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6 rules for retail innovation

Innovation is one of those words that is often misconstrued in retail. Those who avoid it, claim they want to stay away from gimmicks. And those who love it, often use it as a PR-driven initiative or as an opportunity for technology to be deployed without much strategy. 

Sadly, innovation in retail has been largely about bells and whistles and not true fundamental change. 

Innovation in its true sense of the word – implementing new approaches to generate a different result – should be critical for anyone operating a major retailer or brand today. But it’s definitely not. A recent study by Gartner shows companies typically allocate 90% of their tech budget to “keeping the lights on”, or indeed what we can call ‘incremental innovation’, and only 10% to that which is deemed transformative.

The question then is how do you get it right? And how do you do it to bring progress and actual results? Frankly, the first step is to move away from old approaches. Over the past decade, numerous retailers around the world have introduced internal labs, accelerator programs and incubators. And what we’ve seen time and again, is that while such programs start strong and sharp, over time they are devoured and diminished by surrounding day-to-day business processes. The outcome even with the right intention, tends to only be marginal. 

What the industry needs is a new mindset and a willingness for new ways of working. 

We believe innovation should be actionable by connecting the right strategies to the right solutions, and closely managing integrations to make them a reality. This ties to our mission of solving challenges and facilitating change. So here are six rules for industry executives to follow to make this a reality:

1/ Validate the challenge

Deploying solutions without a defined problem is an unproductive method of innovation. It’s too easy to get lost in a sea of internal objectives and cost-cutting exercises while forgetting about what your customers really desire or need. 

To successfully determine the challenge, you must align on a united vision. Innovation internally is hard – it’s often political and frequently siloed. The best case studies out there have come from companies who have validated their roadmaps through a process of internal buy-in so they can achieve a common goal.

2/ Bring the outside in

Establishing a team that can bring different perspectives, both from outside the industry and in, as well as varied cross-disciplinary inputs, is always going to lead to greater results. New ideas come from diversity of thought – taking different things that work from other experiences, and making a new recipe out of them. It’s about getting outside your own department and making sure you have people from other parts of the company involved. Cross-pollination leads to the best ideas and strongest results. 

It’s for this reason we believe in the notion of “open innovation”: stepping outside of the internal model of building to co-create with a broader innovation ecosystem. It’s about resource and expertise coming in from experts on the outside, connected to ideas from around the globe. And it’s about increasing your chances of success by leveraging the knowledge and harnessing the success of others.

3/ Avoid the one-trick pony

The most successful projects should be updated over time, as opposed to achieving one incremental thing for a singular moment. This is about PR being the icing on the cake and not the cake itself. 

We all know innovation should have a broader goal, and often the challenge is convincing stakeholders to invest in the long term, laying the groundwork so that you gain economies of scale, not to mention scale itself, for every integration. It’s better to deploy two technologies with a clear purpose and defined ROI, then 10 pilots without strategy or buy-in.

4/ Mentor your partners

Simply put, you can’t treat startup partners like traditional vendors. These are companies big and small that provide collaborative partnerships. It’s crucial to work in a more hands-on sense, and to get help to manage these integrations if your own bandwidth is limited. 

Even when it is clear what value a technology brings to a retailer, partnerships fail due to cultural differences and conflicting expectations. To avoid this, try making time to offer your mentorship to these partners. Startups are not going to necessarily understand how to navigate your red tape or be as flexible with payments or delivery deadlines being moved. But with a strong connection in place, they could give you opportunities to co-create a brand new offering or be first to market with a technology.

5/ Empower your store teams

One of the biggest missteps with innovation is the idea of dumping new tech into store, for instance, without fully training or driving advocacy among employees. New technologies are worthless without buy-in and understanding to help things work smoothly and ensure shopper engagement. In-store, we’ve seen this with everything from smart mirrors to immersive experiences. 

This is simply about demonstrating the benefits in place for sales associates. If all this piece of tech does is add more to the checklist of things they need to do and doesn’t help their day-to-day relationship with the customer, it won’t interest them to help you as a retailer. Innovation ultimately needs to be enhancing the lives of those who have to use the tech.

6/ Calculated risks are better than failure

Innovation is usually associated with experimentation and accepting the Silicon Valley notion of ‘failure’. We’ve seen retailers trying to emulate this approach by investing in labs and incubators that fail to impact the bottom line. After all, retail corporate culture doesn’t believe in the “luxury” of merely trialing projects that won’t lead to actual results. 

