Lowe’s innovates because it has to

Discussion
Photo: Lowe's
Mar 27, 2017
Al McClain

At last week’s Shoptalk conference, Kyle Nel, the executive director of Lowe’s Innovation Labs, detailed why innovation is so important for retailers, primarily because the current pace of change is exponential. And yet, survival on incremental technological change alone may be impossible.

Mr. Nel said that when a new and different technology comes out (speaking not just of Lowe’s), it inevitably disappoints, investment falls off, but then a core group continues to work on it. At that point, it’s hard to figure out exactly what to work on during the “deceptive disappointment” phase, before the new and different tech comes back to market in a better form and more successfully.

For Lowe’s, it’s about helping people love where they live and seeding the future. So, Lowe’s does live testing with consumers based on neuroscience to see what is “in flow,” or intuitive for consumers, and what is not in flow, meaning difficult and frustrating. Mr. Nel says humans are obsessed with stories as a way of digesting disruptive information, so Lowe’s actually provides ideas to sci-fi writers to spark narrative-driven innovation. And the innovation lab execs read comic books to help understand storytelling.

Some of the innovations Lowe’s Innovation Labs and its partners have created include:

  • The “LoweBot” – an in-store robot that can answer questions from consumers, take them to a requested item, and keep an eye on inventory issues. It is currently in test in San Jose, California.
  • The Lowe’s Holoroom is a virtual reality home improvement design and visualization tool that allows shoppers to design and place products in virtual rooms and then “step inside” them and move around wearing goggles. Using Google Cardboard and their smartphones, they can even “take” their newly designed rooms home with them. This concept is periodically in test in a number of stores. Another version with mixed reality, called “HoloLens,” has also been tested, working with Microsoft.
  • In-store navigation – an app and a Tango-enabled smartphone enables shoppers in a two-store test in California and Washington to get directions to items on shelves.
  • Virtual reality “how to” training – According to a recent report in Fortune, with the use of an HTC Vive virtual reality headset, customers interact in an in-store enclosure with a 3-D representation of, for example, a bathroom. They receive detailed instructions about how to install bathroom tile and the like. This is currently in test in a single store in Framingham, Mass.

While a number of tests are under way or have been completed, few if any have been rolled out chain-wide or even to a large group of stores.

DISCUSSION QUESTIONS: Should major brick and mortar retailers invest heavily in innovation labs as a way to experiment with new ideas, get creative, and find ways to rejuvenate the physical shopping experience? Which of Lowe’s innovations seems to have the most promise?

Braintrust
"Retailers should leverage innovation for their businesses, but only with clearly-defined business cases and use cases for the investment. "
"There needs to be a clear purpose and direction to guide innovation investments."
"...the successful innovators will focus on the needs of the shopper first and cool technology second."

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32 Comments on "Lowe’s innovates because it has to"

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Bob Phibbs
BrainTrust

As I wrote in yesterday’s post, Cognitive Computing Is Transforming Online Retail – Where Does That Leave Physical Stores?, what I don’t get is how online retailers are obsessed with every interaction point but physical stores aren’t.

I mean, how many retailers pay any attention to anyone coming into their physical store? Personalization is being human. It is great to have innovation labs if they have the goal to be more human. If they are merely a place to play with shiny objects — and not convert more shoppers to customers — they’re an expensive indulgence.

Dave Nixon
BrainTrust
Dave Nixon
Data Analytics Solutions Executive, Teradata
8 months 14 days ago

Retailers should leverage innovation for their businesses, but only with clearly-defined business cases and use cases for the investment. They should be cautious in building their own. There are plenty of great resources to partner, enter into a joint venture for or rent for this purpose! Innovation WILL rejuvenate the retail experience and needs to be a high priority discussion for every retailer.

Sterling Hawkins
BrainTrust

Right. Innovation for the sake of innovation doesn’t do anyone any good. Investment in innovation can and should be used to find new, better and more efficient ways to do things; however, only if they’re potentially viable in market. Lowe’s is smart in testing different technology in different stores so they can measure actual results and see how shoppers are responding before committing to further investments.

