pickup as well as digital marketing to guests,” McNamara said in a Q&A on Target’s website.
“We’ll also continue to focus on supply chain efforts such as store replenishment and merchandising systems that help keep our stores well-stocked and that get the right products to the right guests at the right time.”
With brick-and-mortar retailers like Target and rival Walmart going up against the e-commerce and logistics muscle of Amazon as they build out their omnichannel capabilities, robust technology solutions and infrastructure are needed in more than just the customer-facing areas, he noted.
“There’s no question that technology and supply chain are the new battlegrounds for retail. The retailers with the strongest technology and supply chain will have the best chance of winning,” McNamara said.
Discussing Target’s IT organization, McNamara said the retailer has whittled down its pipeline of tech projects and zeroed in on strategic priorities.
“We’re seeing far greater stability and performance of our key retail systems — things that power our stores’ cash registers, Target.com and the handheld devices that store team members use,” he said. “And we’ve also reduced our reliance on contractors and saved hundreds of millions of dollars that Target’s been able to invest in other areas of the business.”
The outsourcing situation, in fact, has reversed at Target.
“Like many other large companies, we had outsourced a lot of that work. Too much, I thought. About 70% of our engineering staff was third-party contractors versus 30% Target team members. We had far more contractors than we needed,” he explained. “In just a year’s time, we’ve completely flipped that ratio so that now about 70% of our engineering staff is team members while 30% is made up of contractors. And going forward, I’d like to see that ratio get up to 80:20. I firmly believe that, to win in retail today and into the future, you’ve got to own and build your own technology.”
To that end, cultivating a strong base of technology talent is critical, McNamara stressed.
“Recruiting tech talent is ultra-competitive, as any CIO will tell you. That’s why landing great talent and creating an environment where they can thrive has been a major bright spot for me in my first year with Target,” he said, noting that he’s “been absolutely blown away by the brainpower we’ve brought in.”
“They all see in Target the opportunity to solve big problems that result in real changes for the business and, most importantly, impact millions of guests’ daily lives,” he added.