So how can you test and learn with more of a conservative mindset? We believe there is a way to strategize calculated risks that allow learning and innovation to take place. Setting out a clear path of KPIs and objectives from the get-go with real measurements is the smarter way to ensure success. There’s no way around it – true innovation today is about results.

How are you thinking about retail innovation? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Each of the rules referenced above is matched by one of our products and services. Interested in how? Get in touch to learn more.

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Campaigns Retail

American Eagle targets Gen Z with sneaker resale pop-up

American Eagle has teamed up with sneaker resale retailer Urban Necessities to host an in-store pop up in NYC in a bid to further engage with its Gen Z clientele and the new ways in which they shop.

The 1,900-square-foot pop up, which is located at an American Eagle Manhattan location, features a selection of streetwear merchandise which includes rare sneakers like the Nike MAG Back to the Future, which retails at $50,000. Other highlights include a Supreme-branded pinball machine and a claw machine, which will give customers the chance of to win $300-$500 worth of merchandise.

For the American Eagle brand this is more than just a temporary retail installation, however. The company has taken a stake in the hip Las Vegas-based retailer for an undisclosed sum, as it hopes to forge a longer-term relationship with the company and continue to tap into the younger consumer shopping behavior.

“Sneakers are about self-expression,” Chad Kessler, global brand president for the American Eagle brand, told Forbes. “Our brand is built on individual style. We are about self-expression. We have the second-largest (U.S.) jeans business (after Walmart). Jeans and sneakers are great pairs. … Urban Necessities has a loyal following and is able to get the most exciting sneakers out there.”

Kessler also said he hopes that eventually in the future, it will open more Urban Necessities stores inside other AE outposts.

The pop up is also part of a series of strategies the brand is developing to continue to attract its core demographic, which includes introducing alternative retail channels that reflect how they now shop more flexibly. Also this year, it announced Style Drop, a clothing subscription service that allows customers to rent up to three items at a time for a flat fee of $49.95 a month.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. The Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

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business e-commerce Editor's pick Uncategorized

Alibaba is nothing like Amazon, says president J Michael Evans

Alibaba Group’s president J Michael Evans is very clear on the differences between the Chinese retailer and arguably its biggest competitor, Amazon, as outlined at NRF’s Big Show in New York.

The biggest differentiator is the way in which it operates as a marketplace, and not a retailer, he says. This is an important distinction because it means the group does not compete with brands, but rather helps them better connect directly to the consumer by handling logistics and sharing data. At present, there are over 10 million sellers on the platform, from brands and retailers to SMEs (smaller and medium-sized companies).

Secondly is Alibaba’s impressive scale: it has 600 million consumers and delivers 70 million packages a day, while its last Single’s Day sale sold over $31 billion in product. The company also has the world’s biggest IPO in history at $25 billion.

Clientele is also predominantly younger than its American counterpart, with 80% of its consumers being under the age of 35, while 40% are younger than 25. This has a strong influence in how Alibaba creates experiences that merge digital and physical, with mobile behavior always being front of mind.

The last difference, Evans emphasises is that the company is building bridges between its online business and the offline market, particularly in China through its New Retail concept. “The future of retail is all retail,” he says, and how to integrate it all properly. The concept is being implemented across eight different categories and sees the entire digitisation of the retail value chain, for the benefit of both the merchant and the consumer. The consumer, he says, is easier to please because they don’t care if they’re online or offline – they just want to shop. The merchant piece is more complicated however, because it involves many factors that need to be better linked together, such as inventory, payments and fulfilment. The concept can be best seen at play at Hema grocery stores in China, which include technologies such as facial recognition and dynamic pricing.

During the conversation, Evans also touched on advice for brands or retailers who want to enter China. “The market requires patience,” he explains, saying that its growing middle class, largely led by the young consumer, likes understanding what a brand is selling and whether it fits their lifestyle. Simply coming into the country and wanting to sell product quickly will not work, he says. “If you see China as long term, with the largest consumer group in the world, then this is a great market for you.”

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. TheCurrent Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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film mobile social media

Hollister targets Gen Z via documentary series on AwesomenessTV

Hollister's This is Summer series on AwesomenessTV
Hollister’s This is Summer series on AwesomenessTV

US teen retailer Hollister is targeting its Gen Z customer base with a new docuseries via AwesomenessTV’s YouTube channel.

The duo have teamed up to create 24 episodes – launching May 20 – following a group of seven high school juniors and seniors in San Francisco. In “This is Summer”, as the series is called, the teenagers are seen travelling, playing music, meeting friends, and exploring ‘what’s next?’.