Dave Nixon
BrainTrust
Dave Nixon
Data Analytics Solutions Executive, Teradata
8 months 13 days ago

Great point, Sterling …”pilot, test and tune.”

James Tenser
BrainTrust
“Clearly-defined use cases.” Exactly! A DIY home center store has a special affinity for project visualization, planning, and how-to instruction. A shoe store not so much. The “holo-room” VR setup at Lowe’s makes a certain amount of sense in that regard. So does a robot that can offer real help with locating a specific part or material. At the moment, however, neither solution can interact with large numbers of shoppers at a time. So it remains to be seen how much of a business impact is possible. In testing these tools, retailers should take care to avoid the “not-invented-here” attitude… Read more »
Dave Nixon
BrainTrust
Dave Nixon
Data Analytics Solutions Executive, Teradata
8 months 13 days ago

Key word: “Collaborating”… great insight.

Tom Redd
Guest

Lowe’s should invest in people training and people selling — helping a shopper make a decision. Lowe’s has a few pros who know their processes in home repair and service. That is priority number one — not a Palo Alto robot that can display a YouTube video on doing tile. Anyone can do that. Get a real human to go through the tile process with the rookies.

Dave Nixon
BrainTrust
Dave Nixon
Data Analytics Solutions Executive, Teradata
8 months 13 days ago

How about an experienced sales associate showing a customer HOW to do it, using VR? NOW you have something! Download the tool list, steps and how-to videos for use when they get home.

Ricardo Belmar
BrainTrust
Innovation labs are important for retailers to help them rethink their stores as experiences to further differentiate them from online shopping. Lowe’s is on the right track with their innovative ideas, however, I question if all of these innovations are purely being considered for the store. For example, if they create a great VR/AR experience in their Holoroom or with their VR-based training solution, why not enable these within their mobile app for a home experience? From a brand loyalty perspective that seems like a winning solution to foster loyalty with Lowe’s and move customers away from Home Depot. The… Read more »
Mark Ryski
BrainTrust

Yes, I believe innovation labs are an excellent way to generate new ideas and experiment. However, I would caution retailers to be clear about their core values and priorities. Having an “innovation lab” sounds sexy and progressive — and it seems many major retailers have them — but at the end of the day, there needs to be a clear purpose and direction to guide innovation investments.

Bob Amster
BrainTrust

Retailers traditionally have not been innovators when it comes to technology. It is long overdue and highly encouraging that retailers are investing in testing technology and concepts in their own environments. Eventually, those concepts that test well will be adopted by the industry as a whole. The important characteristic is that these concepts will have been developed by retailers, and in the retail environment, as opposed to solutions invented elsewhere looking for a problem to solve.

