Marks & Spencer Looks to Create Innovation in a Lab

Discussion
Mar 04, 2013

Marks and Spencer has launched a "digital labs" division to lead innovation in-store and online.

Kyle McGinn, formerly CTO and managing director at independent online review platform Reevoo.com who has also been involved with startup communities such as Seedcamp and Eden Ventures, has been hired as the U.K. department store chain’s head of digital to lead the proposed new team. The lab will trial new technologies, build prototypes and develop concepts for implementation at scale.

"Over the last 18 months we’ve really embraced digital experimentation — from being the first retailer to join Samsung’s Smart TV platform to the inclusion of Aurasma technology in our app," said Laura Wade-Gery, executive director e-commerce multi-channel, in a statement. "By strengthening our in-house expertise with a dedicated digital lab, we can move with even greater pace and deliver first to market technology and experiences for our customers."

The separate unit is designed to have the nimbleness of a start-up yet benefit from M&S’s expansive in-house IT resources to drive ideas across in-store technology, digital marketing and digital platforms for employees.

"We want a small, dedicated unit to enable us to have a start-up, entrepreneurial mentality and tech-savviness, and to put that together with customer insight," she told Retail Week. "The whole idea is to test some quite experimental stuff — I wouldn’t rule anything out."

In February, M&S pledged to transform itself into an international multi-channel retailer following a 10.8 percent increase in multi-channel sales over the holiday period. That included a 90 increase in sales from mobile devices. The stores already feature iPad-clad associates, interactive digital screens in some health and beauty departments, and in-store kiosks.

Some reports compared the venture to Walmart Labs, which has acquired nearly a dozen startups since being formed though the acquisition of Kosmix in 2011. Walmart owns M&S rival Asda. Nordstrom, Staples and Home Depot are also among retailers recently opening innovation labs.

Should digital be the primary focus of the many innovation labs being set up by retailers or would you set them different objectives? How can labs be set up to support entrepreneurial spirit and experimentation?

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9 Comments on "Marks & Spencer Looks to Create Innovation in a Lab"

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Max Goldberg
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4 years 9 months ago

It’s difficult for large, established companies to innovate. Setting up labs and/or acquiring start ups can bring innovation to these companies. The problem is, once small companies are acquired, how will their larger parents treat them? If they bog down in corporate politics, they tend to stop innovating. Thus the larger companies develop labs and strive to keep them separate from the usual corporate culture.

Labs work best when given budgetary parameters and strategic objectives, and then being left alone. Upwards of 90% of the ideas developed in a lab might not work or fit, but the other 10% has the capability to change the parent company. It’s that 10% success rate that M&S, Walmart and other major retailers are counting on.

Adrian Weidmann
Guest
4 years 9 months ago

Innovation labs are an excellent vehicle to design and test different initiatives, but with a number of caveats.

Technology should not be the focus of these environments. Rather the entire concept of what your ‘store’ will be 7-10 years from now should be under consideration. How you will interface with your customers and how your shoppers will want to interface with your brand in the future should be the founding principles of these innovation labs. Start with a clean white board or all you will do is create a technology test lab and not a brand innovation lab.

The innovation lab should also be a working environment where real shoppers can actually go and shop. Workflows, planograms, the training of sales associates should all be under review. When retailers are trying to provide relevancy to their ‘brick and mortar’ channel—everything should be under review—thinking and activating outside the ‘box’ should be rewarded. Remember that if there are no failures—it wasn’t a good experiment!

Liz Crawford
Guest
4 years 9 months ago

Ray Kurzweil showed us that not only is the rate of change fast, the rate of change ITSELF is accelerating. One implication of this is that businesses impacted by technology (in other words everyone) must engage in some form of future-casting to stay competitive. That is why retailers, especially those with big data sets and higher ticket items, are investing in innovation labs. Owning proprietary test-and-learn facilities means maintaining a competitive edge in this accelerating world.

Doug Fleener
Guest
4 years 9 months ago

I like the lab concept, but it has to report to or nearly to the CEO. If not, the day-to-day business will keep the lab from realizing its true potential.

W. Frank Dell II
Guest
4 years 9 months ago

I would not bet the ranch on digital, but every retailer needs a two-prong program. Advancing web and mobile to stay current is a here-and-now requirement. Second is to start experimenting. Expect failure, but learn. Over time, the learning will help create better experiments.

Lee Kent
Guest
4 years 9 months ago

The world is constantly evolving and so must retail. Right now it’s digital; who knows what tomorrow will bring?

The idea of setting up labs is a great step though maybe not affordable for everyone. I’m wondering if we might start seeing some third party or even outsourced labs? In the mean time, to keep your lab fresh and creative, this calls for different treatment than the masses. Take a look at the book my friend Lanny Vincent wrote called “The Maverick Way.” Businesses need their mavericks, but they also need to nurture and protect them.

Matthew Keylock
Guest
Matthew Keylock
4 years 9 months ago

I think this is a good step. It’s otherwise very hard for a business to reinvent itself (or parts thereof) working through existing silos and established cultures, metrics and incentives.

Digital is a very important focus area for a “labs” group and I hope this means not just apps and data, but looking at things like new business models too.

Tom Redd
Guest
4 years 9 months ago

The lab concept is great to see on a roll in retail. The next phase after the tech hype with labs will be the shopper element. Getting the lab mode in play with the shopper analysts or as we have at the University of Arizona—the Family Sciences teams. Getting more understanding of the science behind the shopper and their “life influencers” has a huge payback, especially when this science is combined with the technology of tomorrow and put into the grasp of creative retail innovative lab teams.

Tom…the expanding science of simple retail.

Mike Osorio
Guest
Mike Osorio
4 years 9 months ago

Whether in-house or outsourced to a small, agile digital innovation house, large retailers must embrace the digital space in an intentional way via a lab/testing environment. Always playing catch-up or “me-too” is a recipe for irrelevance. We’re well beyond the tipping point for digital being a mainstream part of marketing, employee comms, and customer comms. Get in… or get out.

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