Each episode is 8-10 minutes in length, and shot and optimised for mobile viewing.

“At Hollister, we aim to create rich brand experiences for our teen customer. Awesomeness has incredible reach with Gen Z offering Hollister a great opportunity to engage with customers in a new and authentic way,” said Kristin Scott, brand president of Hollister Co. “We are confident that our content will resonate with our customers and create additional brand relevancy across the teen market.”

The integrated campaign will also see Hollister and AwesomenessTV release songs and music videos inspired by the show, featuring original and cover songs from the cast and Awesomeness talent. The soundtrack will be available to stream on Spotify and will play in Hollister stores later this year.

Unsurprisingly, all of the cast will be dressed in Hollister, with the looks promoted via the brand’s social channels throughout.

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business Editor's pick technology

River Island’s brave new digital tech world hits Shoreditch

River Island's Shoreditch tech hub
River Island’s Shoreditch tech hub

River Island is going tech-heavy following the opening of a new Shoreditch, London, facility this month. The high street fashion brand has opened a centre that includes both an office and “digital collaboration space” for 70 staffers.

CEO Ben Lewis said: “River Island has placed technology at the core of our strategy, implementing ground up investment and ensuring everyone within the company thinks and operates in a digital first way.

“This will be our digital collaboration. We are expanding our tech function as a whole. We are plugging into something new as we move forward, positioning our thinking and development against the very best in the tech sector. We want to be renowned in the industry as pioneers, seeking out the best people and nurturing talent.”

Privately-owned River Island is one of the most successful of the high street chains in Britain and also operates globally with over 350 stores in total, several online sites serving its domestic and international customers and a giant design team of around 90 who create all its product in-house. It has also been involved in a number of designer collaborations with higher-end labels such as Christopher Shannon and Sibling.

Last year, when River Island announced that it would open the new tech hub, CIO, Doug Gardner said it was partly about attracting the most talented people to the firm but also that he didn’t want it to be a place where tech projects are worked on in secret without full collaboration with the wider business.

At the time he suggested that different teams would work there on rotation with designers as well as techies. And Gardner also said a lot of store projects would be run from Shoreditch with the retail and marketing teams on-site.

This determination to embrace technology is a reflection of the way m-commerce has grown to be a crucial channel for retailers in just a short period of time and how the industry expects tech to shake up retail and the marketing of retail even more in the future, from chatbot customer service to augmented reality and even to robots in-store.

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday

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Comment social media

Kohl’s and the Chewbacca Facebook Live video: where’s the line?

chewbacca video

If you’ve spent anytime on Facebook over the past few days it’s more than likely you’ll have stumbled across the video of a woman in the US trying on a Chewbacca mask.

Her infectious laughter has now made this Facebook Live’s most-ever watched recording with over 100m views, and counting.

Essentially an unboxing video, she just happens to mention at the beginning that she got it from department store Kohl’s, before sharing the fact that this mask is a birthday present to herself and not going to be for her kids.

Kohl’s jumped on that idea sending Candace Payne and her family several more masks so they could all enjoy wearing them, as well as a stack of further Star Wars merchandise and a $2,500 Kohl’s gift card. The nature of the response (planned with its social agency, Huge), as well as its speed, has won the retailer props around the country and across social media.

“We don’t want you to have to share your Chewbacca mask, so we ‘confinsctated’ masks for everybody,” the Kohl’s rep said in the video of the drop-off, in reference to her confusion in the initial clip about how to pronounce “confiscated”. That clip, called “The Happiest Chewbacca” has got 29m views too. The mask has also since flown off Kohl’s shelves around the country.

The question is, where’s the line with such brand integration? Kohl’s got lucky with this one, to be fair. Payne could have opened the item and never mentioned the retailer’s name. She could (likely) have even bought it from somewhere else. There’s no denying however that the store did a great job of quickly reacting in a positive way that benefitted the family further, thanking them for being loyal shoppers, rather than just taking to social media to post a basic response of their own.

The fact it had the wherewithal to do something about it when the opportunity presented itself should alone be celebrated. But dig a little deeper on social, and a few responses were of course a touch cynical – ranging from eye rolling at the fact Kohl’s did anything at all, to wishing to never have to work for an agency that did such uncreative campaigns, not to mention suggesting that the PR’ing of the initiative was what felt particularly forced.