Harley Feldman
BrainTrust
Of course Lowe’s should expend resources in innovation labs to experiment with new ideas to attract and retain customers — heavily is a relative term that management can determine. One of the things that always amazed me in the past was the lack of R&D being understood in the retail industry. All of the discussion in the past was about scale. The innovation lab is a long overdue investment in R&D for the benefit of growing and retaining a customer base. The innovations with the most promise are the Holoroom and in-store navigation. The Holoroom should provide customers the best… Read more »
Ian Percy
BrainTrust
I try to live by one simple mantra: “What is possible?” The real trick is to understand where “possibilities” or “innovations” come from. Hint: they do not come from physical dimensional space. As I’ve said probably too often here, since the beginning of time certain people have found a way to see possibilities that most others can’t see. Sometimes it’s taken the rest of the world hundreds of years to catch up to those “possibility-seers.” The truth is, if da Vinci, Jobs or Musk can do it, we can all do it. But the moment you set up an innovation… Read more »
Adrian Weidmann
BrainTrust
Innovation has become a buzzword and has become the destination instead of a journey. One of the unspoken secrets about retailers is that one of the key drivers to integrate technology is to replace and/or remove people — employees — from the shopping equation. Brick-and-mortar retailers seem to want to create a store that is nothing more than a mindless, bland environment where shoppers come into a 100,000 square foot distribution center and find what they’re looking for and leave. Conversely, online retailers like Amazon are creating physical shopping environments that touch the shopper and create a seamless shopping ecosystem… Read more »
Brandon Rael
BrainTrust
While innovation for the sake of innovation is critical for survival in today’s hyper-competitive retail landscape, the investments that Lowe’s is making need to be extremely strategic, with the end objectives being increased customer satisfaction and overall revenue acceleration. Lowe’s investments clearly put them at the forefront of the innovation curve, and that is certainly impressive. However, the retail brick-and-mortar formula remains unchanged, as people desire an emotional, social and multi-sensory experience with the retail brand and their products. Having the right products, in the right place and at the right time, is the holy grail. You have a very… Read more »
W. Frank Dell II
BrainTrust
Brick-and-mortar retailers have an advantage over online retailers and most don’t work it. The advantage is human interface. At one time all we wanted was associates to say hello to the customer and even look them in the eye. In big box stores, unless you shop them frequently, it is hard to find things and associate are either busy or off somewhere. Technology can solve this problem for a good percentage of the customers. Determining how to do something or how something will look can be done online, so retailers must take it to a level that cannot be duplicated… Read more »
Lee Kent
BrainTrust
I find that we often interpret innovation as meaning sexy technology and it is important to remember that is not always the case. The important thing for retailers is to understand their customers’ shopping journey and create great experiences that will have them coming back. These experiences may not involve a robot or even any form of technology but they will simplify or enhance the experience. So yes, innovation is very important to retailers right now especially in improving the store experience and purpose but it doesn’t always have to be about tech. But that’s just my 2 cents.
Cathy Hotka
BrainTrust

Shoptalk was full of presentations urging definitive actions to increase customer engagement. The point, though, is to get innovation out of the lab and into the store. Actionable innovation can move the needle, and retailers need to invest a lot more.

Camille P. Schuster, PhD.
BrainTrust

Of course. We know consumers are changing and want different experiences in stores. Why would a retailer not innovate and experiment with new ways of doing things?

Larry Negrich
BrainTrust
Walk into Lowe’s and you will see a large kiosk that is supposed to be a product locator. I believe it interacts with their app — I’m not sure as I’ve never been compelled to try out the process. I’ve never seen a person using it. I would imagine (and I don’t have a research lab in my office so I am at a disadvantage here) that customers don’t use this kiosk to find a product because 1.) It’s annoying to have to go through the screens; 2.) The customer doesn’t know what the product is called so searching is… Read more »
Ian Percy
BrainTrust

Excellent, Larry. Your second point that the customer doesn’t know what the product is called is more central to this discussion than most imagine. You are the only one to mention it. I had the same problem trying to order a car part online and I almost always have it if I’m looking for the thing-a-ma-jig that goes between the whats-a-ma-call-it and the who-diggy. I typically take the parts I have into the store with me and ask someone to help me find the thingy that connects the two. No robot is going to help me with that!

Scott Magids
BrainTrust
8 months 14 days ago
Recent media reports have described a “retail apocalypse,” noting the biggest wave of retail closures in decades. “Apocalypse” may be too strong of a word, but there’s no doubt a major shakeout is imminent and those retailers which are able to innovate and adapt to changes will be the ones who survive. Yes, brick-and-mortar retailers do need to invest in innovation — the strategy of doing the same thing because it’s always worked before is no longer valid. Not all of Lowe’s experiments will work, but that’s the point of experimentation. A common theme among all of their innovations, however,… Read more »
Sky Rota
Guest
8 months 14 days ago
No! No need for any innovation at these stores. No one wants to spend time in them. The only thing Lowe’s, like Home Depot, needs is to actually have people working in the stores who are available and knowledgeable. You walk into these gigantic stores and have no idea where anything is. Then when you have a question, the workers say it’s not their department. My mom goes to Ace Hardware because they are smaller and have fantastic service, they help her from the front door and get her exactly what she needs in 20 seconds while I sit in… Read more »
Nir Manor
BrainTrust
We are in a period of accelerated innovation in retail. The quantity and quality of retail tech innovations introduced in the last few years is a new phenomena in the retail industry, traditionally a conservative non-innovative industry. To survive, brick-and-mortar retailers must adopt new technologies while not giving up on the basics — customer experience, service quality, human touch, efficient checkout, etc. Retailers’ own innovation labs can be a source of new concepts to adopt within the retailers’ environment. A different approach can be to cooperate with external incubators or innovation labs that focus on retail tech. I believe that… Read more »
Liz Crawford
BrainTrust

