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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 Editor's pick Retail

Coach pop-up celebrates self-discovery with NY fairground experience

“Life Coach” pop-up

Coach’s newest pop-up, Life Coach, celebrates the label’s roots in New York City with a series of immersive experiences that aims to “heighten your senses, stimulate your soul and wake up all the feels”.

The activation, which is running from June 12 through to June 17 in the Soho neighbourhood in NYC, which is where the brand was founded in 1941, invites guests to participate in tarot card readings, drawing, and playing carnival games.

Visitors enter the space via a neon storefront filled with psychic symbols and Coach visuals. Upon first entering the space visitors are asked to check in, and when reaching the first room, they are met with an entirely blank canvas on which they are encouraged to draw on.

The next room represents a typical Coney Island-type of fairground scene, including old-fashioned arcade games and photo props, as well as a boardwalk made from pieces salvaged from Coney Island after Hurricane Sandy.

In the third and final room, visitors can walk through a dark forest where they can find white tents that house tarot card readers.

Speaking to the New York Times, Carlos Becil, Coach’s chief marketing officer, said of the concept: “Whether you call it mindfulness, spirituality or self-help, seeking answers is the new pop culture.”

Activities that help consumers through their self-discovery include free sessions with mystics including tarot card readers Hoodwitch and astrologists Astrotwins. The event, which has no Coach product in sight, will keep its concept of self-discovery and elusiveness by introducing surprise guests and events throughout its programming until the pop-up’s last day.

The entire initiative ties to a broader theme we’re seeing in consumer retail, whereby the experience economy is evolving into the transformation economy – a state that is about driving self improvement and enhancement for consumers through brand activities, rather than mere moments meant to encourage dwell time or social sharing.

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digital snippets e-commerce social media Startups technology

Digital snippets: Tommy Hilfiger’s #Instapit, Amazon’s growing fashion offer, Burberry’s Brooklyn Beckham nepotism controversy

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

tommy

  • Tommy Hilfiger to host first ‘Instapit’ for Instagram content creators at women’s show [WWD]
  • Amazon’s clothing selection is now bigger than 250 Walmart supercenters combined [Re/code]
  • Brooklyn Beckham, Burberry and the new celebrity aristocracy [The Guardian]
  • House of Fraser baffles Twitter with off-the-wall Valentine’s Day #emojinal campaign [Marketing]
  • Dolce & Gabbana’s male models were glued to their ipads on the runway [Yahoo! Style]
  • John Lewis introduces ‘Shazam for clothes’ [Independent]
  • Zalando: the fashion platform looking to China for great customer experience [Econsultancy]
  • How The North Face uses AI to create natural conversations with online shoppers [Medium]
  • Inside three retail innovation labs: Sephora, Kohl’s, and Sears [RetailDive]
  • Social media influencers star in Boohoo #WeAreUs campaign [WWD]
  • 4 influencers break away from a dystopian future in adidas’ edgy new campaign [AdWeek]
  • Fashion and beauty brands are investing more in influencer marketing than ever [Fashionista]
  • Here’s how much celebrities make in the Instagram product placement machine [Jezebel]
  • Uber will now deliver your fancy Nordstrom clothes and flowers too [Mashable]
  • At retail’s ‘Big Show,’ a look at the tech merchants hope will keep them relevant [The Washington Post]
  • Shoppers love click and collect more than any other retail tech [Marketing]
  • Fixing the fitting room [Bloomberg]
  • The latest in so-called ‘beauty tech’ [Racked]
  • A growing internet ecosystem is breeding a radically new generation of fashion-forward men [Quartz]
  • Global luxury: how to win when you’re everywhere [BoF]
  • What worries retailers about their digital transformation [Digiday]
  • Here’s the problem with trendy e-commerce businesses [Fortune]
  • The future of e-commerce: bricks and mortar [The Guardian]
  • This ex-Googler’s fashion aggregation site is pioneering age of digital personalisation [Forbes]
  • New platform Launchmetrics can help fashion publicists track the ‘influence’ of front row guests [Fashionista]
  • Meet the 25-year-old Swedish woman using 3d scanning to make shoes fit perfectly [Forbes]