While speed is probably what made this work – grabbing the moment and beating any competitors to it – others suggested that what it did left a nasty brand-feel to an otherwise very fun and joyful thing. Payne and her family seem pretty happy about it, but there’s a slight layer of awkwardness over so much gifting felt in the Kohl’s clip too.

In spite of that, there’s no denying that the Chewbacca story is everywhere for this particular moment in time, and the fact it’s with the Kohl’s name wholeheartedly attached to it means that team is no doubt patting itself neatly on the back. Wouldn’t you? We’d love to hear some of your thoughts as industry insiders on the matter, do share in the comments below…

chewbacca kohls

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business e-commerce

ShopStyle: Expansion takes it from search to digital marketplace

popsugar-800x508

For anyone who’s a regular user of the ShopStyle fashion search platform (and I’m one), there’s an interesting development due in Q2 as it transforms into a fashion marketplace with the launch of new shopping cart service, ShopStyle Checkout.

Parent company Popsugar said the aim is to enable consumers to purchase products from multiple retail partners in a single seamless transaction using one login.

The launch will be via ShopStyle’s iOS app and it will roll out across all the brand’s platform’s as well as 14,000 ShopStyle Collective influencer sites by year-end, Popsugar said.

Popsugar doesn’t intend that ShopStyle becomes an actual retailer itself, and the retail partners it signs up will remain the ‘merchant of record’.

So far it’s named a number of partners, including big hitters like Topshop and River Island, Target, Neiman Marcus and Yoox.com.

It could be pretty amazing – it will launch with over 3.4m products and expects to have over 100 retailers on board by the end of this year.

It’s certainly got a dynamic team behind it. Popsugar is one of those businesses that grew out of the digital revolution. Founded a decade ago as a blog by husband and wife Brian and Lisa Sugar, the media and tech company targeting millennial women is profitable and now has combined visitor traffic of 100m.

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday

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digital snippets e-commerce social media Startups technology

Digital snippets: Diesel’s ads on Pornhub, Chanel’s Instagram battle, why the fashion world hates wearables

Your round-up of the latest stories related to fashion and technology…

diesel

  • Why you’ll soon be seeing Diesel ads on Grindr, Tinder and Pornhub [i-D]
  • Chanel may have just won a battle for the Chanel Instagram account [The Fashion Law]
  • Why the fashion world hates wearables [Co.Design]
  • High tech innovation wears well at Ralph Lauren [Forbes]
  • Burberry debuts on Apple TV with menswear fashion show [Mashable]
  • Misha Nonoo will skip fashion week to follow a consumer calendar [Fashionista]
  • Everlane’s starting a private Instagram account for new products [Digiday]
  • How Belstaff maintains a strong defense against counterfeiters [Stores]
  • How Urban Decay gets its 4.1 million Instagram followers to shop [Digiday]
  • Victoria’s Secret furthers organic storytelling mastery via Angel-endorsed Snapchat takeover [Mobile Marketer]
  • Crocs bows to critics, deletes David Bowie tribute tweet [Brand Republic]
  • Meet the female CEOs running fashion’s biggest brands [Fashionista]
  • What fashion needs to know about cyber security [BoF]
  • Shoppers are choosing experiences over stuff, and that’s bad news for retailers [The Washington Post]
  • Do ‘digital flagships’ deliver? [BoF]
  • The myth of the physical versus digital retail battle [WWD]
  • Why the social media ‘buy button’ is still there, even though most never use it [The Washington Post]
  • Inside the hidden world that handles your holiday returns [Wired]
  • Retail writes an obit on flash sale sites [Marketplace]
  • The blogosphere pays off more than ever [WWD]
  • What’s Grindr’s new agenda? [Dazed]
  • Instagram and the watch world [NY Times]
  • Why women aren’t buying smart watches [Racked]
  • Apple acquires Emotient, start-up that reads emotions from facial expressions [Fortune]
  • Why visual search will become a marketing obsession in the coming years [AdWeek]
  • These vibrating yoga pants will correct your downward dog [Fast Company]
  • 30 under 30 retail and e-commerce 2016: meet the millennials changing how we shop [Forbes]
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Startups technology

John Lewis’ JLAB announces five start-up finalists for 2015

JLABpitchers_FINAL

John Lewis is focusing on retail services and connected devices in its second annual start-up accelerator program.

The 2015 JLAB finalists include a digital queue management system for stores called Qudini; an app-based coffee shop created by three teenagers called Space Lounges; a platform that allows connected home users to control all of their devices through one portal called Alfred; a camera device that lets you see who is at your front door called Peeple; and a wearables team called Ikinen who have developed the Helios solar-powered cover for iPhone users.

