Kohl's CIO lawsuit shows the power of IT in the enterprise

Never has the role of CIO been more important to retailers. This is evidenced by the recent tussle between Kohl's and its former CIO Janet Schalk.

Schalk announced she was leaving Kohl's to join Hudson's Bay and was promptly served a temporary restraining order to enforce a non-compete clause in her contract that barred her from working in a similar position with a retailer for a period of one year.

A judge denied Kohl's request last week, but gave Kohl's a chance to appeal.

While a non-compete clause is standard for retail executives, the importance that Kohl's has placed on Schalk's role within the organization serves to highlight the critical importance that IT now plays in retail.

"Armed with the knowledge gained during her employment at Kohl's, Schalk poses a competitive threat far more dangerous to Kohl's than other competitors who are not privy to the very private information to which Schalk was provided access," stated the company in a legal brief.

Under Schalk, Kohl's completed a series of business changes designed to support more targeted planning, more fluid cross-channel fulfillment, and new mobile and e-commerce offerings.  

"Kohl's didn't used to be viewed as an innovator, in terms of the technology that supports us, and that's one of the things we're aiming for," Schalk told FierceRetailIT in February. "We've put in enough foundational investments that we've now been able to be more innovative."

But her knowledge of Kohl's systems and processes was likely not enough to merit the restraining order. Because Schalk has knowledge not just of what the company has done or the programs it's using, but of future programs now in the works.

Since mobile and digital retail is such a focus for retailers today, the development and implementation of technology says as much about what that retailer plans to do as it does about its current capabilities. For example, Kohl's has been busy integrating its popular Yes2You rewards program into its mobile app and developing a mobile wallet. There's a focus e-commerce, and in the past two years Kohl's has completely replatformed both online and for mobile.

It's not hard to imagine that much of the retailer's fourth quarter holiday promotional planning is tightly tied to new digital features.

Kohl's may not be able to enforce its non-compete clause, but it has certainly made a point about technology. There really is no more important component in retail today. -Laura