4 Ways to Start Innovating in Retail Today
One of the biggest barriers to innovation is our concept of innovation itself. We tend to think of this as being big blue-sky projects that require a lot of resources or expertise to deliver. This can create a cycle of paralysis where you never get to start innovating because you’re spending the whole time trying to make a case for the idea.
Things are moving fast though. Technology is improving every day and new developments are appearing. Innovation requires a new mindset – it needs you to be open to risks, willing to experiment, and to mobilise quickly to test and improve ideas.
With that in mind, here are four ways that you can start innovating in your business today.
1. Retail incubator
There are a number of different ways a retail incubator could benefit you. You could run your own start-up incubation scheme like John Lewis’ well-known JLab programme, which will connect you with innovative companies outside of your own business. Incubators and accelerators are becoming regular fixtures across many sectors because of their power to bring new ideas to big businesses.
Typically an incubator will offer a certain amount of funding and support over a period of anything from a few weeks/months to longer. Often the funding will be in exchange for some equity within the chosen start-ups, which offers longer term benefits if the business goes on to be successful.
An incubator could find you innovative new products to sell. Or it could connect you with companies developing new technology that you can use to improve your business.If setting up your own retail incubator isn’t an option you can still benefit by looking at the other accelerators out there and the types of companies they’re working with. It may be that you find a new partner that can add bring something to your business that your own R&D can’t.
2. 5x5x5 framework
The 5x5x5 approach is built on the idea that you split your management team, workforce, or strategy forceinto teams of five people. You then give each of them five days to come up with five business experiments or innovative ideas that can be carried out in no more than five weeks. And each idea should cost no more than $5,000 (or your local equivalent amount).
Created by Michael Schrage, the idea is to make people come up with actionable ideas. The parameters force them to think about innovation in a practical way instead of as this big concept that takes a lot of time and money. Not every idea will be workable, but by making participants think smaller the greater the likelihood that they come up with focused ideas that address one specific issue. Many changes can be implemented on a small scale but deliver big results.
It also reduces risk as none of the suggested experiments can cost more than the set criteria, or take a huge amount of time. They’re experiments that you can comfortably run more than one of without taking a big hit if they don’t work out.They can also be steps towards a bigger idea. Perhaps you’d like to implement some new technology but aren’t sure if there’s a business case for the risk. Through the 5x5x5 method your staff may come up with ways to test the ROI of a larger scale programme.
3. Open innovation
What better way to innovate than to tap your own customer base for ideas of what they’d like to see? Lego does this to great effect with its Lego Ideas programme, which lets anyone suggest and idea for a new Lego set and then gather votes from the rest of the community.
If an idea gets at least 10,000 votes then Lego will assess whether to put it into production. Aside from the ideas for sets themselves, Lego also benefits from additional customer data about the sorts of things customers are interested in, what fares well, and even what a certain segment of the customer base favours.
This type of innovation is widely used by food brands such as Doritos, Walkers and Propercorn, who have all run new flavour campaigns where the public votes for the flavour they’d like to see on the shelves. In Propercorn and Walkers’ cases they also encouraged customers to suggest the flavours to be voted on, which they then whittled down to the final selection. Again all of these brands benefit from engaging customers in this way to find out more about their preferences.
The other way you can embrace open innovation is to encourage input from people outside of your own company. By shaking off the traditional idea of operating as a closed business, you can invite contributions and solutions that would not be possible otherwise.
4. Create a culture
One of the best ways to innovate is to create a culture that supports that. You should encourage ideas from everyone in the organisation – the staff member on the shop floor may be closer to some shopper issues than the team in the management office. Likewise, you need to share information with your employees. If they know what the company as a whole is trying to do or the problem it wants to solve then they can start thinking of ways to help. This can be a great way of identifying small and easily implementable changes that can make a big difference.
Companies like Google are specifically built around this sort of innovative culture.The company encourages its staff to think big through an initiative called ’20 percent time’. This is one day a week where employees can work on their own projects. Far from being unproductive or a huge expense, many of Google’s products have come out of these employees projects.
While this may be unfeasible for many businesses to put into practice, the idea behind it isn’t. It comes back to the culture. Google wants its staff to be problem solving, to be sharing ideas and helping one another take them further, to be thinking one, five or ten years down the line. You can create this type of culture by encouraging your staff to communicate at all levels and to use their imaginations when thinking about what the business could be.
This culture can even extend to your customer base, as Google’s open source Android mobile platform shows. The vast majority of apps available on the platform are built by external developers. Not only does this keep the Android marketplace regularly updated, it also lets Google see the types of apps and their uses that customers respond best to.
Learn from the experience
Remember even if an innovation doesn’t work out what you learn through the experience is still valuable. Failure comes from taking a risk and taking risks is how companies get ahead. Every idea that you try provides you with lessons and learning’s that you can feed into the next one.
And even if an idea is a success you shouldn’t think of that as being the end of the process. The best solutions keep on evolving and getting better. If you implement a new innovation and then just leave it, it soon stops being innovative and starts being overtaken by new developments.
So how can you encourage innovation in your business? Which of these ideas could you try?
Get inspired with our pick of the top 50 tech innovations in retail. You can also quickly and easily connect with the players kick-starting trends and inventing the future of retail using Insider Trends’ little black book.