A total of 21 participated in a pitch day earlier this month (as per the above shot). Said Paul Coby, IT Director at John Lewis: “The five start-ups we’ve chosen certainly demonstrate what a wealth of great ideas there is out there. Each idea has huge potential to bring something new, whether to our customers’ experience of shopping or consumers’ everyday lives.”

Each will be given initial funding and office space within John Lewis’s head office for 12 weeks from early July, and access to a full panel of mentors, of which I am delighted to be one. Look out for my diary entry on the experience later this summer following the second pitch day in September, which will crown the final winner with a prize of up to £100,000 in funding.

The scheme is run in partnership with technology entrepreneur Stuart Marks and his venture fund, L Marks. Last year’s winner was beacon-provider Localz.

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business e-commerce Editor's pick technology

Drone delivery is upticking for retailers, but Uber also has big plans for shoppers

Amazone Drone Delivery

Drones are back on the retail radar again, this time in Australia where e-commerce site The Iconic has announced its intentions to use them to deliver goods within the next two to five years.

The company’s CEO, Patrick Schmidt, told the Australian Financial Review his customers would benefit from speedy drone delivery. “We are pioneers of fast and flexible delivery, and we push the boundaries on delivery, so it’s something we are thinking about,” he explained.

The website already offers three-hour delivery in Sydney and same-day services in Melbourne, but is in constant competition with international players often able to ship items in as fast as local companies can across the country otherwise.

Regulations stand in the way of drones yet being a reality however. “Delivery via drone is not yet regulated, so it probably depends on the legislators on whether that would be possible … but in the technology space, things happen fast, so you never know,” Schmidt said optimistically.

Meanwhile in the US, Amazon is getting closer to its reality of “Prime Air” – a delivery system that aims to get packages into customers’ hands in 30 minutes or less using small unmanned aerial vehicles. It has recently been granted authority by the Federal Aviation Administration (FAA) to test this concept, albeit with the restriction of the drones flying under 400 feet, at a maximum speed of 100 miles per hour, and remaining within the pilot’s line of sight.

The move has been hailed a victory for the e-commerce company. It will also likely set a path for other businesses to follow. “Putting Prime Air into service will take some time, but we will deploy when we have the regulatory support needed to realize our vision,” reads the page on Amazon’s website dedicated to the program. “One day, seeing Prime Air vehicles will be as normal as seeing mail trucks on the road,” it continues.

Fashion and retail brands have been experimenting with drones over the past year or so elsewhere too, albeit largely to generate PR around a newsworthy subject. Fendi put them on the runway during Milan Fashion Week in order to stream content to a live audience online, while more recently, Crocs used them in Japan to deliver shoes straight from shelves to customers as a promotion for how light its new Norlin sneaker is. A recent article published by i-D also explored all the (slightly ridiculous) ways in which drones and wearables are combining from a fashion perspective.

When it comes to shopping however, the other piece of big news in terms of delivery over the past week was about Uber’s plans to launch a major merchant program in the US through its UberRush couriers and Uber drivers.

The move will provide retailers with the ability to get goods from local stores to shoppers within the same-day. Neiman Marcus, Louis Vuitton, Tiffany & Co and more are all said to be in discussions. According to TechCrunch, there could be as many as 400 different merchants currently in talks.

“It’s not hard to imagine Uber combining [verticals like] fresh food, restaurant food, home goods, online purchase orders, and more, into a single logistics framework that is dispatched to its thousands of drivers and couriers. A driver could theoretically have Johnny’s pizza in the front seat, Jenny’s new Louis Vuitton bag in the trunk, and you in the backseat,” the article reads.

Perhaps what we need is for Uber and Amazon’s Prime Air team to partner up – when the traffic gets all too much for the Uber deliveries to be efficient, said driver could be well placed as a drone pilot directing the package to its final destination all the while keeping it strictly in his line of sight. Just a thought.

In the meantime, expect a big focus on shipping services across the board to start emerging, with all manner of start-ups entering the space and aiming to disrupt it. According to Jennifer Hyman of Rent the Runway, that’s exactly what is needed for retail. Speaking at SXSW this year, she called for the existing delivery companies to be put out of business, and for the system as it stands to be “ripped up and recreated” in order for e-commerce businesses to have sustainable profit margins. “We need to get the level of e-commerce across the board up from 10% of total retail sales to 30% or 50%, and the only way that is going to happen is if the delivery method changes,” she expressed.

This post first appeared on WGSN.com/blogs