Innovation labs are critical to the future of retail — they are the incubators of the Store of the Future.
But the successful innovators will focus on the needs of the shopper first and cool technology second. Let shoppers and their “jobs to be done” drive the process of invention. Otherwise, the initiative can become a solution in search of a problem.

Don Delzell
Guest
8 months 14 days ago
I’m not sure I can whole heartedly endorse the ROI/business case approach to gating innovation. The reality behind innovation is that true innovation is almost impossible to associate with a valid and reasonable business case and rigorous ROI forecast. That’s sort of the nature of an innovation — something completely new. I also see what and how Amazon manages innovation and do not believe that the business case approach is a primary tactic. Of course, with seemingly inexhaustible capital and resources, Amazon becomes a model-breaker under any circumstances. Still, it may behoove us to think of innovation as requiring an… Read more »
Ken Morris
BrainTrust
Brick and mortar stores are looking for ways to compete with Amazon and their brick and mortar competitors. Personalizing the in-store experience is the best way to differentiate the brand and the shopping experience to attract and retain customers. With new technologies, retailers have a plethora of innovative ways to improve the shopping experience. The key is to find the right approach that appeals to your customers. Lowe’s approach to test several new technologies in real stores is a smart way to find the most effective method for their customers. Not all customers like to shop in the same way.… Read more »
Robert DiPietro
BrainTrust

Brick and mortar retailers typically have a web presence as well, where they test and analyze new ideas constantly. They should take the same rigorous approach to the physical store. I think they most promising idea for Lowe’s is Holoroom — the ability to step inside a remodel and experience it virtually will benefit the customer and help drive sales.

Kai Clarke
BrainTrust

Innovate or perish. That has been the key to success at retail since before Sam Walton. That shouldn’t stop for very aggressive, competitive retailers like Lowe’s or HD. Pushing the envelope really helps both the retailer and the category. “Why stop now?” might be a better question.

gordon arnold
Guest
Big ideas cost a lot of money. This is a good thing if the idea actually improves the bottom line by increasing turn or margin for any reason(s). A measurement method used to predict if an improvement will enhance sales is to judge if the improvement is unique to the criterion of a sale from a seller’s perspective as priority equal to the consumers. Providing high quality design and test methods for feasibility and or practicality studies is not a guarantee of capturing a customers business. It is simply a free shopping list that consumers exit stores with everyday to… Read more »
Vahe Katros
Guest
Comic storyboard: Frame 1: Jane sees a great outdoor idea on Pinterest and in the dream bubble she laments: “I wish Jim wasn’t so flakey, I know he could help me, oh well….” Frame 2: Frank the local handyman laments to his friends at the barbershop: Speech Bubble: “Gee, I wish I could market my talents through Pinterest and Houzz, you know, like Uber … “Hey you, my truck is filled with tools and I just passed your house!” Oh well….” Frame 3: Person in barber chair says: “Hey I’m with Lowe’s and I’d love to work with you on… Read more »
Morgan Linton
Guest
Yes, I think that many major brick and mortar retailers have fallen behind when it comes to innovation, instead focusing a lot on things that will make only small incremental improvements. For many large retailers, finding a way to get consumers excited about coming into the store has become critical to survival. While technologies like RFID provide great data for retailers, they don’t provide a better or more innovative experience for consumers. Couple this with the fact that large format stores are hard to navigate and AR offers a very compelling solution for consumers that’s both exciting because it’s new… Read more »
wpDiscuz
Braintrust
"Retailers should leverage innovation for their businesses, but only with clearly-defined business cases and use cases for the investment. "
"There needs to be a clear purpose and direction to guide innovation investments."
"...the successful innovators will focus on the needs of the shopper first and cool technology second."

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