The retail industry is perhaps one of the most innovative when it comes to customer offerings. Most of the creativity possible in marketing across sectors goes into its strategies. Perhaps it’s the B2C nature that attracts these energies. But to sustain innovation, companies in the sector need to build a culture of empowerment that drives innovation.
In today’s corporate environment, where the lifespan of companies is shrinking due to the speed of market transformation, innovation is the strongest ally to stay fit and alive.
Building a culture of inclusivity
The investment needed here is not in technology and expertise alone, but also in empowering a culture of inclusivity. The innovative capacity of any organisation is limited only by its talent pool. Employees who feel empowered by a leadership that encourages new ideas are fertile ground for out-of-the-box thinking. Nurturing creativity, respecting opinions and even failure is a way forward to foster a culture of trust, inclusivity and drive innovative ideas.
In their 2004 IPO letter, Google founders Larry Page and Sergey Brin wrote, “We encourage our employees to spend 20 per cent of their time working on what they think will most benefit Google in addition to their regular projects.” Perhaps, this is what has led Google to become one of the most innovative brands in the world. If the company did not empower the employees, encouraged them to take out time to work on projects close to their heart, there is a chance that Gmail, AdSense, and GoogleTalk would not have existed.
Platform and services than systems
With technology platforms becoming the foundation of the whole enterprise environment, it clearly follows that retail business is not detailed in individual systems. The only value of systems individually is that they make a complete platform work smoothly and seamlessly. The objective of this seamless platform is to provide the best possible customer service. So for a modern retail firm, platform and the services it provides, are critical. This focus is what will drive innovation in the organisation, both in technical terms as well as services differentiation. Innovation is the biggest strength, which will set a brand apart. It will be the market differentiator for better customer traction, better data collation, better in-store experiences, and finally, much higher customer connect that comes to form it.
Quick experimentation
Technology adoption is never a single direction path. There are failures, adjustments, due diligence, and then some more failures before it becomes a part of an established platform. But then, failure is an important part of the learning process and allows teams to cover all bases before the final plunge. Organisations need to respect every bit of this journey, they need to create the culture of taking risks, learning from failures and delivering success. It’s only when employees have no fear of failure that they will think of new ways of doing old things. They need to empower teams to be in that space, or there will be no innovation.
While there needs to be ample time given for experimentation, getting a clear roadmap and governance in place for every new implementation, a clear time frame needs to also be in place.
Since time to market is one of the biggest and most critical differentiators of any product strategy, experimentation needs to be complete as per the roadmap. In corporate scenarios, examples abound where brands have shone after many failures. Experiments have failed, rollouts have taken many sacrifices, but the final product has been a resounding success. The platforms need analysis and careful evaluation, not to mention technology and apps integration, team operability, before they find final success.
Data-driven decision making
The biggest driver for innovation needs to be technology led tools, with proven and measurable RoI. This is possible with data-driven insights on customer details and preferences information. Guided by clear data bytes, teams can set parameters on what should create strategies for the market. These insights can drive innovative ideas as long as they have a solid data analysis base. The HIPPO methods of insights can never aid the scale-up of a business. Especially for retail, customer insights need to come from data, derived in a scientific manner. The alternative situation, where the leadership takes arbitrary decisions coloured by personal prejudices and insights, cannot be a fair representation of customer needs and preferences.
The best example is unscientific ideas of particular demographics and their preferences. Often a personal or racial or geographical attribute that has been used as a cliché, ends up as an insight because it is endorsed by stakeholders. The best way to innovate is by basing it on scientific data analysis. Ideate, and move ahead.
Customer first
In this industry, under any circumstances, the customer is always first. Innovations are all focused on the objective of better customer service, best customer connect. This is both the focus, the business strategy and everything else in between. Innovations in customer strategy focus can actually drive all of the business in the retail space. That is what has been the driving factor for most brands over the last few years. Innovative platforms, innovative technology, and tools have been the basis of successful digital transformation in the industry. This is where the omni-channel plans and deliveries started, and this is where customer expectations pushed the maximum innovation. Today, the retail industry looks like nothing as it was a decade ago. The reason is innovation and a data-driven customer-first strategy.
Clearly, in an industry where the dividing lines between online and offline are fast blurring, and omni-channel customer delivery, service and excellence is more norm than the exception, innovation is the biggest driving factor.
(The writer is a technology director at Tesco, Bengaluru.)