Fast Company Defines Retail Innovation
Groupon landed the top spot on Fast Company’s list of 10
Most Innovative Companies in Retail. In fact, only five brick & mortars
— Trader Joes, Marks & Spencer, IKEA, Starbucks and Urban Outfitters
— made the cut.
The business magazine credited Groupon for "integrating web
and the real-world shopping experience, changing consumer behavior, democratizing
small businesses, and spawning an entire new category." It also claimed
Groupon was the fastest-growing company in web history, earned a profit within
its first seven months, and led to "more than 500 copycat sites" globally.
Trader
Joe’s, coming in second, was praised for "becoming bigger than
Whole Foods while retaining its down-home image." By stocking "a
winning combination of yuppie-friendly staples (cage-free eggs, organic blue
agave sweetener) and affordable luxuries," Fast Company said Trader
Joe’s stores are generating an estimated $1,750 in merchandise per square foot,
more than double the level of Whole Foods.
In third, Marks & Spencer was praised
for its sustainability progress, including leading the way in charging for
plastic bags, significantly reducing packaging, launching a clothing recycling
venture with Oxfam, and reducing the impact of the materials it uses on deforestation.
The
rest of the list follows:
4. Amazon "for leading the way into the digital
book market with the Kindle — and setting off a major shift in the public’s
reading habits," as
well as for its dominance of online retailing.
5. eBay "for leading the
charge on mobile commerce." Fast Company’s editors
noted that this year alone, eBay expects to sell $4 billion in goods via smartphones
and tablets, more than double its figures from 2010 and well above those from
any other retailer. Its core iPhone app has been downloaded some 15 million times.
6.
Apple "for creating platforms and products that breed entirely new businesses," including
the App Store, iTunes 10, the Apple TV digital storefront, and the iPad.
7. Starbucks "for
listening to its customers — really." Out of the
nearly 98,000 ideas have been submitted to MyStarbucksIdea.com, 100 have been
adopted. These include donating unsold pastries to homeless shelters, giving
baristas name badges, selling reusable sleeves, and bringing back Salted Caramel
Hot Chocolate.
8. Shopkick, the location-based shopping app, for "bridging
the in-store and mobile retail experience." Fast Company’s editors
noted that beyond rewarding customers as they enter a store, Shopkick’s app
also guides users through physical retailers, letting them see reviews and
multimedia content.
9. IKEA for its eco-initiatives, including selling used
furniture online in Sweden as well as investment in developing alternative
energy solutions and lighting products.
10. Urban Outfitters "for nurturing
very distinct, successful, and quirky retail brands, including the youth-oriented
Urban Outfitters, the romantic and sophisticated Anthropologie, and the high-end,
bohemian Leifsdottir."
Fast Company is certainly not the only publication with an annual awards
list. Apple landed in first in Fortune Magazine’s list of the top-50 "most
admired" companies, which rates innovation as well as people management,
social responsibility and financial soundness. Also making the cut were Amazon
(7), McDonald’s (10); Walmart (11), Starbucks (16), Nordstrom (17), Target
(22), Nike (24), Costco (29), Best Buy (36), eBay (45), and Lowe’s (49).
Amazon
came in first in Forbes’ 150 "most reputable" companies,
which measures how companies are esteemed, admired, trusted and liked based
on surveys of the general public. Other retailers landing on the list were
Kohl’s (13), Staples (19), Lowe’s (21), Target (23), Home Depot (24), Macy’s
(26), JC Penney (27), CVS (30), and Kroger (36).
Discussion Questions
Discussion Questions: Which retailers would make your list of the most innovative retailers? Do you disagree with any of Fast Company’s selections?
I can’t argue with anyone on the list. They are all great, innovative companies. I note that no companies were cited for their innovation in the social media space. In that area Wet Seal, Lowe’s, Walmart, and Gap are a few retailers that have done interesting promotions.
Personally, I regard true innovation as being things that are so disruptive that they literally change the nature of the industry or channel entirely. So, with that in mind, I would agree with Groupon and ShopKick making the list. Others, like IKEA and Urban Outfitters wouldn’t have made my cut.
I love Trader Joe’s and spend more than my fair share of money at Amazon, but how can you not pick Apple as number 1? Meteoric retail rise. Well-designed products. Excellent customer service. Great use of technology.
Sorta seems like a no brainer, standing out in a sea of sameness.
As usual with these rankings it comes down to how specific the criteria are, and how objective the grading is. The devil is often in the details. In any event, in our rankings obsessed culture it always makes for good press and a lively debate.
Unscientifically, when I think innovation, it is Apple and when I think of impact on retail, it is Amazon.
Amazon, Trader Joe’s, Apple, and Wegman’s. All offer consumers a unique shopping experience and back it up with excellent customer service. All have disrupted business as usual in their categories and all have instituted ways of doing business that are the envy of other retailers.
Where is that leader of innovation, Sears?
Every retailer on this list is noteworthy, but I have another, perhaps more stodgy, metric for evaluating retailers: return on investment. Leave all the bells and whistles aside. Who’s making money? Those are the companies that have demonstrated they’ve come up with the most important of all innovations; being valued by their customers.
Innovation fuels profitable growth. The key is to have a formal, intentional, constant flow of new ideas from all business functions of the enterprise. Set up a structured group to lead and drive constant innovation. Have internal and external “IdeaJams” to build upon great thought.
Let’s hope that retailers read the article and take these lessons to heart. Large retailers that don’t appear on the list should have a one day offsite meeting to talk about why they’re not there.
I love the list, but agree with Paula R. that Apple belongs on top. Apple has completely rewritten the book on how to engage consumers at the retail level. Their achievement came at a time when every computer-based retail effort was struggling. The malls where they’ve located have been blessed with inestimable vitality. They’ve redefined the customer service experience and how to leverage technology.
All this was accomplished by an industry outsider with no experience in brick and mortar retailing. It’s the most remarkable thing I’ve seen in more than 40 years of carefully studying retail innovation. Apple is one for the ages.
The list is fairly correct. Groupon is truly innovative. TJ’s didn’t invent the wheel, they just made it better–when no one else could. Amazon surprises me. Not that they are on the list but their continual expansion and making it work. Apple is obvious. Sustainability means little on the bottom line so I’m not sure Marks and Spencer should be listed except my experience with Fast Company is they lean heavy towards Enviros.
Sadly, Fast Company worships innovation for innovations sake–not for true building of long-term stability and success.
So, if we aren’t really talking about retail innovation, then this list is just fine. It’s merely too bad they chose to claim it’s about retail when it’s really not.
Just one additional comment to respectfully challenge what Ted said about recognizing the companies that are making money. I’m certainly not going to argue that making money isn’t important but let’s not forget that there was a time when Blockbuster, Borders, Circuit City and others made money too. In 10 years we could add more companies that make money today to the “where are they now?” list. The tougher part is continually adapting and reinventing the value you deliver.
Secondly, I’d argue that making money and being truly appreciated by your customers aren’t always mutually implicit.
It’s a pretty good list, and certainly Groupon has been influential in retail recently. But I’ll bet that in 10 years, if anyone looks back on the list, Groupon will elicit a chuckle, much like Webvan would today when looking at a list from the year 2000.
In retail, finding an alternative to newspaper distribution of the Sunday insert is sacred. Groupon is darn close.
However, I do not know of any company that has “shattered the routine” like Apple.
Each time I happily complete a transaction without moving beyond the first third of the store I smile all the way to the car reflecting on its courage.
Because as we know, “retail ain’t for sissies.”
The list is fine in a “Fast Company” kind of way.
Innovation is often about simplicity and design. Re/the list, IKEA is obvious; but its inclusion is not due to its commitment to design. I’d like to see more brands akin to Alessi or Frank Gehry.
And, I’d like to congratulate whoever created the circular bar to hold a shower curtain. That’s innovation!
Besides Trader Joe’s, I used to think IKEA was a very innovative idea. Maybe it doesn’t change their business innovation quotient, but I’ve had too many bad service situations in both Chicago and here in Hong Kong. They need to be knocked down a few places in my book. Maybe they will start thinking about the customer experience AFTER the sale a bit more.
I would add Best Buy to this list, particularly for some of their most recent moves. They are moving towards doubling their online sales, thereby recognizing that if you want to connect with the tech-savvy buyer, you have to speak their language. They are also expanding their small footprint outlets (kiosks, store-in-a-store), while DECREASING their bricks and mortar stores–a bold move that will result in cost efficiencies as well as heightened visibility. Good moves if you want to be the tech/electronics/mobile leader.